A $750,000 taxi medallion, a driver's suicide and a brother's guilt

Richard Chow at the wheel of his taxi in New York on Dec. 6, 2019. An economic crisis has swept over New York City’s taxi industry, spreading financial ruin and personal despair, especially for owners of medallions, the permits that let people operate cabs. (Kholood Eid/The New York Times) less Richard Chow at the wheel of his taxi in New York on Dec. 6, 2019. An economic crisis has swept over New York City’s taxi industry, spreading financial ruin and personal despair, especially for owners of ... more Photo: Kholood Eid, NYT Photo: Kholood Eid, NYT Image 1 of / 7 Caption Close A $750,000 taxi medallion, a driver's suicide and a brother's guilt 1 / 7 Back to Gallery

NEW YORK — Richard Chow discovered his younger brother’s taxi abandoned outside Carl Schurz Park, a 15-acre Manhattan oasis overlooking the East River. He began to panic.

For months, he had watched his brother and fellow cabdriver, Kenny, struggle under enormous debt. Kenny had grown distant and despondent. Now he had disappeared.

Richard searched the taxi and then the park, scouring around the gardens, the playgrounds and a bronze statue of Peter Pan. Finally, he called the police.

An economic crisis has swept over New York City’s taxi industry, spreading financial ruin and personal despair, especially for owners of medallions, the permits that let people operate cabs. More than 4,000 drivers have used their life savings to buy medallions. Richard and Kenny were among them.

For more than a decade, as The New York Times has reported this year, taxi industry leaders artificially inflated medallion prices and channeled purchasers into exploitative loans that they could not afford. The medallion bubble began to collapse in late 2014. Prices plummeted. But the drivers remained stuck with massive loans.

Thousands of owners, almost all born outside the United States, have lost all of their savings. More than 950 have filed for bankruptcy. And several have died by suicide.

Richard, then 59, and Kenny, 56, immigrants from Myanmar, had survived difficult times in three countries, always living in the same city and working in the same business. In New York, Richard had gotten Kenny into the taxi industry and persuaded him to buy a medallion, a move they believed would secure their futures.

Richard had looked after Kenny their entire lives. His first memory was of a soccer game when his brother got into an argument and he intervened to protect him from getting beat up.

Myanmar was then called Burma, and its capital, where they grew up, was called Rangoon. Richard was Yu Koon Chow; Kenny was Yu Mein Chow. Their family was from China.

The family — Richard, Kenny, their parents, their grandparents and their eight other siblings — lived in one ground-floor room with no running water. They slept on plywood on the floor. Sometimes they did not eat for days.

The family moved to Taiwan in 1980. The brothers got jobs at the same factory, dyeing wool for sweaters. They saved most of their earnings, but occasionally they splurged on a trip to the movies to see the latest American action film.

Eventually, they pursued their own American adventure. After an older sister married a Taiwanese American, they got green cards.

“We wanted to go to United States because we heard it was the best place,” another brother, Jojo, said in an interview. “We heard about it in movies, in books. We dreamed of going there.”

One night in late September 1987, several of the siblings boarded the last flight of the day from Taipei to New York. Richard and Kenny sat next to each other.

‘I’m the older brother.’

When the Chows landed at Kennedy Airport, they did not speak any English.

At first, the siblings lived with their mother in a two-bedroom apartment in Chinatown. Soon, they forged their own paths. Jojo moved to California. A sister moved to Philadelphia.

But for years, Kenny followed Richard.

They began as restaurant deliverymen, fighting the rain and snow to deliver Chinese food. Then they joined the jewelry business, as diamond setters.

In 1996, Richard and his new wife, whom he had met in Taiwan, had their first child, a girl. Three months later, Kenny and his new wife, whom he had met at his jewelry job, had their first child, also a girl.

In 2000, Richard bought a small house in Staten Island. Five months later, Kenny bought a small house in Fresh Meadows, Queens.

“I’m the older brother,” Richard said in an interview. “He looking at me. It’s Chinese tradition. The older brother takes care of young brother.”

The older brother entered the taxi industry first, too. He started driving for a fleet in 2005, after a friend suggested it. He liked the job, but he hated waking before sunrise for his shift. So the next year, when the city sold medallions at auctions, he bid.

Richard said he planned to bid about $360,000 until he met with Pearland Brokerage, run by Neil Greenbaum, an influential industry leader. He said a medallion broker with Pearland said the fleet owner Gene Freidman recently had paid $477,000. Richard bid $410,000. He won.

