Steve Croman after his surrender May 9, 2016.
Residents of Steve Croman’s many New York City buildings looked on in court this morning as the reviled landlord was sent away to Riker’s Island to begin serving a one-year sentence.
Croman owns around 140 buildings, including some on the Lower East Side and in Chinatown. In June, he pleaded guilty to fraudulently refinancing loans and committing tax fraud. A deal with State Attorney General Eric Schneiderman required him to serve the prison sentence and pay a $5 million fine. The judge had agreed to let Croman remain free during the Jewish High Holidays.
Here’s how the Daily News reported today’s sentencing:
For years notorious Manhattan landlord Steve Croman has dodged accusations that he engaged in aggressive harassment campaigns to force rent-regulated tenants out so he could charge higher rents. Early Tuesday Croman finally faced the music… Tenants have complained about Croman’s heartless tactics for years, most recently tenants in gentrifying neighborhoods like the Lower East Side and East Harlem where landlords are hoping to charge exorbitant rents.
Croman admitted to acquiring $45 million in loans for his properties by passing off rent-stabilized apartments as market rate units. More from The Real Deal:
At sentencing, Croman was dressed in black skinny jeans and black-and-white sneakers. When asked by Judge Jill Konviser if he would like to say any words in response to his sentence, Croman replied “no thank you.”
“I hope you spend those days thinking about those you harmed,” Konviser said. She also asked him to reflect on the religious principles that helped delay his sentencing, as he was previously scheduled to come before the judge prior to Rosh Hashanah.
In a press release put out this morning, Schneiderman said:
Steven Croman thought he was above the law. But today, he begins a sentence in Rikers Island for perpetrating an elaborate scheme that was intended to push out rent-stabilized tenants… The measures Mr. Croman took to boost his own bottom line – while blatantly disregarding the wellbeing of his tenants – are shocking. A booming real estate market is no excuse for criminal activity aimed at displacing New Yorkers already struggling with high rents. My office will continue to ensure that all landlords play by the rules – and pursue anyone who doesn’t to the fullest extent of the law.
Croman’s attorney, Ben Brafman told The Real Deal he expects his client to serve eight months in prison. The state AG has sued Croman in civil court. That case is still pending.
Steve Croman after his surrender May 9, 2016.
A judge ruled today that landlord Steve Croman can stay out of prison until after the Jewish holidays.
Back in June, the notorious property owner with many Lower East Side holdings pleaded guilty to fraudulently refinancing loans and committing tax fraud. He reached a deal with the state AG to serve one year at Rikers Island and pay a $5 million fine. Croman was accused of unlawfully displacing rent stabilized tenants.
In court this morning, Manhattan Supreme Court Judge Jill Konviser set a new court date of Oct. 3, meaning he’ll get to spend Rosh Hashanah and Yom Kippur with his family. State attorneys objected to the delay. The postponement was requested by Croman’s high powered defense lawyer.
One tenant of a Croman building, Cynthia Chaffee, told the Daily News, “It’s outrageous because we spend so many holidays with no heat, no water. No gas service. You name it… He gets to spend his whole summer in Southampton… It’s a slap in the face to tenants.”
Wasim Lone of the LES housing group GOLES was among those in the courthouse today. GOLES is part of the Stop Croman Coalition. “We’ll be coming back,” Lone told New York Business Journal. “He’s a free man for now.”
Croman was arrested in May of 2016 and accused by the AG of conducting a long campaign of intimidation and harassment against his rent stabilized tenants. Prosecutors called the plea agreement, “a significant precedent in the effort to combat landlords who base their business model on the displacement of rent-stabilized tenants.”
Steve Croman after his surrender May 9, 2016.
New York City landlord Steve Croman, who owns numerous Lower East Side buildings, pleaded guilty today to fraudulently refinancing loans and committing tax fraud. Under a plea deal with the state attorney general, he’ll serve one year in prison and pay the government $5 million.
