Second Former 5LINX Owner Pleads Guilty To Wire Fraud And Tax Charge For His Role In Multi-Million Dollar Marketing Scheme

CONTACT:      Barbara Burns
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ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jeb Tyler, 45, of Rochester, NY, pleaded guilty to conspiracy to commit wire fraud and filing a false tax return for the year 2014 before U.S. District Judge David G. Larimer. The charges carry a maximum penalty of 20 years in prison and a fine of $250,000.

Assistant U.S. Attorney Richard A. Resnick, who is assisting AUSA Craig R. Gestring in the prosecution, stated that in 2001, Tyler, Craig Jerabeck, and Jason Guck started 5LINX Enterprise, Inc. (5LINX), a multi-level marketing company headquartered in Rochester, New York, which offered utility and telecommunications services, health insurance, nutritional supplements, and business services. 5LINX used independent representatives to sell products and services, and to recruit additional representatives.  Jerabeck was President and Chief Executive Officer, Guck was Vice President and Secretary, and Tyler was Vice President of 5LINX.

In June 2006 and July 2006, Tyler, Jerabeck and Guck sold 5LINX stock for $5,500,000 to three investment companies, Trillium Lakefront Partners III, L.P.; Trillium Lakefront Partners III, NY L.P.; and Shalam Investment Co., L.L.C. (collectively known as "the Investors"). Tyler admitted that between May 2010 and April 2016, 5LINX sold and distributed products for a Florida vendor. Tyler, along with Guck and Jerabeck, and without the knowledge of the Investors, Board of Directors, or other stockholders, conspired and agreed to cause the Florida vendor to pay them personally or companies they owned approximately $2,310,510, which their Stockholders Agreements prohibited them from receiving.  5LINX, its investors, as owners between 2006 and January 2014, and as creditors thereafter, and stockholders were entitled to and should have received such funds instead of the defendant, Guck, and Tyler.

Assistant U.S. Attorney Richard A. Resnick further stated that the defendant admitted that he had provided material false information on his personal tax returns, Forms 1040, for the years 2012 through 2015. Specifically, the defendant admitted that he failed to report income he received from 5LINX, and took deductions to which he was not entitled, that is, consulting fees that were not paid.  The false returns resulted in a tax loss to the IRS of approximately $449,123.

The defendants were charged in a superseding indictment in September 2017. Craig Jerabeck was previously convicted and is awaiting sentencing. Charges are pending against Jason Guck. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

Today’s plea is the culmination of an investigation by Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Gary Loeffert, and the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent in Charge, New York Field Office.

Sentencing is scheduled for September 9, 2018 at 2:00 p.m. before Judge Larimer.