An investigation by the Taxi and Limousine Commission found that two-thirds of the city's hacks have improperly hit the "out of town" fare button when GPS records show they were within city limits. The rate, which is double the local rate, resulted in 1.8 million customers being overcharged.

As described by officials, the fraud might rank as the biggest in the taxi industry's history.

"We have not seen anything quite this pervasive," said Matthew W. Daus, the taxi and limousine commissioner. "It's very disturbing."

The commission has turned over its probe to the city's Department of Investigation.

"Some of these people could face serious charges," Mayor Michael R. Bloomberg said Friday.

Applying the higher rate in New York City violates the commission's rules. The penalty for it varies, from a fine of $200 to the mandatory revocation of a cab license, depending on how much was overcharged.