Croman was arrested in May of 2016 and accused by the AG of conducting a long campaign of intimidation and harassment against his rent stabilized tenants. A press release from the attorney general’s office calls the settlement, “a significant precedent in the effort to combat landlords who base their business model on the displacement of rent-stabilized tenants.”
In state supreme court this morning, Croman pleaded guilty to grand larceny in the third degree, falsifying business records in the first degree and criminal tax fraud in the fourth degree. Prosecutors said he fraudulently secured several refinancing loans and committed tax fraud by failing to withhold payroll taxes from employee paychecks. Croman will be sentenced on Sept. 19. More details from the press release:
Pursuant to the plea agreement and the defendant’s allocution, Croman submitted false documents to banks, including rent rolls that falsely reflected market rate rents for units that were actually occupied by rent-stabilized tenants. Croman also inflated the amount of rent charged for certain commercial spaces in his buildings in an effort to show greater rental income. Croman falsified these rent rolls in order to inflate the annual rental income of his buildings, upon which his refinancing terms are partially based. All told, over a three-year period, Croman received more than $45 million in loans under these false pretenses. Croman also intentionally failed to withhold New York State payroll taxes from bonus payments made to a former Croman Real Estate property manager, who was paid bonuses to get rent stabilized and rent controlled tenants out of Croman apartment buildings.
In a statement, AG Eric Schneiderman said, “Steven Croman is a fraudster and a criminal who engaged in a deliberate and illegal scheme to fraudulently obtain bank loans. 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.”
A civil case against Croman by the attorney general is still ongoing.
The infamous property owner controls 140 New York City buildings, including 159 Stanton St., where tenants were relocated in February due to safety concerns from the Department of Buildings.
159 Stanton St.
The Department of Buildings issued a partial “vacate order” today for 159 Stanton St., a building owned by notorious landlord Steve Croman. Now the residents of two apartments are having to relocate until unsafe conditions in the tenement are rectified. The Red Cross was on the scene this morning to help tenants find temporary housing.
A notice pasted to the front door reads, “Do Not Enter… The Department of Buildings has determined that conditions in this premises are immediately perilous to life.” In the building’s online file, a DOB inspector added, “Construction activity in third floor apartments has caused the ceilings in apartment 1 and 2 on (the) second floor to become dislodged and in danger of further collapse.”
This past December, the tenants sued Croman in housing court, saying he was subjecting them to unsafe conditions and harassment. They were back in court for a hearing this past Thursday. We were alerted to today’s developments by the Cooper Square Committee and City Council member Margaret Chin.
This afternoon we spoke with Francis Di Donato, who has lived in the building for 25 years, and has now been forced from his home, at least temporarily. The Red Cross has found accommodations for him tonight at a YMCA facility on 47th Street, but he’ll have to find longer-term housing after the weekend. “Croman follows the same script in all of his buildings,” said Di Donato. “He makes everyone’s lives so miserable that they want to give up.” Di Donato has a 12-year-old son who goes to school in the neighborhood. He’s obviously unhappy about having to uproot him.
Another tenant, who asked not to be identified, said she noticed cracks in the ceiling Thursday afternoon. The tenant was so concerned that she didn’t stay in the apartment last night. In this week’s hearing, the judge declined to take action that would have forced Croman to make immediate repairs. “I feel very resentful,” said the tenant, “that the judge didn’t listen on Thursday and there was no adequate tenant protection plan… I was left unprotected.”
On the scene this afternoon was Sherief Gaber, an attorney with the Urban Justice Center. He’s representing the tenants in housing court. He noted that DOB inspectors singled out Croman’s construction crews for working without a permit and performing illegal electrical work. The inspectors observed sagging ceilings, which were being supported by a temporary joist. While a loose schedule was established for the repairs, the judge refused to issue an order which would have held Croman to a tighter timeline, said Gaber. As for the displaced tenants, Gaber asserted, “I believe the landlord should bear the cost of relocation.”
Last May, Croman was arrested and charged in criminal court with multiple felonies, including grand larceny, criminal tax fraud and falsifying business records. He’s being prosecuted by the State Attorney General Eric Schneiderman, who is also suing Croman in civil court.
