New filings in a lawsuit against Reditus Labs CEO Aaron Rossi claim Rossi paid millions of dollars to settle a lawsuit against a former business partner partly to conceal offensive text messages that he feared cost could him a lucrative contract with the state of Illinois.
Minority owner James Davie has sued Rossi and Reditus Labs, accusing Rossi of forcing him out of the company. Davie also alleges Rossi “pillaged” the Pekin-based company to fund a lavish lifestyle.
Reditus made more than $200 million in coronavirus testingthrough contracts with the state of Illinois.
Attorneys for Davie argue Rossi used Reditus money to hire lawyers or so-called "fixers" to destroy text messages that included racist, sexist and body-shaming remarks as part of a settlement with Dr. Gerald Paul, who died in 2021.
“These lawyers told Rossi, as Rossi recounted in text exchanges with his brother, that Reditus Labs would lose its state Covid testing business if his monstrous text message exchanges ever saw the light of day,” attorneys wrote in a motion to have a judge relax a protective order in the case.
Davie’s attorneys contend Reditus’ financial records and other documents do not violate trade secrets or other information that could be kept confidential.
“No financial information relating to Aaron Rossi’s fiduciary fraud, racketeering activities (which include wire and mail fraud), fixer deals paid for with Reditus monies and excessive spending and compensation should be kept out of public record,” Davie’s attorneys said.
A Tazewell County judge will consider Davie’s request at a hearing on June 23.
Financial management of Reditus is currently under a receivership, which a judge approved to remove Rossi from having any control of the company’s finances.
Majority ownership
Davie’s attorneys also want the court to recognize Davie is Reditus’ majority owner — not Rossi. They urge documents currently under seal show Rossi schemed to force Davie out. A spokesperson for Rossi, Natalie Bauer Luce, rejected those claims.
"These are desperate claims, written and timed to continue to try this case in the media. We look forward to having our day in court, and we question what ownership, if any, Dr. Davie has in Reditus." Davie’s attorney Peter Lubin responded that Rossi had previously acknowledged Davie as an owner.
“Rossi has no basis to question Davie’s ownership for the following reasons. One, Rossi issued a federal tax K-1 to Davie, under penalty of perjury, which is only issued to an owner. Two, Rossi told his half-brother in the text messages in the court filings, that Davie is an owner and that it is 'not always good to be an owner.' 3) Rossi opposed a receiver being appointed in the Herzog litigation because Davie was an owner. Rossi cannot have it both ways. He cannot tell the federal government and the courts that Davie is an owner and then instruct his spokesperson to question Davie’s ownership.”
The court filings show sworn testimony from Kelly Murphy, a former chief financial officer for Reditus Labs and PAL Health Technologies, who said Rossi confessed that he had intended to kick Davie out of the business.
Rossi also faces federal tax fraud charges for allegedly underreporting his income to the IRS from 2015 to 2017 prior to his ownership of Reditus. He has pleaded not guilty to the charges. His trial date has been set for Sept. 26.
In addition, Rossi faces a seven-count complaint from the Illinois Department of Financial and Professional Regulation accused him or writing unauthorized prescriptions and spending company funds without authorization when he worked at a Bloomington orthopedics company.
