Second 5LINX defendant pleads guilty

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A second defendant in the 5LINX fraud case has pleaded guilty to federal charges.

On Wednesday, Jeb Tyler, 45, of Rochester, pleaded guilty before U.S. District Judge David G. Larimer to conspiracy to commit wire fraud and filing a false tax return for the year 2014.

Tyler is facing a maximum penalty of 20 years in prison and a fine of $250,000.

According to prosecutors, in 2001, Tyler, Craig Jerabeck, and Jason Guck started 5LINX Enterprise, Inc. (5LINX), a multi-level marketing company in Rochester.

The company offered utility and telecommunications services, health insurance, nutritional supplements, and business services. 5LINX used independent representatives to sell products and services.

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 $5.5 million to three investment companies: Trillium Lakefront Partners III L.P.; Trillium Lakefront Partners III NY L.P.; and Shalam Investment Co. L.L.C.

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 to have the Florida vendor pay them personally, or pay companies they owned, about $2.3 million, which their stockholders agreements prohibited them from receiving.

5LINX and the investor owners and stockholders should have received the money instead of Tyler, Guck, and Tyler, according to the U.S. Attorney’s Office.

Tyler admitted that he gave false information on his tax returns for the years 2012 through 2015. He admitted that he failed to report income he received from 5LINX, and took deductions to which he was not entitled, such as consulting fees that were not paid. As a result, he avoided paying about $449,123 in taxes.

The defendants were charged in a superseding indictment in September 2017. Jerabeck previously pleaded guilty to charges and charges are pending against Jason Guck.