Taxi medallion holders face charges of fraud

SAN FRANCISCO (KGO) -- The agency that oversees San Francisco's taxicabs is cracking down on fraud in the industry.

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Charges were filed Wednesday night against four people with permits to drive cabs. The charges come two years after the ABC7 News I-Team first investigated the problem.

To obtain a permit to operate a taxi in San Francisco, by law, a person has to be a full-time driver. Two years ago, the I-Team pointed out several cases in which people were breaking the rules -- not driving -- and still making big money.

The city of San Francisco limits the number of cabs on the streets by handing out 1,500 permits or "taxi medallions." Drivers on the list wait up to 10 years to get one. Once they do, they can operate their own cab and lease out the medallion to other drivers, earning an extra $20,000-$40,000 a year.

"We want to make sure the medallions are available for working drivers, that is at the heart of Propostion K, it's at the heart of taxi governance in San Francisco, and we want to make sure the people who have medallions are actually using them as they're supposed to," San Francisco Municipal Transit Agency spokesperson Judson True said.

But, the I-Team first pointed out in July 2007 that there is widespread abuse of the system -- there were several cases in which medallion holders were not driving a cab, as required by law.

Jack and Sylvia Dudum have two taxi medallions that they lease out, but the complaint just filed by the MTA cites their primary business -- restaurants and real estate.

The Dudums own more than $15 million in property, including their $3 million home in Alamo.

The complaint says the Dudums have not driven a taxi in the past 10 years, and that they "submitted false documents in an effort to deceive the SFPD, the Taxi Commission and now the MTA."

"We're also asking for fines in some of the cases because the medallions have a certain value attached to them and the regulations provide for fines for misusing a medallion so that's what we're also going after," True said.

Jack and Sylvia Dudum face fines of more than $200,000 each, and revocation of their medallions.

RELATED STORY: The I-Team investigates unlicensed cab drivers in San Francisco

Lauretta Tacchini faces the same penalties.

Tacchini owns an upscale purse shop in Danville's Blackhawk Shopping Center, and she also has had a San Francisco taxi medallion for 10 years.

The MTA now says Tacchini has "never driven a taxicab in San Francisco despite her false statements to the contrary."

Tacchini got her medallion in 1998, when her husband was the head of the San Francisco Police Department taxi detail. Captain Steve Tacchini declined to appear on camera for this story, but he said that an internal affairs investigation in 2004 cleared him of helping his wife obtain a medallion.

Drivers the I-Team spoke with say the corruption is widespread -- that there are hundreds of others who own medallions, but do not drive, depriving working taxi drivers of badly-needed extra income.

"They using the system to their own advantage, I mean, they using it, that's it, they know they have an opportunity to use it," cab driver Jose Medina said.

"Put it this way, it's all covered up, they know they are a lot, hundreds of drivers who don't drive," cab driver Steve Tan said.

The Dudums and their lawyer declined to comment for this report. The fourth driver cited by the MTA Wednesday is a paralegal in Palo Alto, who admits to filing false waybills -- she could be on the hook for more than $400,000 in fines.

All of these cases will be heard August 7, 2009.

I-TEAM BLOG: Charges Filed: Taxi Medallions

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