If they're convicted, two Canandaigua lakefront homes could be forfeited
Three former owners of a Henrietta-based marketing business, including two who own Canandaigua lakefront property the federal government could seize, are facing additional charges accusing them of defrauding investors of more than $13 million.
Acting U.S. Attorney James P. Kennedy Jr. Announced Tuesday a federal grand jury has returned a 37-count superseding indictment against former 5LINX owners Jason Guck, 42, of Victor; Craig Jerabeck, 56, of Rochester; and Jeb Tyler, 44, of Penfield; who were originally named in a June 20 indictment filed in federal court in Rochester.
They are charged with 29 counts of wire fraud and one count of conspiracy to commit wire fraud, each count punishable by up to 20 years in prison and a fine of $250,000.
The new indictment also includes six counts of money laundering and one count of conspiracy to commit money laundering, charges punishable by up to 10 years in prison and a fine of $250,000.
The defendants, while running their multilevel marketing company 5LINX, founded in 2001, offered utility and telecommunications services, health insurance, nutritional supplements and business services using independent representatives to sell products and services, and recruit additional representatives in a pyramid-type operation. Jerabeck was president and CEO; Guck, vice president and secretary; and Tyler, vice president. They no longer own the company.
In June and July of 2006, it is alleged the defendants sold 5LINX stock for $5.5 million to three investment companies: Trillium Lakefront Partners III; Trillium Lakefront Partners III NY; and Shalam Investment Co. which, from 2009 to 2014, owned a substantial stake in 5LINX.
The defendants are accused of fraudulently causing 5LINX, without the investors' knowledge, to pay more than $13.2 million to them through fictitious independent reps they created and made appear to have provided services to 5LINX. Kennedy said the money paid to the fake reps was transferred into the defendants' bank accounts or onto debit cards for their personal use.
Included is $2.3 million the defendants are accused of fraudulently causing a vendor, for whom 5LINX was selling and distributing products, to pay them; money that should have gone to 5LINX.
Also involved was the creation of false financial statements and reports on the financial condition of 5LINX that investors relied on in making financial decisions affecting the company. Prior to receiving fraudulently obtained funds, the defendants are accused of money laundering for allegedly transferring the funds through various fictitious companies and entities to conceal their ownership of the funds.
The new indictment is the culmination of an investigation by special FBI agents. As part of the prosecution, being handled by Assistant U.S. Attorneys Craig R. Gestring and Richard A. Resnick, the federal government, in connection with the June indictment, began proceedings against two homes along Canandaigua Lake to be forfeited by the defendants if they are convicted.
One on East Lake Road in Middlesex — valued at $1.75 million, according to realtor.com — is owned by Jerabeck. The other on County Road 16 in Canandaigua — valued at $874,800 — is owned by Guck.