Landlord sentenced to jail for mortgage fraud

On Behalf of | Oct 13, 2017 | Real Estate Transactions

It sounds like a story straight out of the 80s: A New York City landlord does everything he can to strong-arm tenants in rent-controlled apartments out of his buildings so that he can void their leases and collect the much bigger income when he charges the new tenants the current market rate. Meanwhile, he defrauds the banks by lying and claiming that he’s already receiving those sweet market-rate rental fees — which convinces them to lend him millions.

Like a lot of the movies in the 80s that featured those kinds of stories, the landlord finally got his comeuppance: A year in jail at the notorious Riker’s Island for the bank fraud alone. Meanwhile, he’s still got to face the accusations and lawsuits that are mounting from his victimized tenants.

Some of the things that the tenants have endured really do sound like a work of fiction:

  • The landlord hired an ex-police officer to bully existing tenants that he wanted to oust.
  • The ex-officer broke into tenant’s apartments and demanded identification from people or read their mail without permission.
  • He followed some tenants to their job interviews or jobs, making his presence known to the tenant’s potential employer or colleagues.
  • He ignored safety regulations when renovating apartments that were vacated — endangering the health and safety of the remaining tenants.
  • He ordered his workers to ignore the building inspectors and did what he wanted to the buildings without bothering to secure the proper permits.

Stories like this show what can happen when a landlord doesn’t bother to follow the law and thinks that he or she is untouchable.

These days, it’s important to remember that tenants are increasingly savvy about their rights and the law — and landlords need to negotiate in an above-board manner if they want a tenant to take a buyout.

It’s also important to get good legal advice — and follow it — when looking to finance more real estate transactions. Applications based on lies are apt to blow up in a landlord’s face — and judges are not in forgiving moods these days about mortgage fraud.

An attorney can help you keep from accidentally crossing any legal lines during real estate transactions.

Source: Bedford Bowery, “Notorious Landlord Steve Croman Sentenced to a Year in Rikers, Which ‘Ain’t Exactly the Ritz’,” Diego Lynch, Oct. 03, 2017