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The rise and fall of New York City's 'Taxi King'

Tech Insider logo Tech Insider 9/14/2017 Raul Hernandez

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Evgeny "Gene" Freidman is commonly referred to as New York City's Taxi King — notably by the New York attorney general's office and the law firms that have filed suit against him.

At one point Freidman owned more than 800 taxi medallions, the metal plates on the hoods of yellow cabs that allow them to operate legally on the New York City streets. But in the past few years, Freidman has experienced a precipitous fall.

Here's a look at the rise and fall of New York City's Taxi King. (Scroll down)

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1. Journey to the US

Freidman's father was a thermonuclear engineer in Russia, but in 1976 he immigrated to the US with his wife and son amid growing Soviet anti-Semitism, according to Crain's New York. Gene was 5 at the time.

In the US, Freidman's father worked in the taxi business and started a company that he would later pass on to his son.

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2. From modest taxi business to Taxi King

When Freidman took over his father's taxi business, the company owned 60 yellow cabs. Under several LLCs, Freidman increased that to more than 800.

Crain's New York reports that Freidman's profits increased from $2.5 million in 1996 to $120 million in 2012.

Freidman's companies often have interesting names, such as Hypnotic Taxi LLC, Milkyway Cab Corp., and Bourbon Taxi LLC.

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3. Medallion prices skyrocket ... for a time

In 2013, New York City taxi medallions auctioned off for a record $1.32 million. In 2015, Freidman told Bloomberg that he operated more than 1,100 medallions. That would put the worth of Freidman's taxi fleet in the neighborhood of $1.5 billion.

Unfortunately for Freidman, the rise of Uber and other ride-hailing services caused a seismic shift in the transportation industry. Today, medallions have plummeted in value to almost a tenth of their peak.

For many medallion owners who had borrowed against the value of their medallions, the falling value of their investments meant troubled times ahead.

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4. Default on a loan from Citibank leads to bankruptcy filings

In July 2015, after defaulting on a $34 million loan from Citibank, Freidman filed for Chapter 11 bankruptcy protection for 22 of his companies that collectively owned 46 taxi medallions.

In December 2016, US Bankruptcy Judge Carla Craig ordered Freidman to relinquish those 46 medallions to Citibank.

Freidman threatened to abandon the cabs outside the Citigroup tower in Queens, but was blocked by the judge from doing so.

The 46 medallions will be auctioned off later this month.

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5. Named one of New York's most "delinquent" taxpayers

In July 2015, the New York State Department of Taxation and Finance released its list of the top 250 delinquent business taxpayers, and four of Freidman's companies — Woodside Management Inc., Downtown Taxi Management LLC, 28th Street Management Inc., and Tunnel Taxi Management Inc. — were on it.

Freidman's companies totaled $8.4 million in back taxes owed.

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6. Independent monitor appointed to manage Freidman's finances

In April 2016, New York State Attorney General Eric Schneiderman appointed an independent monitor to oversee Freidman's financial records and business dealings.

The move came after Freidman failed to follow through on a 2013 lawsuit's ruling that he pay drivers the money they were owed. Freidman had to pay $250,000 in damages and fines.

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7. Lawsuits over claims Freidman created "ghost driver" accounts and made death threats

In August 2016, Everett Abitbol, who owned the Philadelphia-based Freedom Taxi with Freidman, filed suit, claiming that $1.6 million was paid to "ghost driver" accounts Freidman created. Abitbol alleged that the scheme took money from the company and affected the credit-card payments of its cab drivers.

Less than a year later, Freidman represented himself in a Manhattan courtroom in a separate case. The lawsuit — filed by another former business partner — accused Freidman of making death threats against the man's family.

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8. Taxi and Limousine Commission declines to renew Freidman's license

The commission declined to renew the expired licenses of several of Freidman's taxi companies in April.

The denial put a dent in Freidman's fleet of more than 800 taxi medallions. But even afterward, he still owned roughly 150 medallions, according to the New York Post.

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9. Arrest on tax-fraud charges

In June, Freidman was arrested and charged with four counts of tax fraud and one count of grand larceny stemming from a failure to pay the New York State Tax Department over $5 million in 50-cent Metropolitan Transportation Authority surcharges between 2012 and 2015.

Each charge carries a maximum sentence of about eight to 25 years in prison.

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