5LINX co-founders indicted

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The three co-founders of 5LINX, one of the fastest-growing companies in the Rochester area, have been indicted by a federal grand jury on fraud and conspiracy charges accusing them of cheating investors out of $11.2 million.

The indictment, filed Tuesday, charges Craig Jerabeck, Jeb Tyler and Jason Guck with conspiracy to commit wire fraud. They were initially charged by complaint in March.

The original complaint alleged the three took about $4 million, but the indictment claims the amount is $11.2 million, with Jerabeck and Guck taking $3.6 million each and Tyler getting $4 million.

The U.S. Attorney’s Office has filed documents seeking to seize more than $2 million in Guck’s bank accounts, along with two waterfront homes on Canandaigua Lake worth about $1 million each.

In June 2006, the trio made a deal to sell the company to investors with an agreement to limit their compensation.

“Despite these limits on compensation, the defendants, individually and collectively, engaged in a scheme and artifice to defraud the investors and 5LINX by taking unauthorized cash payments from 5LINX without disclosing these payments to 5LINX or the investors,” the 12-page indictment states.

5LINX is a multi-level, direct marketing telecommunications company that sells products and services through contracted representatives.

From 2009 to 2015, the defendants allegedly set up fictitious contractors in the 5LINX sales team and diverted money through those fake contractors to their personal bank accounts.

“The defendants set up fraudulent 5LINX independent contractor accounts under multiple company names that were actually controlled by the defendants,” according to the indictment.

“Had the millions of dollars not been diverted to the defendants, the money would have gone to 5LINX’s main account and increased the cash flow of the company,” the court documents state.