Steve Croman agrees to pay record $8M to tenants he harassed
New independent manager will run more than 100 of jailed landlord's properties
UPDATED: Thurs., Dec. 21 @ 12:17 p.m.: Steve Croman, a major multifamily landlord who is serving a jail sentence for mortgage fraud, agreed to pay a record $8 million in restitution to tenants he harassed, the New York state Attorney General’s office announced Wednesday.
An independent manager will run more than 100 of Croman’s properties, and Croman will also have to pay for a court-appointed monitor who will ensure compliance.
“Over and over again, Steven Croman acted as though he was above the law,” AG Eric Schneiderman said in a statement, “putting profits before his tenants’ safety and wellbeing.”
The agreement is the largest-ever settlement with an individual landlord in New York, according to the AG. It puts an end to a sprawling civil case brought by the AG in which Croman was accused of ringleading an operation that harassed and tricked tenants into giving up their rent-stabilized apartments.
“Croman even walks through the office chanting, ‘buyouts, buyouts!’” the AG claimed in the lawsuit. Anthony Falconite, a former New York police officer hired by Croman as a private investigator, allegedly described buyouts of rent-regulated tenants as a “team sport” and used various tactics to intimidate tenants.
As part of the announced settlement, Falconite will have to stay away from tenants at Croman-owned properties.
Croman is currently serving a one-year jail sentence in the Manhattan Detention Center, colloquially known as the Tombs, for mortgage and tax fraud, though he’s expected to be released after eight months. Although originally reported to be sent to Rikers Island, Croman is currently at the downtown jail, The Real Deal confirmed, but it’s not clear if he started his sentence there or was transferred. Croman’s attorney, Ben Brafman, declined to comment on the matter. Bowery Boogie was the first publication to notice Croman was not at Rikers in October.
As part of a plea agreement in that case, the landlord agreed to a separate $5 million tax settlement.
According to an analysis by The Real Deal, Croman took in at least $63 million from his portfolio of over 140 properties in 2014.
City and state lawmakers are pushing for tougher laws to regulate harassment that could have major implications on the city’s roughly 1 million rent-stabilized apartments. The feeling among many in the tenant-advocate movement is that landlords have been able to get away with harassment for decades, and when they get busted, the consequences are of a slap-on-the-wrist variety. But some of the proposed laws, landlords say, could persecute straight-shooting landlords and dissuade owners from upgrading their buildings.
Will Parker and Mark Maurer contributed reporting.