The state attorney general’s office has announced the establishment of an $8 million restitution fund for current and former tenants of notorious landlord Steve Croman.
Earlier in the summer, Croman was released from jail after serving 8 months for mortgage and tax fraud. In addition to prosecuting him on criminal charges, the AG also sued the real estate mogul in civil court. The restitution fund was part of a settlement agreement reached with Croman last year, following an investigation for harassment and coercion of rent stabilized tenants. Here’s more about the fund from a press release put out yesterday by Attorney General Barbara Underwood:
Tenants are eligible for restitution if they are or were a tenant in a rent-stabilized or rent-controlled apartment owned by Croman between July 1, 2011 and the date of the agreement (December 20, 2017); they received a buyout of less than $20,000, not including any amount that purported to cover rent or arrears; and no other tenant in their apartment received money from the restitution fund. Several hundred current and former tenants are potentially eligible to apply for these restitution funds. This week, JND Legal Administration, the claims administrator, mailed claim notices and forms to current and former rent-stabilized and rent-controlled tenants in Croman’s buildings. Those forms and additional information are also available at www.cromanrestitutionfund.com. The $8 million will be divided equally among eligible claimants and distributed to tenants in installments over a period of 38 to 42 months, with the first installment coming as soon as the claims administrator processes all of the first-round claim forms.
Another part of the agreement required Croman to turn over management of his buildings to an independent company for the next five years. More about that from the AG:
In addition to the $8 million Tenant Restitution Fund, the settlement also requires over 100 Croman residential properties to be run by a new, independent management company with no ties to Croman, for five years – the longest-ever term for independent management in OAG history. Moreover, the settlement requires seven years of independent monitorship to oversee compliance with the terms of the consent decree and provide regular reporting to the Attorney General – the longest-ever monitorship required in any tenant harassment case. Earlier this year, OAG approved New York City Management as the independent management company; the management company took over operations of the buildings on July 1, 2018. Pursuant to the settlement, New York City Management is instituting new policies at the Croman properties to ensure full compliance with the law and correction of all past violations. It will also post a comprehensive set of Tenants Rights in every building it manages.
Croman owns buildings across the city, including quite a few on the Lower East Side.
Property owner Steve Croman was sprung from jail on Friday, after serving eight months of a one-year sentence for mortgage and tax fraud. Croman owns a large portfolio of buildings throughout New York City, including many properties on the Lower East Side.
While his official release date was Sunday, Croman actually walked out of the Manhattan Correctional Facility in Lower Manhattan a couple of days early.
Croman pleaded guilty last summer, as part of a deal with the state attorney general’s office. In a separate civil case, he agreed to pay tenants $8 million and accept a court-ordered monitor for his real estate empire.
In an email, Croman’s high-powered attorney, Ben Brafman, told The Real Deal, “Anyone who gets a one-year sentence gets released after 2/3 of the sentence is served… It’s the law for city jail sentences.” Brafman said his client plans to, “relax and spend time with family.” Page Six reported that Croman’s wife is planning big “welcome home” party for him in Greece.
While news broke over the weekend regarding Croman’s release, two local elected officials were holding a news conference outside the headquarters of another controversial landlord, first son-in-law Jared Kushner. State Sen. Brad Hoylman and State Assembly member Harvey Epstein announced legislation to crack down on “predatory equity.” According to a press release:
The legislation directs the New York State Department of Finanical Services (DFS) to collect data on financial institutions that lend to property owners with the intent to displace current tenants. Specifically, the bill requires DFS to investigate the role financial institutions play in encouraging anti-tenant practices by notorious landlords like Jared Kushner, Steven Croman and Raphael Toledano. Similar to the subprime mortgage crisis of 2008, lax underwriting standards and a general lack of transparency have allowed speculators and real estate agents to secure outsized mortgages with very little discretion and oversight. Owners use these loans to make purchases based on unrealistic projections of rising rents, and in turn have difficulty paying the mortgages. Building owners — anxious to recoup on their hefty investments — often resort to abusive and exploitative tactics to drive rent-regulated tenants out. These abusive practices, known as predatory equity, are best-exemplified by figures like Steven Croman and Jared Kushner.