Just four days ago, local elected officials sent a letter to Croman about “deplorable housing conditions” at 159 Stanton St. They demanded that he, “address all repair and safety issues right away.”
In a statement this afternoon, Chin said, “I am saddened and angered by the plight of these families who have been forced to vacate their homes today as a result of the irresponsible actions of their landlord. I am calling on that landlord, Steve Croman, to stop using construction to harass and victimize his hardworking tenants.”
Assemblywoman Yuh-Line Niou added in a separate statement, “It is unacceptable and infuriating that Steve Croman continues to push tenants out of their homes here on the Lower East Side… The pattern of tenant harassment at 159 Stanton is clear, and we now have tenants being ordered to vacate their homes due to unsafe conditions.”
We have contacted Croman’s press representatives for comment. This story will be updated if and when they respond.
UPDATE 2/26: A spokesperson for Croman’s company, 9300 Realty, responded with the following statement:
After we rejected a tenant-requested buyout of $300,000 per apartment, these tenants chose to call the Department of Buildings and media to complain about repairs before calling the landlord. The Department of Buildings’ inspection of the entire building on February 17th did not note any issues in these apartments and both tenants have blocked access both in and out of court to complete routine maintenance. If the tenants are genuinely motivated to get these repairs done and grant us access to these apartments, we are happy to assess and fix these issues as soon as possible.
Residents, in turn, came out with a statement of their own late last night:
Court-ordered repairs were made to these apartments in January and February, and we tenants welcomed them. Now we look forward to more repairs ordered by DOB being made so that we can return to our homes, and can live in a safe, secure, and structurally sound building. We have endured a well-documented rash of problems since Steve Croman bought the building. These problems are the reason for the HP action, including being one of the first instances of the use of the new city code for harassment of tenants. We tenants as a group made no solicitation of a buyout, and are unaware of any such attempt, so this allegation is a red herring meant to distract from the real issue of disregard for human safety in 9300 Realty buildings, including fire hazards and physical dangers like collapsing ceilings,” said the 159 Stanton Street Tenants Association.
Tenants of 159 Stanton St. hold up photos showing conditions inside their building.
Tenants at 159 Stanton St. have filed a lawsuit in housing court against Steve Croman, the controversial landlord already in the cross hairs of the state attorney general. The residents say renovations in the building have made their lives miserable, and that they’ve become victims of intimidation and harassment.
They braved bitter cold temperatures this morning, gathering in front of the building near Clinton Street with organizers from the Cooper Square Committee and lawyers from the Urban Justice Center. Also on hand were State Sen. Daniel Squadron and a representative of City Council member Margaret Chin.
According to the tenant association, residents have been forced to endure collapsing ceilings, dust and debris, mold, rats and floods. The lawsuit also alleges that poor security has led to numerous burglaries.
State Sen. Daniel Squadron.
Back in May, Croman was arrested and charged in criminal court with multiple felonies, including grand larceny, criminal tax fraud and falsifying business records. He’s being prosecuted by the State Attorney General Eric Schneiderman, who is also suing Croman in civil court. The notorious landlord owns more than 180 buildings in Manhattan, some of them on the Lower East Side.
Among the residents speaking today was Francis Di Donato, who moved into 159 Stanton 25 years ago. He has a 12-year-old son. Di Donato said Croman took him to court over money he did not owe. He was also, “visited by complete strangers who were really menacing,” [Croman has been accused of using unscrupulous “tenant relocators” to drive rent regulated residents out of his buildings.] Di Donato said he was offered, “pathetic amounts of money to move out.” There have been recurring leaks in the ceiling and cracks in the walls. One day he came home to find a gaping hole in the ceiling that burglars used to ransack his apartment.
Senator Squadron said, “Unfortunately we’ve seen it again and again and again with landlords whose strategy it is to drive you out of your homes, your lawfully protected homes, in order to make a quick buck, against the law and against every sense of decency and morals.” He pledged to stand with the residents as they wage a protracted fight against Croman.
