This just in from the Attorney General's office...
Attorney General Eric T. Schneiderman today announced the guilty plea of Steven Croman, a major New York City landlord with more than 140 apartment buildings across Manhattan, for fraudulently refinancing loans and committing tax fraud. Under the terms of his plea, Croman would serve one year of jail time on Rikers Island and pay a $5 million tax settlement – marking a significant precedent in the effort to combat landlords who base their business model on the displacement of rent-stabilized tenants.
Rarely, if ever, has a landlord been sentenced to serve time in jail for engaging in these practices. The jail time and multi-million settlement announced today send a strong message to landlords that the Attorney General will pursue anyone who engages in these types of practices to the fullest extent of the law.
“Steven Croman is a fraudster and a criminal who engaged in a deliberate and illegal scheme to fraudulently obtain bank loans,” Attorney General Schneiderman said. “He went to outrageous lengths to boost his bottom line – including falsely listing rent-stabilized units at market rates when his efforts to displace those renters had failed. Now Mr. Croman faces a year in Rikers and a $5 million settlement – and unscrupulous landlords are on notice that we’ll pursue them to the fullest extent of the law.”
Per The Real Deal:
Appearing at the courthouse at 100 Centre Street Tuesday morning in a dark blue suit and blue tie, Croman read an allocution in front of state Supreme Court Justice Jill Konsiver admitting details of his scheme directing employees to file documents – including inflated rent rolls – that would allow him to secure bigger mortgages on his multifamily properties.
“I knew the documents were false,” he said.
His sentencing is scheduled for Sept. 19
The AG's office still has a pending civil case against Croman accusing him of forcing tenants from their rent-controlled apartments. His next court date for the civil case is June 22, the 10th time it has been adjourned, according to the Cromans' Tenant Alliance.
Schneiderman first announced the charges against Croman in May 2016. Those charges included multiple felonies for his role in an alleged scheme to fraudulently obtain several multi-million dollar refinancing loans between 2012 and 2014.
The civil lawsuit, filed in New York Supreme Court in Manhattan and the product of an independent investigation, alleges that Croman used, among other things, the illegal tactic of pressuring tenants into surrendering their apartments by repeatedly filing baseless lawsuits against them.
Croman's real-estate empire includes 47 buildings with 617 units in the East Village. As previously noted, Croman owns more buildings in the East Village than any other landlord.