Craig Jerabeck, one of the founders of the 5Linx, pleaded guilty Tuesday to the wire fraud conspiracy and also to the filing of a false tax return.
Jerabeck and two other of the company founders — Jason Guck and Jeb Tyler — were arrested early last year and accused of looting the company and its investors of millions through shell companies and unearned bonuses. The three were scheduled for trial in federal court in mid-September; that trial date is still set for Guck and Tyler.
On Tuesday, however, Jerabeck admitted to crimes different than those contained in the indictment against him last year. He pleaded guilty to the fraud conspiracy, maintaining that he, Guck, and Tyler — or companies they created — pocketed about $2.3 million from a Florida vendor selling 5Linx products, including identity theft protection.
“We understand that Mr. Jerabeck didn’t get all this money himself,” Assistant U.S. Attorney Richard Resnick said in court. “It would be all three defendants.”
That money, transferred by “interstate wire transmission,” should have gone to 5Linx, its investors, and stockholders, Jerabeck admitted.
5Linx, a multi-level marketing company, was once one of Rochester’s fastest growing companies. In 2014, New York Comptroller Thomas DiNapoli reported that a state pension fund investment in the company