Croman Behind 'Scheme To Deregulate' West Village Homes: Lawsuit

WEST VILLAGE, NY — Notorious landlord Steven Croman — long accused of harassing tenants to hike up rents — had been reaping the benefits of a tax break and illegally deregulating units in the process, a new lawsuit claims.

A group of tenants sued Croman for spearheading a "fraudulent scheme to deregulate apartments" all while benefiting from a tax break program intended to secure affordability, the lawsuit filed Thursday says.

"It's particularly telling that, despite his incarceration, Croman stubbornly refuses to make amends or to comply with the spirit or letter of the rent stabilization laws," the tenants' lawyer, Lucas Ferrara, said in an email.

"Incorrigible is, as incorrigible does," he said.

Croman had been benefiting from a tax program called "J-51," in which property owners are supposed to give tenants rent-stabilized leases and information about when the tax credit expires.

But tenants did not receive rent-stabilized leases, and one apartment was found to have been deregulated since 2002, court documents show.

"It's a disgrace, actually," Ferrara said.

The tenants allege they were over charged and demand back rent.

Twenty-two of the buildings' 32 units were illegally deregulated at 560-566 Hudson St., according to the suit.

A spokesman for Croman, Sam Spokony, said, "While we do not comment on pending litigation, we remain committed to diligently implementing our settlement agreement with the state Attorney General in line with our focus on using best practices to provide quality housing for our residents."

Croman, who recently purchased a nearby building that houses the White Horse Tavern, served time behind bars for tax fraud and was required to pay $8 million in restitution back to tenants he was accused of harassing under an agreement with the state Attorney General. He ultimately took a one-year sentence in a plea deal for criminal charges.

"Two years have gone by since Croman pled guilty to grand larceny, falsifying business records, and criminal tax fraud, and here he is still defrauding tenants," said Housing Rights Initiative founder Aaron Carr, whose organization has investigated misuse of the J-51 tax program that has led to various lawsuits in Forest Hills and Harlem.