Real Estate Weekly
Image default

Croman agrees to pay $8M in restitution for tenant harassment case

After a fraud conviction in October earned him a year on Rikers Island, one of the city’s most notorious landlords has agreed to pay a record $8 million in restitution to settle a civil suit brought against him by the state for tenant harassment.

Steve Croman

Steven Croman, who earned the nickname “The Bernie Madoff of Landlords” for his scheme to use phony rent roles to pad his pockets with bank money and flip rent-regulated apartments into luxury units, was accused of systematically harassing rent-regulated tenants into leaving some 140 apartment buildings in Manhattan.

Croman pleaded guilty to grand larceny, falsifying business records and tax fraud and landed a yearlong jail sentence, a rarity for a landlord of his clout.

New York Attorney General Eric Schneiderman also accused Croman of using bullying tactics, forced buyouts and frivolous lawsuits to push residents out of his buildings, most of which are located in the East Village. However, because the state has a high bar for proving criminal harassment against a tenant, Schneiderman opted to address those charges in civil court.

This week, Croman reached a settlement with the state in which he admitted no liability but agreed to shell out $8 million into a tenant restitution fund, the largest sum ever imposed on an individual landlord in New York. This comes in addition to the $5 million tax settlement Croman already paid as part of his criminal plea deal.

He also agree to turn more than 100 properties over to an independent monitor for five years—the longest such agreement ever enforced—and to have a compliance monitor observe his company’s operations for seven years and report back to the attorney general’s office.

“Over and over again, Steven Croman acted as though he was above the law, putting profits before his tenants’ safety and well being.” Schneiderman wrote in a press release issued Thursday. “Earlier this year, we put Mr. Croman in jail for an elaborate scheme that was intended to push out rent-regulated tenants. And today, we’re ensuring tenants get the restitution and protections they deserve – including the largest-ever settlement with an individual landlord, and unprecedented independent management and monitoring at his properties.”

Schneiderman’s office will issue official guidelines for affected residents to apply for restitution early next year. As base rule, all rent-stabilized or rent-controlled tenants who lived in a Croman-owned apartment between July 1, 2011 and December 20, 2017 will be eligible, provided they received a buyout of less than $20,000.

Related posts

Piedmont Partners with architect Morris Adjmi on 60 Broad transformation


Florida East Coast Realty Sells Coral Gables Office Condo Unit at its 2020 Ponce de Leon Blvd. Building for $780 per Square Foot


Record number of $100-plus leases signed in 2022 as tenants seek premium space