On Friday, the Stabilizing NYC coalition released its annual list of 10 predatory landlords. Steve Cromaan was among those property owners singled out. Local advocates and tenant leaders gathered at City Hall to draw attention to the updated list. One of the founders of the “Stop Croman Coalition,” Cynthia Chaffee, said, “Even though Croman is (was) in jail, the harassment of tenants continues, including the deprivation services, poor maintenance and the lack of repairs… We will not stop until Croman is permanently eliminated as a landlord. Period.”
On May 17, tenants living in Croman building on the Lower East Side staged rallies to drive home the point that they fully intend to keep up the pressure on the notorious landlord for as long as it takes.
Council member Carlina Rivera at Stabilizing NYC event. Photo: John McCarten/New York City Council.
Local activists hang a banner from 141 Ridge St. Photo courtesy of Cooper Square Committee.
Notorious Manhattan landlord Steven Croman isn’t expected to be released from prison until next month, but some of his tenants on the Lower East Side last week decided to give him an early welcome home present.
On Thursday, May 17, they hung a banner from 141 Ridge St. that read, “No cooking gas for nine months while Croman builds his mansion. LES tenants united!” They were joined by community organizers from the Cooper Square Committee and by several elected officials. After holding a brief press conference, they marched around the corner to 159 Stanton St., another Croman property, which had also been draped with a protest banner. The message: Tenants and their allies are on high alert for a new burst of illegal construction activity and harassment upon Croman’s release from his jail cell at the Manhattan Detention Complex.
Last year, Croman pleaded guilty to fraudulently refinancing loans and committing tax fraud. He was sentenced to one year in prison and ordered to pay $5 million in fines. In a separate civil case, he agreed to pay tenants $8 million and accept a court-ordered monitor for his real estate empire. Tenants and advocacy groups battled Croman for years, accusing him of harassment, illegal renovations and other tactics meant to force rent stabilized residents from their homes.
Silvana Jakich spoke outside her building last week.
At 141 Ridge St., Silvana Jakich said tenants’ own investigation found that Croman’s work crews used improper piping, leading Con Edison to shut off gas service to the entire building in September of last year. Pleas for a resumption of service and a rent abatement were ignored, she said. As a result, tenants went on a rent strike and took their landlord to court. Croman responded by filing a counter lawsuit for non-payment of rent.
“He’s playing the same games with tenants that he did before he was incarcerated,” said Jakich. “The only thing that’s changed is that Croman is markedly more aggressive than before. We’re all shocked that nothing’s changed for the better in our case… We’re out here today to show Croman we won’t be worn down on this gas and rent rebate issue.”
Tenants, elected officials outside 159 Stanton St. Photo courtesy of the Cooper Square Committee.
A short distance away, at 159 Stanton St. resident Kit Brauer said he and his neighbors have endured dangerous demolition projects and serious security issues. The front door lock has been broken off-and-on for years, with various construction crews coming and going.
For the past three years, the front doors of two apartments have been sealed in plastic and duct tape. After demolition, no renovation work occurred in those units. Residents fear work is about to resume, producing dangerous dust, noise and potentially cratering ceilings (these are all impacts they have experienced during previous “building improvement” ventures). “We stand together,” said Brauer. “Today is a demonstration of solidarity and strength. We will not accept construction as harassment.”
Elected officials standing side-by-side with tenants last week included State Assembly members Yuh-Line Niou and Harvey Epstein and City Council members Margaret Chin and Carlina Rivera.
“I’ve been in these apartments,” said Niou, “I’ve been in the homes of our neighbors, and the conditions are deplorable.” She noted that the Assembly recently approved several pieces of legislation to strengthen the city’s rent regulations. “We’re trying to make sure we’re not incentivizing bad landlords to harass tenants in order to get them out,” explained Niou. But she quickly added that the prospects for the legislation appear dim. “Unfortunately on the state level,” she lamented, “the Senate and the governor’s office have not actually helped us in passing these regulations to make sure we can protect our tenants better.”
Until his recent election, Epstein headed the Urban Justice Center’s Community Development Project, which has represented many New York City residents in legal cases against landlords. “Cooper Square (Committee) came to us and said, ‘We have these problems.’ We went building by building, talked about the problems, and that’s why Croman is in jail today. So we need to think about the work that Cooper did, the information they gave to the attorney general that allowed us to get the documents necessary to put predatory landlords like Croman in prison.” He went on to say, “To the tenants who are struggling so much, it is a shame what’s happening in your building and in our neighborhood, and we all have responsibilities to change (the status quo).”
