PEORIA, Ill. (WMBD) — The man appointed by a Tazewell County judge to oversee the finances of the now-defunct Reditus Labs wants to sue Aaron Rossi and other business entities associated with its former CEO to recover money, according to court records.
Adam Silverman, the court-appointed receiver managing the now-shuttered company’s day-to-day affairs, said in an April 19 motion that he believes he could recover as much as $100 million if allowed to take action against Aaron Rossi, some of his holding companies, and Rossi’s family members.
Failure to do so, he said, would “essentially force the company to forego collecting tens of millions of dollars of receivables,” and benefit insiders such as Rossi to the detriment of Reditus’ creditors and other stakeholders.
An attempt to reach Richard Blake, one of Rossi’s attorneys, was not immediately successful.
Silverman needs a judge’s approval to file the suit in Tazewell County Circuit Court and if approved, that could mean the end to civil litigation filed by two of Rossi’s former colleagues and stakeholders in the company.
The receiver claims two former business partners who sued Rossi for allegedly pushing them out of the company, failing to properly compensate them, and using company funds for his lavish lifestyle, might be willing to drop their individual suits and merge them with his new one if asked. Drs. James Davie and Malcolm Herzog initially filed separate lawsuits against Rossi but in 2022, agreed to consolidate their claims.
In a draft of the complaint Silverman seeks to file, he alleges that “Rossi misappropriated tens of millions of dollars from Reditus Labs through multiple means.” Those include:
- paying himself (or entities he owns or controls) under the guise of grossly excessive compensation or rent that far exceeded fair market value.
- using company funds to pay himself cash or to pay for other personal expenses.
- using Reditus Labs to pay expenses for other businesses that he owned or controlled.
Silverman, in his complaint, alleges Rossi kept the terms of some of those agreements with his other businesses secret from partners. The suit said the amounts Rossi caused to be spent from Reditus’ coffers were “excessive, unearned, commercially unreasonable, and the product of an irreconcilable conflict of interest.”
Reditus Labs was once a booming company, seizing upon the COVID-19 pandemic to become one of the state’s largest testing companies, earning about $200 million. The lawsuit between Rossi and his former investors stopped that ride.
The previous suits accuse Rossi of using the business as his personal piggy bank. Last fall, Silverman shut down Reditus, saying the civil suits were just one of the reasons. As many as 300 people were left without jobs, according to court records.
In the past, Rossi’s team has disagreed with Davie and Herzog’s claims, saying the two were just disgruntled over money issues. Again, an attempt to reach Rossi’s attorney was not immediately successful.
Both sides agreed in early 2022 to put Reditus in the hands of Silverman, who was appointed by a judge to act as an independent set of eyes over the company’s dollars. The move effectively took Rossi out of running the company on a day-to-day basis.
Rossi is also facing federal mail fraud charges related to the alleged misuse of funds from a Bloomington medical practice. All the counts allegedly occurred in 2017, while he was working at Central Illinois Orthopedic Surgery, and claim he used his position as an office manager for his own gain.
He allegedly moved the practice’s bank account to a different institution and changed accountants. He also allegedly made misleading and false entries in the firm’s financial records to hide this. The indictments list the practice as a victim as well as two doctors who owned the practice, listed in the indictment as “Victims A and B.”