Attorney General Creates $8M Restitution Fund for Former Croman Tenants
Last October, New York landlord Steven Croman was sent to jail for a year and fined $5 million after being found criminally liable for fraud and tax evasion. New York Attorney General Barbara Underwood recently announced that Croman’s former tenants could be in for a share of an $8 million restitution fund. The restitution fund comes from a separate civil action brought by the Attorney General against Croman and his agent Anthony Falconite for engaging in illegal, fraudulent, and deceptive conduct in connection with Croman’s real estate business.
The lawsuit alleged that Croman directed an illegal operation that wielded harassment, coercion, and fraud to force rent-regulated tenants out of their apartments and convert their homes into highly profitable market-rate units. The lawsuit further alleged that Croman deployed Falconite, a former New York City police officer, to frighten and intimidate rent-regulated tenants into surrendering their apartments.
The consent decree requires Croman to pay $8 million into a Tenant Restitution Fund–the largest-ever monetary settlement with an individual landlord. 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 the date of the agreement (Dec. 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 $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.