NEW YORK — A 46-year-old New York taxi tycoon was arrested on charges he scammed the state out of $5 million in taxes, authorities said Wednesday.
Evgeny Freidman, who manages a fleet of 800 medallion taxis, allegedly failed to pay millions in 50 cent surcharges on cab rides that is supposed to help pay for the MTA, Attorney General Eric Schneiderman said. He was hit with tax fraud and grand larceny charges during his arraignment.
“The ‘Taxi King’ built his empire by stealing from New Yorkers — pocketing money that should instead have been invested in our transportation system,” said Schneiderman.
Freidman is dealing with the legal challenges while struggling to maintain his business. The growth of apps like Uber and Lyft has hurt the value of taxi medallions. They cost $1.3 million in 2013. The going rate this year is just $250,000.
A bankruptcy judge ordered Friedman to surrender 46 of his taxis last year. Friedman was also forced to pay a $1.2 million settlement to his drivers in 2013 for failing to properly pay them.
Prosecutors say taxi drivers did their part and collected the fees, but then Friedman manipulated tax filings and kept the money. He faces up to 25 years in prison if convicted.
“This indictment exposes a blatant scheme to short-change the Metropolitan Transit Authority, the transportation infrastructure relied on by millions of New Yorkers,” said Taxation and Finance Commissioner Nonie Manion.