Another 5Linx founder has pleaded guilty, admitting to the same wire fraud conspiracy as did another local man who helped create the once-thriving multi-level marketing company.

Jeb Tyler, 45, pleaded guilty Wednesday to a wire fraud conspiracy and to filing a false tax return for the year 2014. While the plea included an admission to a single false tax return, Tyler admitted in federal court that his tax returns were not accurate between 2012 and 2015 and cost the federal government almost $450,000 in lost taxes.

Tyler and two other company founders — Craig Jerabeck and Jason Guck  — were arrested early last year and accused of looting 5Linx and its investors of millions through shell companies and unearned bonuses. The three were scheduled for trial in federal court in mid-September.

However, Jerabeck pleaded guilty to the wire fraud conspiracy in May, along with his own charge of filing a false tax return. Under his plea, Jerabeck agreed to cooperate with authorities and testify against the other founders if needed. Tyler’s plea does not require him to help authorities.

Federal sentencing guidelines, which are advisory for judges, recommend a sentence of between 51 and 63 months for both Tyler and Jerabeck.

The two both admitted to a crime more narrow than those alleged in the indictment.

They said that they and Guck illegally took about $2.3 million from a Florida vendor selling 5Linx products, including identity theft protection. That money should have instead gone to the company and its investors, the two company founders said in their pleas.

“The indictment alleges more schemes,” Assistant U.S. Attorney Richard Resnick said in court Wednesday. “This kind of tailors the plea to a certain scheme.”

5LINX is a multi-level marketing company, like Amway or Mary Kay Cosmetics.

Like similar operations, 5LINX works upon a pyramid-sales approach. If you recruit others to make sales, you can become even more successful than by making sales yourself. 

5Linx was once one of Rochester’s more successful companies, but has struggled in recent years identifying products to sell. Its products have included Internet-based TV and nutritional supplements.

Tyler is scheduled to be sentenced Sept. 19. Jerabeck’s sentencing has not been scheduled.

All three are free, awaiting their sentencing or trial.

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