5Linx
| Company type | Private |
|---|---|
| Industry | Multi-level marketing, Utilities, Telecommunications, Health insurance, Nutritional products, Business solutions |
| Founded | 2001 |
| Founder | Craig Jerabeck, Jeb Tyler, Jason Guck |
| Headquarters | Rochester , United States |
Key people | Nelson Gerard (Chairman), Farshad Tafazzoli (President) |
| Products | Utilities, Telecommunications, Health insurance, Nutritional products, Business solutions |
5Linx is a United States-based multi-level marketing firm located in Rochester, New York. The company provides services in utilities, telecommunications, health insurance, nutritional products, and business solutions. Established in 2001, its founders—Craig Jerabeck, Jeb Tyler, and Jason Guck—faced federal indictments in 2017 on charges related to wire fraud and money laundering. They confessed to embezzling $2.3 million from investors and misusing corporate funds; subsequently, Tyler and Jerabeck were sentenced to 14 months in prison in 2018.
History
In 2001, 5Linx was founded and incorporated in Rochester, New York by Craig Jerabeck, Jeb Tyler, and Jason Guck. After the dissolution of 5 Linx Enterprises, its assets were acquired in 2016 by 5L Holdings, LLC. That same year in September, Nelson Gerard acquired a controlling interest in 5L Holdings and assumed the role of Chairman.
Functioning as a multi-level marketing organization, 5Linx compensates its independent contractor representatives for both product sales and recruiting new members. The company does not guarantee any fixed income to its representatives.
Among notable figures associated with the company was Dorothy A. Brown, who served as senior vice president and spokesperson in 2015 while holding the position of Cook County Circuit Court Clerk. Additionally, Illinois State Senator Patricia Van Pelt Watkins held a prominent representative role before transitioning to another MLM business.
Between 2006 and 2009, 5Linx earned a spot on the Inc. 500 list of fastest-growing companies and continued to appear on the Inc. 5000 ranking until 2014. In 2009, it was recognized as the second fastest-growing company within the Rochester area and sustained a position within the Top 100 for multiple years thereafter.
In May 2015, the telecommunications division was sold to Birch Communications, leading to an estimated revenue decrease of around 30%. Farshad Tafazzoli took over as President in 2016.
Litigation
In September 2015, new management at 5Linx initiated legal action against former CEO Craig Jerabeck for allegedly violating contractual agreements by recruiting current representatives to rival network marketing companies.
Federal indictments were brought against co-founders Jerabeck, Tyler, and Guck in September 2017 on charges including wire fraud and money laundering. They admitted to defrauding investors of $2.3 million, misappropriating company funds, and tax evasion. In December 2018, Tyler and Jerabeck were sentenced to fourteen months' imprisonment and ordered to repay $2.3 million along with $118,628 in unpaid taxes. Jason Guck received a seven-month sentence in May 2019. These legal proceedings had a considerable negative effect on the company’s reputation and financial stability.