New York Attorney General Eric Schneiderman

NEW YORK CITY—Steve Croman, a landlord that owns more than 140 buildings in Manhattan, pled guilty to felony grand larceny, falsifying business records and criminal tax fraud charges on Tuesday and will serve a year in Rikers Island under a plea agreement reached with state prosecutors.

A year-long probe by the New York State 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. In addition to the one-year prison term stipulated as part of the plea agreement, Croman will pay a $5-million tax settlement to the New York State Department of Taxation and Finance in connection with fraudulently obtaining several multi-million-dollar refinancing loans between 2012 and 2014 and tax fraud in 2011 by failing to withhold appropriate New York State payroll tax from certain Croman Real Estate employee paychecks. Croman will be sentenced on Sept. 19, 2017.

Croman was arrested in May 2016 on a 20-felony count indictment filed by the Attorney General.

New York State Attorney General Eric Schneiderman said that this may be the first time a landlord will serve jail time for tenant harassment charges. “Steven Croman is a fraudster and a criminal who engaged in a deliberate and illegal scheme to fraudulently obtain bank loans,” Attorney General 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.”

According to the plea agreement and his 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, the Attorney General's office stated. Croman also falsified those rent rolls in order to inflate the annual rental income of his buildings, upon which the refinancing terms were partially based. Over the three-year period, Croman received more than $45 million in loans under these false pretenses, according to the Attorney General's office.

The Attorney General is continuing a 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.

Gov. Andrew M. Cuomo, in a prepared statement, noted that the state has “zero tolerance” for landlords who engage in tenant harassment and intimidation. “‎The Tenant Protection Unit was created to crack down on these unscrupulous practices and this prosecution sends a clear message that New York stands united and the full force of the law will be used to ensure the rights of renters are respected and protected,” the governor stated.

New York

Croman was arrested in May 2016 on a 20-felony count indictment filed by the Attorney General.

Instant Insights /

NYC Landlord to Spend One Year in Rikers

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