To pay, Richard agreed to a common financing plan. He borrowed $75,000 from family for fees and a down payment, and he signed a $358,200 loan from Pearland. The deal required him to repay within four years. He did not have a lawyer, records show.

Greenbaum and Pearland did not respond to requests for comment.

A few years later, when Kenny’s company moved overseas and laid him off, Richard recommended the cab business. Kenny became a driver and, in a few months, started asking about buying a medallion.

“I took him to Pearland,” Richard said.

By then, medallion prices were skyrocketing. Large fleet owners like Freidman were intentionally overpaying for medallions to increase the value of their portfolios. Lenders were issuing reckless loans, and as in the housing bubble, the easy money inflated prices more.

The younger brother could not secure a conventional loan. But he later told friends that a broker helped him to leverage the equity in his house for a down payment to make it work.

Kenny bought his medallion at a private sale on Aug. 5, 2011. It was only a few years after his brother’s purchase. But including the taxes and fees, it cost more than $750,000.

‘He taught me everything.’

In the beginning, the Chow brothers loved being medallion owners. They set their own hours, and they made a stable salary for the first time in their lives.

Richard bonded with other owner-drivers over breaks in Chinatown, where drivers parked and ate dinner together. He took on a paternal role, mentoring drivers from China and its neighboring countries.

Kenny did not socialize as much, but he earned respect. He made the driver Safety Honor Roll three years in a row. In 2015, when Augustine Tang, then a physical therapist aide, unexpectedly inherited a medallion, Kenny helped him. “He taught me everything,” Tang said in an interview.

As medallion prices soared, Richard did as many others did — he used the value to refinance and take out more money.

After his loan hit the four-year mark, when he was supposed to repay everything, the nonprofit Melrose Credit Union called and offered to extend his loan and lend him an additional $150,000. He agreed. He said he used the money to repay the family who had covered his down payment. Melrose issued the check in less than an hour, he added.

When medallion prices passed $1 million, the wives implored the brothers to sell.

“I’m not scared,” Kenny said, his brother recalled. “Are you scared?”

“No,” Richard said. “I trust the city.”

Soon after, the medallion bubble burst.

‘He couldn’t sleep. He couldn’t work.’

The brothers worked seven days a week, and they only made a little more than they needed for their monthly loan payments. Richard’s was $3,500; Kenny’s was more than $4,000.

The math got tougher as ride-hailing services such as Uber and Lyft grew in popularity, reducing their riders and revenues.

Richard said he and Kenny asked for leniency on their loan payments and were rebuffed. Instead, records show, Melrose moved to tighten its grip on the Chows.

Kenny’s original loans listed him as the sole borrower, and his medallion as the only collateral. But in 2016, Melrose added Kenny’s wife as a co-debtor and expanded the collateral to include everything they owned or would ever own. Kenny signed, although it is unclear if he understood the change. He did not have a lawyer.

Melrose, under pressure from its regulator, the National Credit Union Administration, also threatened to sue many medallion owners in 2017.

A review by the city in response to The Times’ series found that Melrose was one of the industry’s least forgiving lenders. The National Credit Union Administration eventually closed it, citing unsafe and unsound practices.

A spokesman for the credit union agency said he could not comment on the Chows.

In the fall of 2017, the family received another blow. Doctors diagnosed Kenny’s wife with Stage 4 colon cancer.

Kenny continued driving and paying off his medallion loans, which still totaled $600,000. But he fell far behind on his mortgage and other expenses. He also could no longer help pay his daughter’s college tuition, and she decided to drop out to help the family, a decision that deepened Kenny’s agony.

“He got depressed,” said Wain Chin, an owner-driver and family friend. “He couldn’t sleep. He couldn’t work. He had to go to the hospital all the time. He had always been quiet, but he got even quieter.”

Privately, Richard hatched a plan to save his brother. He had heard that Melrose was willing to forgive loans if borrowers forfeited their medallions and paid about $100,000. So he contacted his siblings and persuaded them to scrape together the money. Then, during Chinese New Year, in February 2018, he invited Kenny to his house.

With the help of Jojo, who was visiting from California for the holiday, Richard urged Kenny to take the money. But he refused. He did not want to burden his family.

Instead, records show, Kenny refinanced his loan again, taking out more money and using it to make his monthly payments. It was a desperate move that buried him further in debt.

Kenny also called two bankruptcy lawyers. They offered to help, but both warned he would lose his home if he filed for bankruptcy.