Epstein noted that the Legislature in 1993 and 1997 weakened the city’s rent protections. “They allowed people like Croman to try to get tenants out because they thought the golden ticket of the market rate apartment was available to them,” said Epstein. “We need to correct our mistakes.” He added, “The system is broken… It’s set up to benefit landlords, private equity, predatory landlords.”
An apartment at 159 Stanton St. sealed in plastic.
Chin praised the Stand for Tenant Safety Coalition, a group that pressed hard for a package of 12 bills in the City Council to beef up enforcement in rent stabilized buildings. She noted that 75 new Department of Buildings inspectors are being hired. But she conceded that more work needs to be done. “The conditions here that the tenants are facing is unacceptable,” said Chin. “How can you still have a front door that doesn’t lock? The only way to fight back is to get them every single time. We cannot let them get away with anything.”
Rivera said, “Croman is a name that is synonymous with harassment, illegal activity and exploitation,” adding that after a year in prison, “He has learned nothing.”
She mentioned that the Council has stepped up its funding of local groups that help tenants organize against bad landlords. “But we also need oversight and investigation,” said Rivera. “We need to stop the banks that are lending these landlords money and allowing them to compile these portfolios of buildings… and really just take over and exacerbate the gentrification and the adverse effects on all of our communities.”
9300 Realty, Croman’s firm, released a statement last week. It read:
We have been working diligently to restore cooking gas at 141 Ridge St. The gas service cannot legally be restored without approval from both city officials and the utility companies – and due to circumstances out of our control, we have not yet been granted the necessary permits and approvals following our requests. We have already taken steps to address this issue and will continue to request the permits and approvals that are legally required in order to restore gas service.
A spokesperson, Sam Spokony, declined to comment more generally regarding last Thursday’s protest.
State Attorney General Eric Schneiderman announced yesterday evening that a settlement had been reached in a civil lawsuit that alleged harassment, coercion and fraud to force rent-regulated tenants out of their apartments. The AG calls the agreement unprecedented.
“Over and over again,” Schneiderman said in a statement, “Steven Croman acted as though he was above the law, putting profits before his tenants’ safety and wellbeing. Earlier this year, we put Mr. Croman in jail for an elaborate scheme that was intended to push out rent-regulated tenants (he also paid a $5 million as part of a plea agreement). 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.”
In the past few days, we have been talking with tenants of several Croman buildings on the Lower East Side. While pleased about yesterday’s developments, they’re also cautious and have lingering concerns after years of fighting one of New York City’s most notorious landlords.
First — details from the consent decree signed by Croman and approved by State Supreme Court Judge Shlomo Hagler. Under terms of the deal, an $8 million Tenant Restitution Fund will be established. While details won’t be announced until next year, tenants who received a buyout offer of less than $20,000 during the past six years will be eligible. Also, more than 100 Croman buildings will be run by, “a new, independent management company with no ties to Croman, for five years.” A monitor will be appointed, “who will oversee compliance with the terms of the consent decree and provide regular reporting to the Attorney General.” And Anthony Falconite, a former cop allegedly used by Croman to intimidate tenants, has been ordered to stay away from residents in Croman’s buildings.
In response to yesterday’s news, local State Assembly member Yuh-Line Niou said, “The message to unscrupulous landlords is clear: tenant harassment is simply not tolerated in New York, and our State will hold bad actors accountable for their actions… Tenants throughout my district have long voiced concerns about Croman’s housing practices. My office has heard tenant accounts describing a lack of basic repairs, caving rooftops and broken staircases caused by landlord neglect. I applaud Attorney General Schneiderman for his actions today, and I look forward to ensuring tenants have the tools necessary to recover and move past Croman’s severe negligence.”
One of the local organizations that has battled Croman’s 9300 Realty over the years is the Cooper Square Committee. Brandon Kielbasa, Cooper Square’s director of organizing and policy, told us last night, “The tenants that organized against Steve Croman deserve huge amounts credit here. Without them pushing back every time they felt harassed, this precedent-setting agreement would have never been reached. This is another major victory for NYC tenants, in a year that has been absolutely full of them.”
