Feds in­ves­ti­gat­ing New York yel­low taxi loan fraud

The Morning Call - - STATE/REGION -

NEW YORK – Fed­eral prose­cu­tors have opened an in­ves­ti­ga­tion into pos­si­ble lend­ing fraud in New York City’s trou­bled yel­low taxi in­dus­try.

The New York Times re­ports the U.S. at­tor­ney’s of­fice in Man­hat­tan is in­ves­ti­gat­ing the lend­ing prac­tices that led thou­sands of cab driv­ers to take out high-risk loans that left them buried in debt.

Driv­ers who took out large loans to buy the medal­lions that al­low a per­son to op­er­ate a yel­low taxi were crushed by debt when the value of a medal­lion plunged from more than $1 mil­lion in 2014 to less than $200,000 to­day.

More than 950 medal­lion own­ers have filed for bank­ruptcy, and the crisis has been blamed for a string of driver sui­cides.

The emer­gence of Uber, Lyft and other ride-hail ser­vices has been a ma­jor cause of the medal­lions’ drop in value. But crit­ics say the credit unions and other len­ders that en­cour­aged im­mi­grant driv­ers with lit­tle com­mand of English to take out risky loans are partly to blame for the crisis.

Fed­eral prose­cu­tors have not com­mented on the in­ves­ti­ga­tion, but two driv­ers told the Times they had been in­ter­viewed by fed­eral agents as part of the probe.

“I told them every­thing,” said driver Mo­hammed Hoque, an im­mi­grant from Bangladesh who said he drove six days a week, 12 hours a day, but still fell be­hind on his pay­ments.

Taxi in­dus­try lead­ers in­clud­ing the len­ders who pro­vided the loans have de­nied any wrong­do­ing and blamed the medal­lion own­ers for tak­ing on too much debt.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.