AG Indicts Manhattan Landlord Steve Croman Over $45M in Faulty Loan Apps

Attorney General Eric Schneiderman

Attorney General Eric Schneiderman (Photo: Will Bredderman/New York Observer).

Steve Croman, a Manhattan landlord with a history of poor relations with his tenants, was slapped with a civil suit and indicted this morning on charges that he tried to muscle rent-stabilized tenants out of his buildings to make the units market rate. The attorney general’s office estimated that Mr. Croman and his company, 9300 Realty, received roughly $45 million in debt through the scheme over a three-year period.

Attorney General Eric Schneiderman announced the indictment of Mr. Croman at a press conference following the landlord’s appearance in Manhattan Supreme Court. The much maligned landlord and his debt broker, Barry Swartz, are accused of lying on mortgage applications to obtain financing from Capital One and New York Community Bank by saying that rent-regulated tenants in buildings were gone and the landlord was now getting market rates for apartments. But, Mr. Schneiderman said, the units were still protected and Mr. Croman went on a campaign to forcibly push out those tenants to upgrade the apartments and get a higher rent.

Mr. Croman was able to keep $1 million he would have been forced to pay to lenders if not for the favorable terms granted as a result of the falsified documents, according to Crain’s New York Business citing the complaint.

Mr. Croman, who was hit with a 20-count indictment on charges including grand larceny and filing false documents, has been the subject of a probe by the attorney general for nearly two years. He came under investigation in July 2014 over allegations that he was using illegal tactics to force out rent stabilized tenants. Mr. Swartz was charged with 15 counts of grand larceny, falsifying business records and scheme to defraud.

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