Notorious landlord Steve Croman, who went to prison for mortgage crimes and paid millions in fines for his treatment of tenants, is facing fresh problems.
Axos Bank has taken steps to foreclose on a handful of Croman-owned sites in Hell’s Kitchen and East Harlem after Croman allegedly defaulted on more than $8 million in loans, according to two lawsuits that appeared in Manhattan state Supreme Court Monday.
Since August 2023, Croman reportedly has not made a payment on two loans, a $4.7 million issuance for 420-424 W. 51st St. and a $3.4 million note linked to 1978, 1980 and 1982 Third Ave., the lender claims.
The sites are sharply different. The property at 420-424, a 5-story, mixed-use walk-up near Ninth Avenue, offers 12 rental apartments. One of them, a renovated two-bedroom, was listed for about $4,600 a month in August, according to StreetEasy. Croman bought the site in 2012 for $5.3 million, according to the city register. New York Community Bank originally held its loan before later assigning it to Axos.
But none of the three Harlem properties, which hug the corner of East 109th Street, are functioning as rental buildings. Indeed, windows in two of the structures are bricked-in, though modest businesses, including a thrift shop, occupy their ground floors. Croman bought all three for $4.8 million in 2014, the register shows, and the mortgage also originated with New York Community Bank.
Croman has recently been marketing the three-site assemblage as a development site, according to sales material from the brokerage Meridian Capital Group, which says that after demolition, the properties could welcome a 33,400-square-foot structure.
Accused of repeatedly harassing rent-stabilized tenants in order to evict them at 100 or so of his buildings, a reputation that made him a regular presence on the city’s “worst landlords” list, Croman in 2017 pleaded guilty to illegally inflating the value of his properties in order to qualify for larger-than-appropriate mortgages. He paid a $5 million fine and spent eight months in prison.
But authorities also hit Croman with civil charges for his conduct, for which he had to fork over an additional $8 million into a restitution fund for his tenants and allow a third-party manager to operate his buildings until 2023.
Former state Attorney General Eric Schneiderman, who handled the cases, said at the time that Croman’s tactics included telling tenants he never received their rent checks and then suing to kick them out.
Since taking back the reins of his company, Croman has found himself in more hot water. Last year he settled with state authorities for $500,000 for allegedly overcharging nine rent-regulated tenants in five buildings, though Croman admitted no wrongdoing.
A message left for Croman, who has not yet filed legal responses to the suits, was not returned by press time. Kelly Schneid, the attorney with Moritt Hock & Hamroff who filed the suits on behalf of Axos, did not return a call for comment. And Meridian Capital Managing Director David Schechtman did not reply to an email by press time.
