Chicago’s taxicab king, Russian businessman Symon Garber, is facing millions of dollars in fines for illegally putting old wrecks back on the street as cabs.
Garber and his business partners together face $9 million in fines for operating 180 wrecked cop cars as cabs, a Chicago Sun-Times review of hundreds of complaints filed by City Hall shows.
That makes Garber and his partners the biggest offenders among companies that altogether had put 340 salvaged vehicles into service as taxicabs for as long as four years, according to complaints filed with the city’s Department of Administrative Hearings. In all, the city is seeking $17 million in fines from the operators of the illegal cabs.
Garber operated cabs in Moscow and New York when he befriended Mayor Daley’s son Patrick nine years ago in Russia. In just a few years, Garber became the predominant force in Chicago’s taxi business, an industry regulated by City Hall.
Garber and his business partners are facing the maximum fine — $50,000 for each of 175 cases — because they operated those salvaged cars for months, in some cases years, until City Hall discovered them in a crackdown last spring.
Garber has hired the law firm of mayoral candidate Gery Chico.
A $50,000 fine is almost a third of the cost of a taxi medallion — the city license needed to operate a cab. A Chicago taxicab medallion has recently sold for as much as $182,000.
These salvaged vehicles — cars that were once so badly damaged that insurance companies declared them total losses — made up nearly 20 percent of Garber’s ubiquitous fleet of maroon-colored cabs, which operate under the names Chicago Carriage Cab and Royal 3 CCC Chicago Taxi.
Garber and his partners would take a big hit from the fines because they own all of their cabs and nearly all of the medallions, unlike their competitors, Globe Taxi and Flash Cab, which also had salvaged vehicles in their fleets, the city’s crackdown found. But Globe and Flash own few, if any, medallions or cars, instead providing their names and dispatching services to independent cab operators. So it’s those independent Globe and Flash medallion owners who would be facing the fines.
Garber has fleets of cabs in Chicago, New York and New Orleans. The cab fleets sponsor his polo team, which travels across the world.
Garber doesn’t want to talk about using salvaged vehicles or the fines he’s facing “because of the ongoing litigation,” according to his spokeswoman, June Rosner.
Most of the 340 salvaged cars that the city found illegally operating as cabs were purchased outside of Illinois — in Indiana or other states whose vehicle departments gave the cars new titles that omitted any accident history, a process known as “title washing.” With those “clean” titles, the cars were then registered with the state of Illinois and with Chicago’s Department of Business Affairs and Consumer Protection, the city agency that regulates taxis.
And despite the city’s annual inspections of every cab, those illegal salvaged vehicles ferried passengers for years — until the Sun-Times began investigating Garber’s rapidly growing cab empire, prompting City Hall to check the vehicle histories of all licensed cabs. By using a commercial database, such as Carfax, city officials found that 5 percent of Chicago’s 6,800 licensed cabs had once been damaged badly enough that they were declared wrecks, making it illegal to ever use them as cabs in Chicago.
“All of the salvaged vehicles have been taken out of service. Most owners have put replacement vehicles into service,” says Efrat Stein, spokesman for the mayor’s chief of consumer protection, Norma Reyes.
Reyes’ agency’s crackdown last spring didn’t catch all of the salvaged vehicles in Garber’s fleet.
After City Hall’s crackdown, the Sun-Times did a sampling, examining the history of 100 other cabs operated by Garber and found that 23 had once been branded “salvaged” or “rebuilt.”
It’s unclear whether any of those vehicles remain in Garber’s fleet.
Reyes is seeking the maximum fine — $1,000 — from medallion owners whose city licenses were placed on salvaged vehicles. For the companies that managed those medallions, Reyes is seeking a fine of $750 for each day the salvaged vehicle was used as a cab, for a maximum fine of $50,000.
Meanwhile, the Illinois Secretary of State and City Hall’s inspector general are trying to determine how those salvaged vehicles were issued clean titles.
Most of the salvaged cars were concentrated among a few owners. Besides Garber and his partners, the city also has filed complaints against:
– Adrian Tudor, who faces $4.3 million in fines. He operates Medallion Leasing and Management, which had 87 salvaged vehicles, according to the city, most of them part of Globe Taxi’s fleet. Tudor didn’t return a phone call.
– Khaled Mahmoud, who faces $3.5 million in fines. He operates Chicago Taxi Medallion Management Inc., which had 69 salvaged vehicles, according to the city. Fifteen were in Globe’s fleet, while another dozen were driven as Flash Cabs.
Mahmoud has purchased several taxi medallions with loans from Garber’s Triglobal Financial Services. Mahmoud referred questions to his lawyer, Myron Auerbach, who says City Hall is seeking an “egregious” amount of fines from Mahmoud.
“My client isn’t evil,” Auerbach says. “He’s trying to be a good corporate citizen. It’s a lot of money for something my client didn’t know about. Somewhere along the line, he relied too much on a broker, who sold him bad cars, but the titles looked good. He was hoodwinked.
“These brokers are the bad guys. They were the ones supplying the cars. They’re the ones who pulled the wool over my client’s eyes.”
The city’s administrative law judges will determine the fines. And Auerbach says he hopes the judges won’t grant the city’s request for maximum penalties, saying there’s no evidence that any passenger ever was harmed riding in a salvaged vehicle.
Says Auerbach: “It’s not as if there was any injury or catastrophic injury that precipitated the city’s investigation of this.”
City Hall is seeking about $17 million in fines from taxicab medallion owners and their managers who used wrecked police cars and other salvaged vehicles as cabs in violation of city regulations. The largest offender is the city’s largest cab fleet — Chicago Carriage Cab/Royal 3 CCC Cab Co., owned and operated by Symon Garber, a Russian-born businessman.
These are the fleets the city says the illegal cabs were operating under, the number of medallions being used on illegal cabs along with the fines the city is seeking.