Taxi firm owner glad to put charges behind him

Bob Shemeligian

Monday, Jan. 26, 1998 | 10:41 a.m.

"I'm glad it's over," Milton Schwartz, co-owner of Yellow-Checker-Star Cab Company, said Friday after the Nevada Taxicab Authority board fined him $12,000 and placed him on six months probation, settling a long controversy over his purchase of part of the company.

Schwartz had been accused of purchasing part of the cab company in 1979 with money raised through fraudulent activities on the part of a business associate.

The 76-year-old cab company owner agreed to the penalty through a consent decree hammered out by deputy attorney general Jean Mischel and his attorney, Fred Berkley.

During the hearing, Berkley testified that Schwartz had no idea that the $521,000 he used to purchase one sixth of Yellow-Checker-Star might have been tainted.

"He is consenting that the $521,000 may have been ill-gotten Chase Manhattan Bank funds, not that he had any part in the scheme," said Berkley, who added that Schwartz's 19-year record of ownership of the cab company has been virtually unblemished.

"What Mr. Schwartz does not admit, and will not admit, is that he was part of some scheme to put dirty money into the taxicab industry," Berkley said. "All he says is that the money may have come from fraudulent transactions."

James Jimmerson, board chairman, said the consent decree is a "fair resolution" to a long controversy.

"I think Mr Schwartz should be commended as one-sixth owner of this company for 19 years," Jimmerson said. "I suppose we could second guess about what would have happened had this been known when he purchased the company, but this appears to be a fair resolution after a great deal of time and investigation."

The signing of the consent decree Friday resolves a controversy that dates back to a 1991 civil trial in which Schwartz claimed that Brian Greenspun and his father, late SUN Publisher Hank Greenspun, defamed him in columns. He sought $300 million in damages. A jury found that the SUN did not libel Schwartz.

The columns written by the Greenspuns centered on Schwartz's decision to maintain a 30,000-gallon propane tank in the downtown area. The Greenspuns argued that an explosion could have killed hundreds and injured thousands.

In the late 1980s, Schwartz, under pressure from city officials, moved the huge tank to an industrial, nonresidential area, then sued the SUN.

During the trial, it was learned that Schwartz's business partner, John Galanis and another business associate, Jack Isaacson, were issued a $1.2 million loan from a New York bank on Feb. 21, 1979.

The money passed through several dummy corporation accounts before $521,000 of it was used to buy the cab company, according to court testimony.

Galanis was sentenced to 20 years in a New York state prison for his role in defrauding the bank. Isaacson was indicted on a bank fraud charge but died before the case went to trial.

Following the hearing, attorney Jill Lynne, representing Greenspun, said she had no objections to the consent decree. Had the decree been rejected by the board, a full evidentiary hearing would have been conducted March 5.

During discussion of the decree, board member William Bailey noted that Schwartz is only a one-sixth owner of the company should not be further penalized during his suspension if a violation occurs involving day-to-day operations at the yard.

But Jimmerson noted that Schwartz as "captain of the ship" is responsible for the company's operations. "But, we as a board will act fairly to determine whether Mr. Schwartz meets the terms of his probation."