Massive Testing Laboratory Shutting Down Due To Serious Legal Troubles
After expanding rapidly during the COVID-19 pandemic Reditus Laboratories is shutting down due to legal troubles related to tax evasion and failed payments.
During the pandemic, anyone working in the laboratory sector saw booming business. The demand for COVID test results alone grew at an astronomical pace. So it comes as surprising news to learn that the prominent testing facility, Reditus Laboratories, will be shutting down.
Reditus Laboratories was founded in 2019. And its headquarter is in Pekin, Illinois. What started off as a small, local lab quickly grew in scale.
According to the company’s website, it launched “as a small closet lab that catered to podiatrists. Our initial focus was anatomic pathology and histology. As our growth and to quickly and accurately diagnose soft tissue and wound infections, we acquired our first real-time reverse transcriptase polymerase chain reaction (RT-PCR) machine in December 2019.”
Reditus Laboratories had ten employees before COVID struck. But it rapidly grew to over 300 employees in a matter of months. Additionally, the lab expanded from 2500sqt to 23,000sqft.
The company’s site said that “…expansion allowed us to increase our test offerings into areas of infectious disease, Next-Gen sequencing, hematopathology and flow cytometry.” And part of what allowed them to expand at such a rapid pace was support from the city and state levels. Local news WVIK reports that Reditus Laboratories received two distinct funding sources.
The lab opened after a grant from the Pekin City Council to the tune of $100,000. Then, once COVID hit, Reditus Laboratories landed a huge contract from the state of Illinois. Per WVIK reporting, “the company’s work included a lucrative contract with the State of Illinois for COVID-19 PCR testing, to the tune of more than $222 million.”
However, recently the company and its CEO have had some trouble. The CEO, Aaron Rossi, currently faces federal tax evasion charges unrelated to happenings at Reditus Laboratories. So, in April, the company was removed from Rossi’s control and placed into receivership.
Additionally, Reditus Laboratories owners are in a heated court battle. “The company’s statement said the owners don’t oppose liquidation of the company as the litigation continues, though the protracted dispute is cited as ‘just one factor’ in the decision to shut down the company and sell off its assets.” The company released that statement on Monday.
But, according to reporting by the Journal Star, there is an entirely different reason for the closure. They spoke to Larry Rossi, the father of Aaron Rossi. He told them that “when a court-ordered receiver took over last spring, payments to the company stopped.”
The company Rossi references is Tri-County Pathology Group, created solely to provide pathology services to Reditus Laboratories. It has worked under contract for the lab since 2021. And after they stopped receiving payment, the Pathology Group ceased its services.
Reditus Laboratories also stated that it would alert employees of the bad news of the impending closure. And that closure will come rapidly. They plan to cease all testing on Friday.
They did not indicate whether employees would lose their jobs as of Friday. Or if Reditus Laboratories plans to keep them on board during the shutdown and liquidation process.
