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Post date: April 23 2015

A.G. Schneiderman Sues Evgeny Freidman And His Taxi Management Companies For Allegedly Violating Taxi Drivers’ Rights And Breaching Settlement Agreement

Lawsuit Seeks Restitution for Drivers, Fines, and Damages, as well as Imposition of a Monitor to Ensure Compliance

NEW YORK – Attorney General Eric T. Schneiderman today announced a lawsuit against Evgeny “Gene” Freidman, and four taxicab companies owned in part by Freidman, for allegedly violating taxi drivers’ rights and for breaching a settlement agreement that they entered into with the Attorney General in December 2013. That settlement required Freidman to pay $746,406 in restitution to drivers who were charged rates higher than the legally permissible amounts to lease cabs and medallions – including approximately $115,000 to reimburse drivers for unlawful healthcare fund deductions – as well as $500,000 in fines to the Taxi & Limousine Commission (TLC). As alleged in the suit filed today, Freidman did not provide proof or accurate information showing that drivers had been fully reimbursed for the healthcare fund portion of the settlement, as was required by the agreement. Freidman and his companies also failed to comply with provisions of the agreement that required them to cooperate with ongoing compliance monitoring by the Attorney General.

Today’s lawsuit also alleges that one of the Freidman Companies, Woodside Management, Inc. committed new violations by paying drivers late for rides charged to credit cards. The lawsuit also alleges that Woodside provided drivers and the Attorney General with false receipts showing, inaccurately, that the fares were paid on time, in an effort to hide the violations from the Attorney General.

With control of more than 860 medallions, Freidman oversees one of the five largest fleets in New York City.

“The conduct alleged in today’s lawsuit demonstrates a basic disregard for the struggles and rights of hard-working taxicab drivers, as well as for the laws and rules that apply to everyone in the taxi industry,” said Attorney General Schneiderman. “No one is above the law, and all companies must follow the rules protecting the rights of working New Yorkers.”

“We appreciate the Attorney General’s ongoing commitment to protecting drivers’ rights,” said TLC Commissioner and Chair Meera Joshi, “and to the accountability that is so crucially central to our regulated industries. We look forward to the continued close working relationship between the TLC’s Driver Protection Unit and the Attorney General’s committed staff, so that our licensees may always count on these protections.”

The Freidman Companies sued in today’s action are 28th Street Management, Inc.; Downtown Taxi Management, LLC; Tunnel Taxi Management, LLC; and Woodside Management Inc. As agents for medallion owners, these companies control over 860 medallions out of the total 13231 medallions currently in existence in New York City. 

In addition to restitution to drivers, fines, and damages in an amount to be determined, the lawsuit also seeks $100,000 for the purpose of appointing a monitor to ensure that the rights of hundreds of taxi drivers are protected.

Today’s lawsuit alleges that nearly a year after the settlement was signed, Woodside drivers were paid late – sometimes as much as a month late -- for fares they earned by credit card, putting drivers in serious financial distress. Woodside is accused of creating false receipts purporting to show timely payment, and providing those false receipts to drivers and to the Attorney General’s Office as part of the settlement’s reporting requirements. Woodside is also accused of providing the Attorney General’s Office with additional false documents to hide late payments. 

Because many taxi drivers earn fares from customers who pay by credit card, TLC Lease Rules contain specific provisions about how drivers are to receive those fares. Most frequently, managing agents collect credit card receipts through a wireless system in the cabs, and then pass these fares on to the drivers who have earned them. A managing agent is required to pay earned credit card fares to taxicab drivers leasing a medallion on a weekly basis. 

The lawsuit alleges that Freidman and his companies failed to comply with their reporting obligations under the settlement and failed to provide the Attorney General’s Office with information required under the agreement to confirm compliance. 

The lawsuit seeks both monetary and injunctive relief for the Freidman companies’ new violations of law and for breaches of the settlement agreement. It also seeks production of documents and an accounting to determine the exact amount of restitution, fines, and damages owed. Finally, the lawsuit seeks payment of $100,000 that Freidman and his companies committed to pay if they violated the settlement for purposes of hiring an external compliance officer to monitor their compliance with the Lease Rules.

The case is being handled by Assistant Attorney General Elizabeth Wagoner, Special Assistant Attorney General David Ross, Special Assistant Attorney General Jason Gonzalez, Special Counsel Patricia Kakalec, and Labor Bureau Chief Terri Gerstein. The Labor Bureau is part of the Social Justice Division, which is led by Executive Deputy Attorney General Alvin Bragg.