George Tzannes, a Croman tenant from the East Village last month (Photo: Luisa Rollenhagen)
Just a month ago we followed faith leaders and tenants as they tried to meet their landlord, Steve Croman of 9300 Realty (and honoree on The Village Voice‘s New York City’s 10 worst landlords list twice–once in 1998 and again in 2014). They wanted to deliver letters from 32 different religious figures, decrying Croman’s alleged tenant harassment tactics, such as cutting gas and heat, dangerous construction, low buyouts, and threatening frivolous lawsuits.
Of course, they didn’t succeed in ferreting him out of his office that day–instead, they were booted from the building by police officers. But now Croman is the one in danger of doing time. Today, New York attorney general Eric T. Schneiderman announced Croman was taken into custody on 20 felony counts regarding his efforts to push rent-stabilized tenants from his buildings.
The investigation, begun in 2014, claims to have uncovered Croman’s involvement in a scheme to fraudulently obtain several multi-million dollar refinancing loans between 2012 and 2014, totaling $45 million. The criminal charges allege that Croman, who owns 140 apartment buildings across Manhattan, manipulated rent rolls to show apartments that were occupied by rent-regulated tenants as market rate. He also misrepresented the rent charged on some of his commercial spaces. These changes inflated his annual rental income, helping refinance his mortgage loans under false pretenses. His mortgage broker, Barry Swartz, is also implicated in the charges and the two could face up to 25 years in prison.
Marc Greenberg reading from some of the letters to Croman last month (Photo: Luisa Rollenhagen)
In addition to the criminal charges, which include counts of grand larceny, criminal tax fraud, and falsifying business records, the civil suit is a window into many of the machinations behind the unscrupulous landlord tactics we hear about every week–not least from the Croman Tenants’ Alliance, which has a website dedicated to describing the landlord’s alleged tactics against them and sharing resources to fight back.
Beyond the typical failure to make repairs and efforts to get rent-stabilized tenants to leave with measly “buyouts” of a few months worth of rent, the civil suit also alleges that Croman used a private investigator and former NYPD officer named Anthony Falconite as his “secret weapon” to intimidate and harass tenants. Supported by email documents and text messages, the AG alleges that Falconite regularly used false pretenses to gain access to tenants’ apartments, pretending to be a repairman, building manager, or construction department employee. He would then threaten tenants and accuse them of violating their lease.
At a Stop Croman march last month (Photo: Luisa Rollenhagen)
The civil lawsuit also describes email documents that indicate Croman and Falconite directed their employees to treat rent-regulated tenants like “targets” to be eliminated. According to the AG: “Falconite allegedly wrote to a property manager that obtaining buyouts was a ‘team sport,’ to which the property manager responded, ‘I know that!! Who’s our next target? We have to start lining them up!!!'”
The civil suit also details their efforts to increase pressure on tenants by filing “baseless lawsuits” against them–something we recently saw at Joseph Betesh’s 83 and 85 Bowery. According to the AG:
In internal emails, company employees allegedly acknowledged that such lawsuits would “aggravate” tenants or pressure them to accept buyouts. In some cases, Croman’s employees allegedly created a false record for litigation by refusing to acknowledge receipt of tenants’ rent checks and then suing them for unpaid rent—a deliberate fraud upon the court.
The suit also says Croman’s companies performed construction without permits at least 175 times, flouted stop work orders, and violated lead-safety laws–the Department of Health found impermissibly high levels of lead dust in Croman’s buildings at least 20 times, including levels up to 65 times the legal threshold.
Rev. Valerie Holly speaking at tenant March against Croman last month (Photo: Luisa Rollenhagen)
The AG framed the lawsuit as part of his office’s larger effort to crack down on bad-acting landlords. “My message to unscrupulous landlords is simple: if you put your own profits over your tenants’ legal protections, we will investigate you and prosecute you to the fullest extent of the law,” he said in a press release. Indeed, local tenant advocacy groups will be watching to see how the case progresses. Croman is only one on the list of the many landlords using similar strategies with impunity and it’s a long way to go for tenants facing harassment to get quick relief.
Croman plans to fight back, according to a statement released by his attorneys:
Mr. Croman has entered a plea of Not Guilty. The charges in this case are defensible and Mr. Croman intends to address all issues in a responsible fashion. The criminal charges have nothing whatsoever to do with allegations relating to tenant harassment.
Manhattan Borough President Gale A. Brewer said the criminal and civil suits “are all good news for tenants, and together they send a clear message to abusive landlords.”
City Council member Corey Johnson spoke for members of his district: “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.”