NEW YORK–A man who indirectly helped to cause nearly three-quarters of a billion dollars in losses to the National Credit Union Share Insurance Fund (NCUSIF) has died.
Gene Friedman, 50, was a taxi mogul who helped drive up the values on taxi medallions, primarily in New York, to unprecedented heights in the mid-2000-teens. Many cab drivers went deeply into debt to purchase the medallions, primarily through loans from approximately a half-dozen credit unions that were eventually conserved by NCUA.
Freidman was a cabdriver’s son who “schemed his way to become the nation’s biggest taxi mogul and came to personify both the inflated ascent of the industry in New York City and its crushing financial collapse,” reported the New York Times. Friedman reportedly died of complications from a heart attack.
Freidman emigrated from the Soviet Union with his parents in 1976 and eventually became known as the “Taxi King.” He was described by the Times as “a piratical entrepreneur who did for the cab industry early in the 21st century what greedy lenders did for the nation’s savings and loan associations at the end of the 20th.”
According to the report, Freidman, a lawyer by training, was once flush with $525 million in assets, personally owning 250 taxi medallions worth $1.3 million each, a 4,000-square-foot townhouse off Park Avenue in Manhattan, an estate in Bridgehampton, N.Y., two villas on the French Riviera and a $400,000 Ferrari.
He was eventually disbarred in New York, evicted from the headquarters of his cab empire for owing $170,000 in back rent in 2017 — the same year that the city’s taxi commission refused to renew hundreds of his licenses — and legally bankrupt., the Times added.
Fine Assessed
Friedman was also ordered to pay $250,000 in fines, damages and restitution in 2016 for failing to abide by an agreement with the state attorney general’s office and the Taxi and Limousine Commission to pay fines and reimburse drivers for excessive charges.
In 2017, Mr. Freidman and Andreea Dumitru, the chief financial officer of his company, Taxi Club Management, were charged with first-degree tax fraud for failing to forward the 50-cent surcharge on each taxi ride that is supposed to be allocated to the Metropolitan Transportation Authority. They were accused of bilking the transit agency of $5 million, according to the Times.
In 2018, Mr. Freidman pleaded guilty to one count of criminal tax fraud and agreed to pay the state $1 million. He was sentenced to probation.
Among his partners was Michael Cohen, who formerly served as Donald Trump’s personal lawyer.
After helping to inflate the values of medallions to more than $1 million, they plunged to lows of $350,000. The inability to repay their loans drove some medallion owners to commit suicide.