According to a press release from Cooper square Committee, “Nearly half the apartments are vacant and were demolished more than a year ago – they are now sitting gutted, vacant, and unsecured – leaving tenants vulnerable to crime and vermin.”
Cooper Square Committee and Urban Justice Center have successfully used housing court lawsuits to win settlements for local tenants against other property owners. Tenant organizers helped form the Stop Croman Coalition, which is made up of residents from many buildings throughout the city.
We have been in touch with a spokesperson for Croman. We’ll update this story if a statement is provided to us.
UPDATE 12/16 Here’s a statement received today from a spokesperson for 9300 Realty, Croman’s company:
9300 has been very responsive to the Cooper Square Committee and the tenants at 159 Stanton St. The communication is well documented and our good faith efforts are very transparent. We have reached out to the tenants of 159 Stanton and the Cooper Square Committee on multiple occasions offering to immediately address any open issues at the building and in tenants’ apartments. Management has not been informed of any open repair items in tenant apartments, however we remain willing to immediately address any such issues as they are brought to our attention. Additionally, past repair issues have been addressed promptly. We have copied city officials on our past correspondence with these tenants (and the Cooper Square Committee) as our good faith efforts are well documented.
Croman tenants rally outside the Manhattan Supreme Court. Photo: Alex Gerald
Two controversial landlords who own a number of Lower East Side buildings were confronted by their tenants Tuesday morning.
Landlord Steve Croman appeared in Manhattan Supreme Court and was met by a coalition of his tenants who held a rally in front of the courthouse. Raphael Toledano – another New York landlord accused of tenant harassment – was in housing court across the street, and some of his tenants helped organize the rally (a “meet and greet,” as they called it) in front of the Supreme Court building at 100 Centre St.
Last month, Croman was indicted along with mortgage broker Barry Swartz on 20 felony counts related to alleged mortgage-fraud. (Read the full indictment here). On Tuesday, Supreme Court Justice Jill Konviser adjourned the hearing until Sept. 20, and Croman’s lawyer told the New York Post he’s close to reaching a plea agreement in the case.
Croman (left) leaving Manhattan Supreme Court on Tuesday. Photo: Alex Gerald
Croman is also facing a civil suit brought by State Attorney General Eric Schneiderman’s office for using an ex-cop named Anthony Falconite to intimidate tenants.
Toledano has been accused of harassing tenants as well, and appeared in New York City Housing Court Tuesday for civil and criminal contempt after failing to pay a settlement to tenants at 444 E 13th St., one of his buildings.
Nina d’Alessandro, a member of the Toledano Tenants Coalition who lives on East 5th Street, spoke at the rally. “They gain power by isolating us,” she said. “Sharing our experience makes us stronger.” The coalition was born about a year ago as residents living in several of Toledano’s buildings started organizing against their landlord. Now the coalition includes tenants from 22 different Toledano-owned buildings in lower Manhattan.
Michael Jascz, a member of the Stop Croman Coalition, runs an education nonprofit out of his East 10th Street apartment. He’s been a Croman tenant for almost a decade and says he had to deal with dangerous living conditions when Croman renovated the apartment below his. “Everything in my apartment was filled with dust,” he said, including his clothes, desk and toothbrush.
Jascz said tenants’ demands are simple: “We want to live comfortably and dream the dream that New York is.”
Tamalyn Miller, a Croman Tenant at 521 East 5th St., said that even though Croman’s case was pushed back, she’s happy. “The court case may go on and on,” she said, but Croman’s reputation is forever tarnished. “When we were going through this in 2009, 2010, nobody would listen to us,” she added.
Luis Cortes, a Croman tenant at 338 East 100th St. since 1999, voiced similar sentiments. Cortes says he’s gone nearly a year without cooking gas and months without heat, along with facing frivolous lawsuits, illegal rent hikes and other forms of harassment from Croman. Of the courts, he said, “they didn’t want to hear it. I feel like somehow they were pro-Croman.”
