From the Chicago Dispatcher, March 2009
Medallions in Jeopardy
The city of Chicago's recent actions may shatter investor confidence in taxicab medallions.
By: George Lutfallah
When Norma Reyes took over the reigns of the Department of Consumer Services (DCS) in 2004, one of her stated priorities was to restore the health of Chicago taxicab medallions. Before she arrived the former administration was flooding the streets with medallions and there was very little transparency on their part, particularly when it came to publicizing medallion prices. Commissioner Reyes took an active role in mending these problems, among many others, for which medallion owners and prospective investors owe her their gratitude.
However, recent events threaten even the most basic confidence investors can have in Chicago taxicab medallions. When the city seizes $95,000 in equity from a medallion on the basis that the owner didn't renew the medallion on time, why would anyone in their right mind think that investing in a Chicago taxicab medallion would be a good idea?
In this case the medallion owner was Artur Shehu. What makes this situation even worse is that at the time of the renewal deadline, Mr. Shehu was dead. Schneider Finance foreclosed on the medallion and sold it.
Deputy Commissioner Rosemary Krimbel determined that because Mr. Shehu had not renewed his medallion, all of the proceeds from the sale belonged to the City of Chicago and not to Shehu's sister and sole surviving heir, Lindita Hoxha.
In a letter dated May 21, 2008, Ms. Krimbel argued that because the medallion wasn't renewed on time, “it reverts to DCS” and that “DCS will receive all proceeds from the foreclosure sale.” Krimbel continued, “We feel this is the most equitable and efficient way to resolve this matter.”
Equitable? According to Rosemary Krimbel the “equitable” thing to do would be to seize all of the wealth this medallion investor accumulated and leave the man's family with nothing but distress. Not even a fine would be a fair enough punishment for a man who didn't renew his medallion on account of being dead.
Attorney Robert Motta got involved representing Shehu's estate and Shehu's heir Lindita Hoxha. When Mr. Motta demonstrated that Mr. Shehu was dead two months prior to the renewal deadline, DCS then said that Artur Shehu's corporation really owned the medallion, not Shehu himself, and that the corporation, according to the Secretary of State, was in good standing at renewal time. The fact that Artur Shehu was the only shareholder of that corporation was apparently irrelevant. For the purposes of taking his money, DCS decided that Artur Shehu and Shehu Corp. were mutually exclusive. He died but his corporation didn't.
But DCS also argued that Mr. Shehu had moved out of the city of Chicago. A medallion owner's principle place of business is required to be in the city of Chicago. For the purposes of proving this point, suddenly Artur Shehu and Shehu Corp. were inextricably linked. According to the Secretary of State, Shehu Corp.'s address never left Chicago. Why didn't DCS use the same standards they used for the late renewal argument? Just like Artur Shehu died but his corporation didn't, so too did Artur Shehu move but his principal place of business didn't. Why didn't DCS see it that way? I can think of 95,000 reasons.
DCS also argued that Mr. Shehu misrepresented his business address on a renewal application. Because DCS already conveniently concluded that Mr. Shehu's principal place of business had moved, by extension this proved that Shehu must have lied on his application.
Why not? The man can't defend himself. Perhaps it's for this reason that Rosemary Krimbel also decided to convict Mr. Shehu of murder without a trial.
At about the same time that Mr. Shehu died, his parents had been found shot to death. Ms. Krimbel decided that Artur Shehu murdered them. Ms. Krimbel determined that “if Mr. Shehu had timely renewed his medallion license, it would eventually have been revoked due to commission of a felony.”
Ms. Krimbel cited Section 9-112-270 of the City's Municipal Code which provides that “if any licensee shall be convicted of a felony or any criminal offense involving moral turpitude…all his licenses shall be revoked.” Furthermore Ms. Krimbel stated, “Little doubt exists that Mr. Shehu would probably have been convicted for the murder of his parents if he were still alive.”
I'm not sure where Ms. Krimbel got her law degree but she should consider getting one from a school that teaches American law. Or perhaps she should just go back to the fifth grade. I think that's where I learned that in this country, a person is presumed innocent until proven guilty in a court of law.
What this all sounds like is that the city is trying to find a way to take this money, one way or another, and they are preying on a devastated family who likely doesn't have the will to fight under such horrendous circumstances.
