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Michael Cohen's taxi business partner just agreed to cooperate with investigators

May 23,2018 07:22

Trump lawyer Michael Cohen appears to be in increasing legal jeopardy — one of his major business partners has now agreed to cooperate with government investigators. Evgeny “Gene” Freidman, known as the “Taxi King,” entered a guilty plea in New York ...


One of Trump lawyer Michael Cohen’s business partners has now agreed to cooperate with government investigators.
Evgeny “Gene” Freidman, known as the “Taxi King,” entered a guilty plea in New York state court Tuesday as part of a cooperation deal, the New York Times’s Danny Hakim, William Rashbaum, and Vivian Wang report.
Freidman had been arrested last June by state authorities, on charges of not paying more than $5 million in taxes related to his taxi business to New York state. Now he’s pleaded guilty to one count of evading just $50,000 in taxes, in exchange for agreeing to assist federal or state prosecutors, per the Times.
Cohen has been in the taxi business with Freidman for years — as of last year, Freidman managed about half of Cohen’s extensive taxi medallion holdings. Furthermore, the search warrant the FBI used to raid Cohen’s residence and office last month specifically requested documents related to his taxi medallion holdings, among other topics.
However, the Times did not specifically report that Freidman was going to flip on Cohen. And after the news broke, Freidman told Stephen Brown of the New York Daily News that his plea deal “has nothing to do” with Cohen.
Michael Cohen, taxi baron
It might seem odd that the Trump Organization’s longtime executive vice president and special counsel has a side hustle in taxi medallions, the expensive city-issued permits necessary to operate taxis. But Cohen got involved in the taxi business long before he entered Trump’s orbit.
Cohen’s father-in-law, Fima Shusterman, entered the business first. According to an earlier New York Times report, Shusterman worked as a New York taxi driver soon after emigrating from Ukraine (then part of the Soviet Union), and by the 1990s, he owned nine taxi medallions.
After Cohen married Shusterman’s daughter, Shusterman helped the recent law school graduate get into the taxi business too. Working with another Ukrainian immigrant, Symon Garber, Cohen started buying up taxi medallions. The Times team writes:

Mr. Cohen borrowed from a half-dozen banks and credit unions to buy taxi medallions. Then he used the medallions as collateral to borrow more money to buy more medallions, former colleagues said. He quickly amassed 30 medallions, each then worth about $250,000, but racked up millions in debt.
Together, the two men managed 260 cabs in the late 1990s and early 2000s, some for other owners. Drivers paid them $100 a shift. Millions of dollars in cash flowed in.

Indeed, in 2003, when Cohen ran unsuccessfully for a New York City Council seat, he billed himself as “the owner/operator of a fleet” of more than 200 taxicabs.
New York CityThe value of Cohen and Garber’s taxi medallion holdings soared, and the pair started buying up real estate — including several Trump properties. Cohen got a job at the Trump Organization around 2007 but continued to hold onto some of his medallions — the Cohen family still owns 32 New York City medallions through several different companies, Bloomberg has reported. In the past decade, Cohen bought 22 taxi medallions in Chicago too.
At some point, Cohen and Garber had a falling-out and disentangled their business interests. Cohen then struck up a partnership with Evgeny Freidman, a Russian immigrant nicknamed the “Taxi King” because he operated the biggest taxi fleet in New York City, to manage his taxi holdings.
But lately, the business has taken a turn. Due to new competition from Uber and Lyft, the value of New York taxi medallions has plummeted — the price dropped from $1.3 million apiece in 2014 to below $200,000.
Meanwhile, Freidman has ended up enmeshed in a series of business, personal, and legal problems. A judge ordered that he turn over some of his medallions to pay off his bankruptcy creditors. In 2015, he admitted in court that he slammed his wife against a wall shortly before they divorced. In early 2017, a former business partner accused him of threatening to kill his family. And then in mid-2017, New York state authorities arrested Freidman and charged him with stealing $5 million in MTA fees.
Freidman’s troubles caused problems for Cohen too. Cohen’s taxi companies are on the hook for $282,000 in back taxes, according to Bloomberg. (Cohen blamed Freidman, who managed the taxis in question, for the unpaid taxes.)
And then, of course, there were the FBI raids of Cohen’s home and office in early April of this year (carried out not by special counsel Robert Mueller but by the US attorney’s office based in Manhattan). Much of the media coverage of these raids has focused on Cohen’s involvement in sex scandal hush money payments for President Trump, and for the revelation that several companies (including one tied to a Russian oligarch) had sent Cohen large payments in 2017. Cohen has also faced questions about whether he was involved in Russian government interference with the 2016 election (he denies this).
But, per CNN, the FBI was looking for information on Cohen’s taxi holdings during the raids too. So investigators seem to suspect some kind of illegal activity related to Cohen’s taxi holdings — and now Freidman has agreed to a plea deal on reduced charges in exchange for cooperation of some kind, though he says it’s not about Cohen.

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