Steven Croman Claims Convicted Lawyer Mitch Kossoff Tricked Him Into Deal

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Oh how the tables turn.

Steven Croman, a Manhattan landlord who spent months behind bars for jacking up rents by listing rent-stabilized apartments at market rate, claimed he’s now the one who got scammed after his former lawyer Mitchell Kossoff tricked him into a bad deal.

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Croman filed a suit accusing Kossoff, who was convicted and sentenced to up to 13.5 years in prison in May for bilking more than $14 million from his clients, of arranging a property management contract with Besen PartnersMichael Besen that was “substantially favorable” to Besen and failing to disclose that Besen separately promised Kossoff a $1 million interest-free loan, according to a lawsuit filed in New York County Supreme Court and first reported by Crain’s New York Business.

The much-loathed Croman — who harassed his tenants for years leading them to set up a website against him — wants an unspecified amount of cash in damages from Besen, who was tapped by the attorney general to manage Croman’s properties. Kossoff was not a party in the suit.

Besen and an attorney for Kossoff did not immediately respond to requests for comment. Croman’s lawyer, Kenneth Fisher, said the suit “speaks for itself” and declined further comment.

Besen’s property management company, New York City Management (NYCM), agreed to oversee 100 Croman owned-properties in 2018 while Croman served his jail sentence for tax fraud and grand larceny. Kossoff, Croman’s attorney at the time, allegedly convinced Croman to pay NYCM a fixed fee for its services, instead of one based on the percentage of rents collected, and to cover the cost of NYCM’s at least $8,000-a-month offices on West 38th Street, according to the lawsuit.

Then the pandemic hit, and vacancies in Croman’s mostly market-rate apartment rose to 17 percent while NYCM ditched its space, but NYCM’s management costs didn’t change, according to the suit. Croman claimed he repeatedly requested not to be billed for the empty offices, but NYCM continued to charge Croman for at least one floor at the unnamed West 38th Street building. 

Croman’s financial woes worsened in 2021 when Kossoff — who had been stealing millions from clients since 2017 — allegedly stole $150,000 that Croman held in escrow to pay NYCM’s fees.

Croman claimed that, had he known of Kossoff and Besen’s financial arrangement, the attorney general would have never approved of the property management agreement.

Celia Young can be reached at cyoung@commercialobserver.com.