Croman Agrees to Pay Tenants $8 Million

Croman Agrees to Pay Tenants $8 Million

Published: 
January 2018

Predatory landlord Steven Croman will pay $8 million in restitution to tenants who took buyouts to move out of his buildings, under a consent decree announced Dec. 20 by New York State Attorney General Eric Schneiderman. 

The settlement resolves a civil suit the Attorney General filed against Croman in May 2016 for harassing tenants. It leaves Croman as owner of more than 100 buildings, but puts them under independent management for the next five years, with an independent monitor reporting on compliance with the decree’s terms for seven years. It also prohibits the landlord from hiring a “tenant relocation specialist,” and specifically bans Anthony Falconite, the former city police officer Croman hired to harass tenants, from having any contact with residents.

“Over and over again, Steven Croman acted as though he was above the law, putting profits before his tenants’ safety and well-being,” Schneiderman said in a statement. He said the $8 million was the “largest-ever settlement with an individual landlord,” and the seven years of monitoring the longest ever required in any tenant-harassment case.

Croman is currently serving a year on Rikers Island after pleading guilty to loan-fraud and tax-fraud charges previously brought by Schneiderman.

“The Attorney General was making an example of Croman, because of this whole batch of predatory landlords, this whole concept of… creating human suffering to evict tenants just to increase profits,” says Robert Pinter, who lives in a Lower East Side building Croman acquired in 2012. “It’s a warning to others, to watch it.”

The lawsuit found that Croman regularly used coercion and deception to illegally harass and evict rent-regulated tenants. Employees of his 9300 Realty company actively competed to get tenants to take buyouts, referring to them as “targets” and filing frivolous lawsuits to harass them into leaving. The buyouts offered were sometimes as low as a few months of free rent.

To be eligible for restitution, tenants must have been a tenant in a rent-stabilized or rent-controlled apartment owned by Croman between July 1, 2011 and Dec. 20, 2017 who received a buyout of less than $20,000, not including any amount that was supposed to cover rent or arrears. The Attorney General’s office will announce details of the process sometime in the next few months.

The suit also highlighted Croman’s use of construction as harassment. It found that he routinely began construction or demolition without a permit from the city Department of Buildings, ignored stop-work orders, misled building inspectors, and filed false information in order to avoid oversight. The decree also cites elevated levels of toxic lead dust in the buildings as a result of this unsafe construction.

In Robert Pinter’s building, most and possibly all of the 17 apartments were occupied by rent-stabilized tenants before Croman bought it. Within a year and a half, after a campaign of harassment and pressure 

to take buyouts, only seven were still occupied. Anthony Falconite was a regular presence. “His menacing presence was here for many months under the guise of being an inspector, an architect,” Pinter says. “Whatever it took to weasel his way into someone’s apartment and then start snapping pictures.” 

Croman began a campaign of aggressive renovation in the vacant apartments. That caused a load-bearing wall to collapse, resulting in gas leaks in the basement and the Department of Buildings issuing a partial vacate order. Pinter’s apartment was filled with dust and debris as Croman employees jackhammered plaster off of the walls to achieve his “signature look” of exposed brick. Pinter estimates that rents in the renovated and deregulated units increased from roughly $1,000-$1,200 a month to well over $3,500.

The building’s tenants association, which had already been organized and working with the Cooper Square Committee before Croman acquired it, helped inform Schneiderman’s investigation into the patterns of harassment that led to the civil suit. Pinter’s experience led him to join the Stand for Tenant Safety coalition, a citywide alliance of tenant groups that campaigned for the 12-bill package of laws intended to stem construction as harassment that the city enacted last year. 

The most important win to come from the case, Pinter says, is the strengthened community and tenant organizing across the city that emerged out of the mass harassment by Croman and other landlords.

“Once the hot spotlight is off this issue, it’s really going to be up to us, the tenants, to keep their feet to the fire,” he says. “We’re organized, we’re ready and we’re not going away. And I think that they know that, too. Our work is not done. It continues. We are the watchdogs.”