LIC taxi lease agent to shell out $1.6M for fraud: Schneiderman

By Philip Newman

State Attorney General Eric Schneiderman has announced that one of New York City’s largest taxi leasing companies has agreed to pay $1.6 million in fines and restitution for assessing fraudulent charges against nearly 2,000 cab drivers.

The company, SLS Jet, of 22-05 43rd Ave. in Long Island City, is one of the 15 biggest medallion leasing agents in the city.

“With most cabbies already struggling to make ends meet, our agreement will put money back in their pockets and prevent this company from cheating drivers out of their hard-earned wages,” Schneiderman said.

“With the cost of a medallion [which is bolted to a cab’s hood] averaging more than a million dollars, most taxicab drivers nowadays do not own their medallions,” Schneiderman said. “Instead, drivers lease medallions and often vehicles as well from owners and leasing agencies.”

He said cab drivers are generally not usually covered by minimum wage, overtime or other labor laws.

The city Taxi & Limousine Commission, which does govern the drivers, limits the dollar amount drivers may be charged for leasing medallions.

Many cab drivers told investigators that SLS Jet prohibited them from pre-paying fees for work shifts, causing them to incur the company’s late fees.

“The drivers who came forward are the heroes,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance. “They took on retaliation and harassment in the name of justice and today they have triumphed.”

Desai said, “Given that a driver who overcharges by $10 loses their licenses and faces prosecution for multiple offenses, the SLS Jet owners should be relieved for not facing criminal charges.”

Besides the $1.6 million assessed against SLS Jet, the company has been ordered to take steps to ensure future compliance with the law. SLS Jet was ordered to train managers and other employees and post a notice of rules. + Jet also must make quarterly reports to the attorney general’s office.

Should the company fail to comply with the law, it will be required to retain an independent monitor to watch and report on the company’s compliance.

Schneiderman’s office said the illegal proceedings went on between January 2011 and September 2012 and victimized nearly 2,000 taxi drivers.

Reach contributing writer Philip Newman by e-mail at [email protected] or phone at 718-260-4536.

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