5Linx

5Linx is an American multi-level marketing company headquartered in Rochester, New York, which offers utility and telecommunication services, health insurance, nutritional supplements, and business services.[1] It was founded in 2001. In 2017, the co-founders of 5LINX, Craig Jerabeck, Jeb Tyler, and Jason Guck, were indicted on multiple federal fraud charges, including wire fraud and money laundering. They admitted to defrauding $2.3 million from investors, illegally depositing company revenues into personal accounts, and failing to pay hundreds of thousands of dollars in taxes. Tyler and Jerabeck were sentenced to 14-month prison terms in December 2018.[2][3][4]

5Linx
Private
IndustryMulti-level marketing
Founded2001 (2001)
HeadquartersNew York,
United States
Area served
International
Key people
Nelson Gerard (Chairman) and majority owner (5L Holdings, L.L.C.)
ProductsHome and business services, nutritional supplements
Serviceshome security (through Protect America), identity theft protection, electric power, data storage, supplemental healthcare (not insurance)[1]
Website5linx.com

History

5LINX Enterprises, Inc. was founded by Craig Jerabek, Jeb Tyler, and Jason Guck. 5Linx was incorporated in Rochester, New York, in 2001. In 2016, 5L Holdings, LLC was formed to acquired the assets of 5 Linx Enterprises (dissolved). In September of the same year, business entrepreneur Nelson Gerard bought the majority stock of 5L Holdings, LLC and became its Chairman. 5Linx is a multi-level marketing company. Representatives are rewarded for recruiting additional representatives in addition to products and services sold. Sales representatives are independent contractors, and the company does not make any claims about potential income.[5]

As of 2015, Cook County Circuit Court Clerk Dorothy A. Brown was a senior vice president and spokesperson for 5LINX.[6] Illinois State Senator Patricia Van Pelt Watkins was also a high-ranking representative until she left the company for a different multi-level marketing firm.[5]

5Linx was on the Inc. 500 list of fastest growing companies from 2006 until 2009. The company remained on the Inc. 5000 list as of 2014.[7] In 2009 5Linx was ranked on the Rochester Top 100 list as the 2nd fastest growing company in the region.[8] The company also made the list the following three years.[9][10][11]

In May 2015, the company sold its telecommunications branch to Birch Communications, which reduced the company's revenue by about 30%. Farshad Tafazzoli was named President in 2016.[12]

Litigation

In September 2015, the new management of the 5LINX sued Craig Jerabeck, 5LINX Enterprises' former CEO, alleging that he breached his contract with the company by poaching 5LINX representatives for other network marketing companies.[13]

In September 2017, the three co-founders of 5LINX - Jerabeck, Tyler, and Guck - were indicted on multiple federal fraud charges, including wire fraud and money laundering.[2][14] The trio admitted to defrauding $2.3 million from investors, illegally depositing company revenues into personal accounts, and failing to pay hundreds of thousands of dollars in taxes. In December 2018, Tyler and Jerabeck were sentenced to a 14-month prison term for fraud and filing false tax returns and were ordered to pay back $2.3 million in restitution to investors, as well as $118,628 in unpaid taxes to the IRS.[3][4] In May 2019, Jason Guck was sentenced to a 7-month prison term.[15]

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References
  1. "5linx product portfolio". 5Linx. Retrieved 7 September 2015.
  2. Cleveland, Will. "Former 5LINX partners indicted on federal fraud charges". DemocratAndChronicle.com. USY Today. Retrieved 20 September 2017.
  3. Craig, Gary (December 12, 2018). "Second 5Linx founder sentenced to 14 months for fraud, false tax returns". Rochester Democrat and Chronicle. Retrieved January 5, 2019.
  4. "Former 5LINX president sentenced to federal prison for taking millions from investors". WHAM-TV. December 6, 2018. Retrieved January 5, 2019.
  5. "BGA: Chicago pols push controversial sales program 5Linx". Chicago Sun-Times. Better Government Association. December 5, 2015. Retrieved January 12, 2016.
  6. Mihalopoulos, Dan (May 14, 2017). "Dorothy Brown sang firm's praises, now mum on her bosses' fraud rap". Chicago Sun Times. Retrieved January 5, 2019.
  7. Inc. Magazine profile
  8. "RBA Celebrates the 2009 Rochester Top 100". Rochester Business Alliance. Archived from the original on 2013-01-12. Retrieved 2012-09-24.
  9. "Rochester Top 100 honored at gala luncheon". Rochester Business Alliance. Archived from the original on 2014-08-11. Retrieved 2013-02-25.
  10. "2011 Rochester Top 100". Rochester Business Alliance. Archived from the original on 2012-11-02. Retrieved 2012-09-24.
  11. "2012 Rochester Top 100". Rochester Business Alliance. Archived from the original on 2013-04-14. Retrieved 2013-02-25.
  12. Clausen, Todd (October 2, 2015). "5Linx names former city chief of staff as CEO". USA Today. Retrieved January 12, 2016.
  13. Craig, Gary (January 16, 2016). "5Linx current, past leaders tangled up in lawsuit". Democrat & Chronicle. USA Today. Retrieved October 22, 2016.
  14. "5LINX defendants face fraud charges". RBJ.net. Rochester Business Journal. Retrieved 20 September 2017.
  15. Craig, Gary. "5Linx co-founder sentenced to seven months in prison for his role in $2.3 million fraud". Rochester Democrat and Chronicle. Retrieved 2020-02-21.
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