Prolific NYC Owner Pleads Guilty, Must Pay $5M Settlement

Steve Croman, an owner of 140 buildings who’s known for harassing his tenants, pleaded guilty recently to charges of fraudulently refinancing loans and committing 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.

Attorney General Eric Schneiderman noted the rarity of an owner netting prison time for engaging in such practices. “Steven Croman is a fraudster and a criminal who engaged in a deliberate and illegal scheme to fraudulently obtain bank loans,” 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.” All told, over a three-year period, Croman received more than $45 million in loans under these false pretenses.

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). The Attorney General also has a separate civil lawsuit against Croman for allegedly engaging in harassment of rent-regulated tenants and other illegal, fraudulent, and deceptive conduct in connection with his real-estate business. That case remains ongoing.