AG Sets Up $8M Croman Tenant Settlement Fund

NEW YORK CITY—Tenants and former tenants of convicted New York City landlord Steven Croman can now file for restitution as part of an $8-million civil settlement agreement over charges of harassment, coercion and fraud to force rent-regulated tenants out of their apartments in a scheme to convert their apartments into market-rate units.

The consent decree reached in the civil case requires Croman to pay $8 million into a Tenant Restitution Fund—the largest monetary settlement reached with an individual landlord in the state, according to the New York State Attorney General. 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 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.

The settlement was the result of a May 2016 civil lawsuit brought by the Attorney General’s office against Croman and his agent Anthony Falconite for allegedly engaging in illegal, fraudulent, and deceptive conduct in connection with Croman’s real-estate business.

In October 2017, Croman was sentenced to a year in jail and paid a $5-million tax settlement following separate criminal charges brought by the Attorney General’s office for fraudulent refinancing of loans and tax fraud. According to a report in Crain’s New York Business, Croman was recently released from his jail term served at Riker’s Island.

“This office has zero tolerance for predatory landlords who seek to line their pockets at the expense of their tenants’ well-being,” says Attorney General Underwood. “Now, Croman tenants will finally get the restitution and protections they deserve as a result of this unprecedented settlement—the largest-ever with an individual landlord. We will continue to do everything in our power to ensure landlords play by the rules, and pursue them to the fullest extent of the law when they don’t.”

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.

In addition to the $8-million Tenant Restitution Fund, the settlement also requires more than 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 state history. Moreover, the settlement requires seven years of an independent monitor overseeing compliance with the terms of the consent decree and provide regular reporting to the Attorney General, which is the longest-ever monitorship required in any tenant harassment case.

The Attorney General’s office earlier this year approved New York City Management as the independent management company for the Croman properties. New York City Management, which took over operations of the buildings on July 1, 2018, is instituting new policies at the Croman properties to ensure full compliance with the law and correction of all past violations.