Michael Cohen’s taxi cab mystery

One of the questions that prosecutors were asking in the weeks prior to the raid on Michael Cohen’s office and residencep was about his family’s taxi business. In a Chicago Sun-Times article on April 18, some of that relationship is explained. It appears that Michael Cohen’s father-in-law, Ukrainian citizen Fima Shusterman, loaned at least $20 million to Yasya Shtayner, whose family owns Chicago Medallion Management Corp. Chicago Medallion manages hundreds of taxicabs in Chicago, including 22 that the Sun-Times reports are owned by Cohen.

Taxi medallions were valuable possessions in Chicago and many other cities until the last few years, when shareriding options have entered such markets. For example, according to Chicago Dispatcher, in September 2014, medallion prices had a median value of $357,500 and an average of $341,333 (3 medallions sold during that month). Jump ahead to September 2017, when the same volume saw a median value of $40,000 and an average value of $40,000.

In January 2018, medallion prices in Chicago continued to hover between $30,000 and $40,000. If the only ownership interest is Cohen’s 22 medallions, then the total value of those medallions is approximately $900,000.

Both the Shtayners and Shusterman are immigrants from the Ukraine. Shusterman was indicted in 1993 in the District Court of the Eastern District of New York, United States v. Shusterman (1:93-cr-00186) and pleaded guilty to federal income tax fraud in connection to his New York taxicab business. According to the excellent Sun-Times reporting, Chicago Medallion has several issues with their medallions, including the 22 owned by Cohen. According to an April 13, 2018, report by Tim Novak, “A dozen of the 22 cabs operated in Chicago by Donald Trump’s personal attorney Michael D. Cohen have been suspended by city regulators” for not having insurance and in the last year, those same dozen cabs “have been cited with 89 violations.”

The mysteries of where this New York investigation will lead are interesting. Every layer that gets peeled, every revelation that is made, just raises many more. This loan situation with Shusterman would appear to be one more puzzle to be solved – what is the purpose of $20 million in loans for a fleet of medallions owned by Chicago Medallion that may be worth less than half of those loans?