Ms. Krimbel, if you lost someone close to you, can you imagine what it would do to you if you had to simultaneously fight the city of Chicago in court for your inheritance? Would you find that to be equitable? Little doubt exists you would.
But let's even put all of that aside. Let's say your office is just following the law. Is that really the message you want to send to prospective Chicago taxicab medallion investors?
How valuable would Chicago medallions be to absentee investors if they realize that you are going to seize their investment if their local manager doesn't renew their medallions on time or writes down the wrong address on a renewal form?
Fortunately Robert Motta is appealing to the Circuit Court of Cook County. One of his main arguments is that while Chicago Municipal Code provides for the revocation of a license, it doesn't entitle DCS or the city of Chicago to seize any equity in the revoked medallion.
I find it ironic that if Mr. Motta wins this appeal, it may actually prove better for the city of Chicago, particularly if the city would like to fetch good prices at the next medallion auction.
If DCS and the city of Chicago continue to pursue this, they are sending a message that Chicago medallions are in jeopardy and that investing in a Chicago medallion is very risky, especially for those investors with the audacity to die in January.
The city should do the right thing. It should give Ms. Hoxha her money and leave this poor woman alone. If not out of reason or compassion, they should do it for the city's selfish financial reasons. If they don't, DCS and the city of Chicago might want to prepare for the possibility of medallion values collapsing.
George - GREAT article about that tragic case.
I.M.H.O. - I think many of these problems arise from the FACT that many/most of our politicians and bearocrats have NEVER been in business for themselves, and have NEVER driven a cab !!
...and ironically, that same $95,000 is about what it costs for the State to support a convicted murderer in jail (for about 18 months!) - not to mention a cynical beaurocrat's salary for ONE year.
Thanks Mike. Hopefully the city will come to its senses and do the right thing.
UIC research study says, Chicago Cabbies make $ 4.25 hourly!
UIC research study says Chicago cabbies make far less than even the state minumum $ 7.50 hour law and far less than what a MCdonald worker will make an hour as Mcdonald worker makes over $8 hourly.
This news was broadcasted on Today, 03/26/2009 ao NBC5 chicago 6 am news.
This is shocking and sadly this is true.
I quit driving cab just over 3 weeks ago after working for 10 hours.
I used to make only $43 for myself working 12 hours everyday. I was having hard time paying my rent and car loan and I was devasted by how less I am earning and How I am going to be almost homeless.
Thank god, I found a job at Walmart, I make $9.25 cents hourly plus the health and other benefits are great.
I make 2weeks of driving cab earning in just one week of working as cashier.
This is shocking!
Can the city really revoke a medallion if a manager fails to renew?
"How valuable would Chicago medallions be to absentee investors if they realize that you are going to seize their investment if their local manager doesn't renew their medallions on time or writes down the wrong address on a renewal form?"
In response to your question as to whether or not the city can revoke a medallion if a manager fails to renew, rule 11 of the city's rules and regulations for license managers states as follows:
"All license managers are required to conduct their activities in compliance with the provisions of the Municipal Code, particularly Chapters 9-104 and 9-112, and the rules and regulations promulgated thereunder. In the event that there is a violation of the Municipal Code or the rules and regulations promulgated thereunder in conjunction with the operation of a public passenger vehicle managed by a license manager, the license holder and the license manager shall be jointly and severally liable for any penalties assessed for such violations."
If you have any additional questions, please feel free to let us know.
Reyes is responsible for this unfair and illegal credit card ordinance scam and flooding streets with more cabs.
These days, The Chicago city streets are too bright everywhere not because of too many lights in the night time but from the top bright lights of too many empty cabs.
The city is literally flooded with more and more hundreds of cabs and most just wandering around empty.
It's too bad that it takes over one hour to get one $5 fare.
The question now is how long can this keep going on?
How will we or who will act against this massive numbers of more new cabs on street?
not just one, over 500 medallions should go to jeopardy cos this city is just flooded with too many cabs. more cabs then cars on street and mostly empty cabs wandering around.
bussiness is too slow. just like mass layoffs at other workplaces, i htink at least 500 medallions should be lost and also put a cap on new medallion once for all!
I was thinking about selling mine.