Boston police defend transfer of assets from taxi king to wife

Edward J. Tutunjian, the longtime owner of Boston Cab, worked in the garage which houses the taxi fleet in 2013. John Tlumacki/Globe Staff/File

The Boston Police Department on Thursday defended its decision to allow the city’s biggest taxi operator to transfer ownership of 362 medallions worth millions of dollars to his wife and children, just four days before being charged with federal fraud and tax offenses.

Edward J. Tutunjian, the longtime owner of Boston Cab, first requested the transfer in November 2015 and was allowed to complete the transaction July 29. On Tuesday, he was charged by prosecutors with payroll tax evasion, employing illegal immigrants, and failing to pay overtime wages.

Massachusetts law and city regulations state that the Boston police commissioner has authority to decide whether an individual is “suitable” to own a medallion, or taxi license, as long as the decision is not “arbitrary and capricious.”

Critics called the transfer an attempt by Tutunjian to protect his assets and ensure his family can continue operating his taxi empire. But the police department said it had no reason to stop Tutunjian from giving his relatives the medallions, which could be worth $130,000 each.

“The Boston Police Department was in close communication with the US Attorney’s office during this timeframe, and at the time of the transfer in July 2016, the Boston Police Department did not have any information that would have prevented the transfer,” a police spokesman said Thursday. “In fact, the department had received the approval of the US Attorney’s office to proceed in the normal course with the transfer.”

The US Attorney’s office declined to comment Thursday on its role in the transaction.

Tutunjian on Tuesday agreed to pay more than $2.3 million in fines. Prosecutors say they will seek a prison term of at least two years, followed by 12 months of supervision. Tutunjian, 66, is scheduled to appear in federal court Aug. 17.

Mayor Martin J. Walsh said Thursday the police department — the city’s chief overseer of the taxi industry — had no power to stop the transfer of the medallions to Tutunjian’s wife and children, who have long helped him run Boston Cab.

“There’s nothing the police could have done — we’re talking private sale to private sale,” Walsh said. “We regulate, and that’s all we can do. We can’t stop, or push a sale off, to my understanding.”

But in 2013, Edward F. Davis, then Boston’s police commissioner, blocked Tutunjian’s potential sale of up to 200 medallions to a New York cab titan because the prospective buyer faced $400,000 in fines for overcharging drivers for daily cab rentals there.

Councilor Tito Jackson said he was not sure if the latest transfer could be reversed, but called it another “proof point” about why oversight of the taxi industry should be moved from the Boston Police Department to the Boston Transportation Department.

“I believe this was an ill-advised decision to allow someone who was facing federal charges to transfer and liquidate his assets,” Jackson said. “This major decision to transfer nearly a quarter of the city’s taxi medallions should have had a great deal of scrutiny, forethought, and time involved in making that decision.”

Tutunjian was the focus of a Boston Globe Spotlight Team series in 2013 that found widespread exploitation of drivers in the taxi industry, and his garage was raided later that year by Internal Revenue Service agents who were seen entering with guns drawn.

Donna Blythe-Shaw, a former representative of the Boston Taxi Drivers Association, has called on Walsh and the City Council to rescind the transaction.

But David Yassky, who was chairman of the New York City Taxi and Limousine Commission under Mayor Michael Bloomberg, said he might have approved the transfer if the same circumstances arose in his city.

“Your first goal is to make sure that the [taxi] service continues,’’ said Yassky, now dean of the law school at Pace University. “I don’t want the medallions to be in limbo for months.’’

In addition, Yassky said, regulators cannot assume that Tutunjian’s family members are going to break the law, even if they helped him run Boston Cab.

Yassky headed the New York taxi commission in 2013 when Davis stopped Tutunjian from selling medallions to Evgeny Freidman, that city’s controversial taxi titan.

In that instance, Yassky said, Freidman had a “clear track record of not running medallions in the way the city wanted them to be run.’’

The 2013 Globe investigation found that Tutunjian’s business empire was worth about a quarter-billion dollars and included Back Bay apartment buildings, lucrative parking lots and garages, and vineyards in Chile.

Meanwhile, drivers at his company routinely paid dispatchers small bribes, commonly from $5 to $20, to get the keys to cabs that leased for 12-hour shifts, the investigation found. This was on top of the $100 the city allows medallion owners to charge for the right to lease a cab.

“The whole taxi situation is a bad situation, particularly when you look at the allegations of taking advantage of immigrants and drivers,” Walsh said Thursday.

But he said he had faith in the Police Department’s oversight of the industry.

“From what I understand the egregious violations that happened in the past, I haven’t heard about happening under my or Commissioner [William B.] Evans’s administration,” he said. “I certainly know he’s been on top of watching it.”