“But now I feel good,” Cortes said. “Since [the indictment] happened, we can tell what happened to us as tenants. Now we can be heard.”
UPDATE 7:59 p.m. An earlier version of this article didn’t specify why Toledano was in housing court. We’ve learned more about his hearing since publication, and the story has been updated to reflect the new information.
Tenants and supporters wait for Croman to leave the courthouse. Photo: Alex Gerald
Steve Croman after his surrender today. Photo: New York Daily News.
Landlord Steve Croman, who owns many Lower East Side buildings, was taken into custody this morning on criminal charges. Details from the Daily News, which broke the story:
A wealthy Manhattan landlord surrendered Monday to face criminal crimes stemming from a long-running campaign to threaten and intimidate rent-stabilized tenants into fleeing to turn their apartments into high-rent units. Steve Croman, who owns 140 apartment buildings across Manhattan, has long been the target of an investigation by New York Attorney General Eric Schneiderman. On Monday, Croman was busted on unspecified criminal charges as Schneiderman was set to file a civil suit charging him with routinely using threats and frivolous lawsuits to force out rent-protected tenants.
The AG said Croman used Anthony Falconite, a former cop, to intimidate tenants. In e-mails, Croman called Falconite his “secret weapon.” According to the civil suit, the controversial property owner routinely ignored court orders to stop illegal and dangerous construction. Local advocacy groups and elected officials have been railing against Croman’s tactics for several years.
The attorney general is expected to discuss the criminal charges later today.
UPDATE 2:12 p.m. More on the criminal charges, via the New York Times:
Croman, 49, turned himself in around 7 a.m. at the First Precinct in Lower Manhattan. He was charged with 20 felonies, including grand larceny, criminal tax fraud, falsifying business records and a scheme to defraud, relating to accusations he inflated his rental income to secure more than $45 million in bank loans. He faces up to 25 years in prison. His mortgage broker, Barry Swartz, 53, was charged with 15 felonies. The New York State attorney general’s office, which investigated Mr. Croman for almost two years, also sued Mr. Croman on Monday, seeking to force him to give up his real-estate business and pay millions of dollars in restitution to tenants and penalties.
Croman pleaded not guilty.
UPDATE 7:48 p.m. Local reaction is coming in regarding the Croman legal cases.
State Sen. Daniel Squadron: For years, I’ve worked with the community and my colleagues to address the deplorable harassment and intimidation Steve Croman’s tenants have had to endure. Organizing together, we brought these concerns to Attorney General Schneiderman and others. The charges filed today are a step towards justice for these tenants, many of them rent regulated. It puts bad actors on notice: tenant harassment is unacceptable, and will not be tolerated. I thank Attorney General Schneiderman for investigating and following-through on these very serious instances of harassment. I also thank the Stop Croman Coalition, my colleagues, Good Old Lower East Side (GOLES), Cooper Square Committee, and the Urban Justice Center for their continued advocacy and organizing.
City Council member Corey Johnson: The prosecution of Steven Croman should send a clear message: New York will enforce its housing laws. The people of Greenwich Village, Hell’s Kitchen and Chelsea who are tenants of Mr. Croman have suffered immensely, victims of the illegal tactics outlined in the Attorney General’s lawsuit. Now Mr. Croman is suffering the consequences of his actions. I applaud Attorney General Eric Schneiderman for his resolute action on this case and it is my hope that justice will be served.
Asian Americans for Equality: Today’s arrest of Steven Croman is a beacon of hope for all of those facing harassment from unscrupulous landlords across the city. This is a strong signal to property owners that business as usual is no longer the law of the land and forcing out tenants for the purposes of profit has serious consequences. In Chinatown and on the Lower East Side, AAFE sees and fights for more and more tenants everyday facing harassment and threats of eviction by these bad actors who are emboldened by the lack of real consequences. I commend Attorney General Eric Schneiderman for not taking the complaints of tenants lightly and for standing firmly on the side of those who have felt powerless and out gunned for so long.