This archive report was first published on 12 July 2019.
On July 11, 2019, New York Attorney General Letitia James opened an inquiry into the taxi industry's lending practices, following a series of investigative reports by The Times. The inquiry was prompted by allegations of corruption and exploitation of taxi drivers and medallion owners.
As part of the investigation, Mayor Bill de Blasio launched a probe into taxi brokers, leading to the arrest of a notorious debt collector last week. The city has promised more enforcement action to address the industry's corruption.
Thursday's charges against Melrose Credit Union's former CEO, Stuart Kaufman, mirrored allegations that had long been known to authorities. Kaufman was fired by Melrose in 2016, and the National Credit Union Administration (NCUA) brought civil charges against him in August 2018, alleging that he accepted bribes and demanding that he pay $3.5 million.
Before his downfall, Kaufman was one of the largest players in the taxi industry. His grandfather founded Melrose in 1922, and the nonprofit credit union became a major lender to New York taxi drivers and medallion owners. At its height, Melrose's books included over $1.5 billion in loans collateralized by thousands of medallions, including some owned by Michael D. Cohen, President Trump's former personal lawyer.
Another prominent figure in the taxi industry is Constantinos Georgiton, co-owner of the third-largest taxi fleet in the city. Georgiton's fleet provides insurance to drivers and loans that allow some drivers to buy their own medallions. In 2015, Georgiton had a net worth of about $26 million, according to records filed as part of a legal case.
