Slumlord Steve Croman is Headed to Rikers, Must Pay $5M Settlement

Posted on: June 7th, 2017 at 5:18 am by

Croman shining light at a tenant to prevent filming

Steve Croman, a prolific New York City landlord (140 buildings) known for harassing his tenants and destroying quality of life, plead guilty yesterday to charges of fraudulently refinancing loans and comitting tax fraud. Under the terms of his plea, Croman will serve one year on Rikers Island and is forced to pay a $5 million tax settlement.

Do not pass go, do not collect $200.

This plea deal was expected, and was first reported last month.

In his announcement yesterday, Attorney General Eric Schneiderman noted the rarity of a landlord netting prison time for engaging in such practices. It’s a significant legal precendent in the effort to combat the worst city slumlords who rely on the displacement of rent-stabilized tenants to line their pockets.

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.”

From the press release:

Croman entered into the guilty plea before State Supreme Court Justice Jill Konviser, to Grand Larceny in the Third Degree (a class D felony), and Falsifying Business Records in the First Degree and Criminal Tax Fraud in the Fourth Degree (both class E felonies). Croman fraudulently obtained several multi-million-dollar refinancing loans between 2012 and 2014, and committed tax fraud in 2011 by failing to withhold appropriate NY State payroll tax from certain Croman Real Estate employee paychecks. In addition to serving jail time, Croman also must pay a $5 million tax settlement to the State Department of Taxation and Finance. Croman will be sentenced onSeptember 19, 2017.

A year-long investigation by the Attorney General’s office found that Croman purchased buildings with rent-stabilized units and, immediately after purchase, began the process of displacing rent-stabilized tenants while simultaneously attempting to refinance the initial mortgage.
The criminal referral in the Croman investigation was provided to the Attorney General’s office by the New York State Department of Housing and Community Renewal’s Tenant Protection Unit (TPU).

Of course, the legal battles certainly haven’t stopped him from purported harassment, though. Just look to 159 Stanton Street, his tenement property that was stripped of its fire-stopping material and became a purported death trap for more than a year (unbeknownst to residents). Not to mention the brief displacement of two tenants thanks to ceiling collapse. Will the lesson be learned?

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