The thing that ultimately killed M2 were the exorbitant interest rates it paid on the loans it secured from
so-called "factors." Such potentially debilitating loans was the primary cost of doing business in 900-land.
Since the billing cycle for phone companies was an excruciatingly long 90 days, Sylk needed to factor its
receivables in order to stay afloat while he waited for the Baby Bell checks to roll in. "Most companies
have a 10-20 percent profit margin, and Sylk was paying 30 percent interest," says an M2 insider. "You're
asking how somebody grossing $12 million a month could lose money -- That's a pretty big expense."
Unable to make the interest payments Sylk lost M2 and all his business assets including, his most prized
possession, the legal rights to the domain name "'Pussy' is the number two sex term throughout
the world for search engines," he says. "So it's inherently worth a fortune. Seth Warshowski, the biggest
guy in the industry, saved his ass recently by selling it for eight million bucks." In addition to losing his dirty
domain names (relinquishing was a heart-breaker), Jason also ended up in the hospital with
several compound fractures. Theories abound: the mob out for revenge, disgruntled business partners,
enraged bill collectors, factors with a score to settle. Lenny Sylk believes it was the mafia: "Jason had a
competitor in Miami who was found in the trunk of his car along with his girlfriend, with their heads cut off.
I said to myself, 'This is a mob-infiltrated industry Jason is involved in."

The plan would have worked too except that Roslyn did some investigating and discovered that M2 was a
raging success. Jason Sylk's silent partner suddenly became decidedly vocal. He not only sued Ron and
Jason Itzler, he sued Itzler's law firm. Needless to say, the firm was not pleased that one of its partners
had solicited venture capital money from a client who was in process of filing for bankruptcy. Itzler said
Roslyn's money was used to fund a "telecommunications company." While this wasn't a false statement,
it was certainly disingenuous. When the firm found out M2 was actually a phone sex service -immedately-
they demanded Itzler's resignation. After 7 years as partner of an elite Manhattan law firm Ron Itzler was
unemployed and in danger of being disbarred. "We could not have Ron here because of his involvement
with Jason," said one of the partners succinctly. As the Roslyn drama was winding down, so too was
M2's cash flow. It wasn't just the legal fees that were causing the drain. It was everything from fraudulent
accounting practices (a $170,000 interior design fee for the Oceania apartment was on the books as an
advertising expense) to the fact that Jason Sylk was increasingly absent from work either sleeping off the
previous night's revelry or getting high. "Jason was doing at least an 8-ball (3.5 grams) of coke a day,"
says one former M2 employee. "But he was constantly on a full cocktail: uppers, downers, coke, grass.
He did a concoction of drugs starting first thing in the morning."
Another lifestyle expense was Bolivian marching powder. One friend described the cocaine addiction
during the M2 period as "major." Another who actually visited Sylk at the Oceania described it as a
harrowing experience. "It was early 90s Miami coke den," she says, describing the decor. "There were
low-rent models and blow everywhere." Even after he relocated to New York Sylk's drug habit continued
to be a source of amusement for SoBe residents. Last May, The Miami New Times ran an expose on
the local fashion industry in which Jason Sylk was referred to as a "hotshot, crazy cocaine cowboy." As
M2 Communications continued to pump out cash the company's biggest share holder, Mel Roslyn, was
beginning to get anxious. For months he had been told that the company hadn't turned a profit yet. He was
beginning to wonder if he would ever see a return on his $100,000 investment. Ron Itzler and his stepson
Jason Sylk were betting he wouldn't. Consumed by greed, they had jointly concocted a scheme to freeze
Roslyn out of any profit participation. The plan was to give him a $140,000 check for his troubles, and send
him on his way.
written by Rene Chun


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