Croman tenants rally outside the Manhattan Supreme Court in June of 2016.
In an interview, 18th Street resident Cynthia Chaffee, a founder of the Stop Croman Coalition, said, “I’m very pleased with the outcome and grateful to the attorney general for all he’s done.” Chaffee, who’s been fighting Croman since 1999, said her pleas to city and state agencies were ignored for many years. “”We’ll sleep better at night knowing that (9300 Realty) is not in charge.”
At the same time, however, Chaffee is dismayed that Croman has apparently avoided serving his prison sentence at Rikers Island. [New York Times Oct. 3, 2017: “A notorious New York City landlord… began his own one-year residency on Tuesday on Rikers Island.”] According to the Department of Corrections website, he’s at the Manhattan Detention Complex, where Chaffee told fellow tenant advocates this week, “he’s in a private cell and can have three visitors a week.” She complained about his relatively cushy accommodations to the judge, but was told by court staff that the Department of Corrections makes all decisions about where inmates are held. We were told the same thing by the attorney general’s office.
There is optimism from tenants that yesterday’s settlement will finally offer them some relief. But in interviews over the past week, residents have told us that Croman’s criminal prosecution did little to improve their living conditions.
Just last night, tenants at 159 Stanton St., fired off an email to 9300 Realty, demanding the replacement of the broken down front door. The door, they wrote, “has for years been a menace to our quiet enjoyment of our homes, and has resulted in frequent break-ins, trespassers and incidents of tenants being unable to enter or exit the building freely.”
Kit Brauer, who has lived at 159 Stanton St. for six years said in an interview the other day that there had been “a series of patchwork fixes for years and years,” but that 9300 Realty has never taken seriously the security issues in the building. There are many other lingering problems, as well. Brauer said about half of the apartments are currently being renovated. The units were gutted, but then the work stopped, and plastic sheeting has been covering the doors for the past year. Asked what he’d like to see happen at 159 Stanton St., Brauer said, “The ideal situation is that 9300 Realty would start treating residents with basic human dignity and provide for our health and safety.”
Tenants of 159 Stanton St. participated in a protest in December of 2016.
George Tzannes, a resident of 529 East Sixth St. for more than 40 years, told a similar story. He’s been trying to get the windows in his apartment fixed for at least two years. Every time 9300 Realty sends someone to look, said Tzannes, they say the windows clearly need to be replaced, but then nothing happens. Now his six-year-old grandchild is living in the apartment, a development that finally prompted management to conduct lead testing and lead abatement. At one point, gas service was shut off in the building (a situation that wasn’t rectified for 15 months). Since his conviction in criminal court, said Tzannes, “Croman has been laying low in terms of harassing (rent regulated) tenants to get us out. That’s good. In the future I’d like to see him treat rent regulated tenants and stabilized tenants the same.”
200 Stanton St.
At 200 Stanton St., Silvana Jakich said Con Ed shut down gas service about three months ago when illegal piping was found in the building. Now residents are facing the holidays with no cooking gas and the prospect of making meals on hot plates for the forseeable future. Jakich said the building manager told her he’s waiting for Con Ed to get in touch with management. Like their counterparts in other Croman buildings, Jakich said she and her neighbors live with constant construction dust, persistent leaks, after hours work without proper permits and a general lackadaisical attitude from management about repairs. “Just when you think things might be returning to normal,” said Jakich, “some new event occurs. It’s just relentless and it doesn’t seem like (conditions) will improve no matter what happens to Croman.”
Last night Jakich told us in an email that residents are relieved that new management will be taking over, but after everything they’ve been through, they believe there are several unanswered questions.. Among them: “Why has Croman not had his license revoked?” “Why is he not paying out more money so that market rate tenants can also be compensated?” “Why isn’t Croman at Rikers like he’s supposed to be?”
We contacted Steve Croman’s spokesperson this week for comment regarding the ongoing maintenance issues in his Lower East Side buildings. There was no response. Regarding the settlement, a spokesperson told the Daily News, “We are pleased to have reached a mutually acceptable settlement with the Attorney General to end the ongoing inquiry into our business… We look forward to working with his office to implement the terms of our agreement and continuing to provide quality rental housing throughout New York City.”
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.
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.”
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.
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.