In early May 2018, Kenny tried to use his credit card to pay a $550 annual medallion city fee. The online system rejected the payment, Richard said, because the card was maxed out. (Kenny managed to make the payment on May 8; a spokesman for the city said it had no record of the failed attempt.)

The last time Richard saw his brother was at a Kennedy Airport lot where cabdrivers line up for lucrative fares. It was the same place they had landed three decades earlier. Kenny looked exhausted and skinny. Richard gave him a set of Buddhist meditation beads to calm his mind.

‘I’m very scared.’

On the night that Kenny disappeared, May 11, 2018, Richard clung to hope. He knew driving could be exhausting, so he thought his brother had lain down and fallen into a deep slumber. Or maybe he went on a meditation retreat, or on a hunt for extra money.

After a week, Richard led a news conference to publicize the case. He distributed posters: “MISSING: 5 feet 6 inches tall. Weight about 140 lbs. Last seen wearing white T-shirt and khaki pants.”

The next day, a television reporter knocked on Kenny’s door and asked his wife if she thought he was alive. “I have no idea,” she said through tears. “I’m very scared.”

On May 23, someone spotted a body in the East River near the Brooklyn Bridge, six miles south of the park where Kenny’s cab had been abandoned. It took the authorities three days to confirm the body was Kenny, using dental records.

At a vigil, Richard could barely speak. “I loved my brother,” he said as he wept. “He was very hardworking. He loved his family. That’s all I want to say.”

Because of the change listing Kenny’s wife as a co-debtor, she inherited his loan when he died. But it did not torment her for long. She died a few months after her husband. Their daughter, who did not get entrapped in the loan, has returned to college. She is now 23.

‘He has turned his grief into armor.’

It is impossible to know why anyone takes his or her own life. But friends believe Kenny was overwhelmed by his loans and by competition from ride-hailing. They do not think it was a coincidence that he left his cab two blocks from Gracie Mansion, the traditional home of the mayor, in a city that had ignored bad lending practices and allowed Uber and Lyft to encroach.

A spokeswoman for Mayor Bill de Blasio noted he did not take office until 2014. “One of our first actions was halting medallion sales, and we were one of the first and most ardent voices for curbing the rapid growth of corporations like Uber,” she said.

Bill Heinzen, who has been the acting head of the city’s Taxi and Limousine Commission since March, released a statement that mentioned that his own brother had died by suicide. “The death of Kenny Chow and other drivers deeply affected us,” Heinzen said.

In the days after Kenny’s death, taxi industry leaders seized on the brothers’ story. One group tapped Richard to headline an event for reporters called “How Many More Have to Die?” Another made him the voice of a television ad that asked the New York City Council to cap Uber and Lyft. (The council approved the cap in August 2018.) Even after other drivers died, the Chows continued to serve as the symbol of the devastation.

Richard has attended hearings on the crisis in Manhattan, Albany, New York, and Washington, each one a painful reminder. He usually sits in the front row. He often cries.

“He is a tireless warrior for our movement,” said Bhairavi Desai of the New York Taxi Workers Alliance, which represents cabdrivers. “He has turned his grief into armor to protect fellow drivers.”

In a series of interviews this year, Richard said he believed that he owed it to Kenny to share their story to try to prevent more suicides.

But he also said he had begun feeling the weight of carrying the industry’s collective sorrow. He said he had decided to stop answering calls from reporters. He added that his publicity had created tension with friends and angered some of his siblings.

During one conversation, at a taxi stand in Chinatown, Richard said he sometimes wondered whether the death was his fault. He had encouraged his brother to join the taxi industry, to buy a medallion, to sign the loans.

He also wondered if he could have done more when Kenny started becoming sad. Should he have lent him money? Or forced him to go to therapy? Or reported him to the city?

“I didn’t have any experience with the depression,” he said. “I didn’t know what to do.”

Today, Richard is still struggling to pay his own loan. He owes $402,000, and he said it is hard to make the $2,766 monthly payments. He cannot support his daughter and his son, 19, who are both in school.

If officials do not bail out medallion owners, as they are considering, he plans to declare bankruptcy.

For now, Richard works seven days a week, typically from 10 a.m. until midnight.

Every day, to get to work, he takes the Brooklyn Bridge, driving over the river where his younger brother took his last breath.

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If you are having thoughts of suicide, call the National Suicide Prevention Lifeline at 1-800-273-8255 (TALK).

This article originally appeared in The New York Times.