Original subtitles

Buying a winning lottery ticket is a dream come true.

Right here!

We have the winning tickets right here!

People were fascinated by this case

because everyone's fascinated by the lottery.

Narrator: When the winner of a $16 million jackpot

refuses to identify himself,

officials suspect a rigged game.

Ding! Ding! Ding! Something is screwy.

Narrator: It turns into the biggest lottery scam

in American history.

He figured out a way to keep winning the lottery.

♪♪♪

Narrator: And later,

New York City's housing crisis hits home.

Tenants are not seen as human beings.

They're standing in the way of dollar signs.

Narrator: The case of the landlord from Hell.

He cared nothing about making 23 families homeless.

Narrator: Steven Croman rules

a Manhattan real estate empire...

More money, more property.

He wanted it all.

Narrator: ...but prosecutors have other accommodations

in mind for him.

♪♪♪

♪♪♪

♪♪♪

Narrator: It's Christmastime 2010 in Des Moines,

and Iowans are feeling the holiday cheer.

The Hot Lotto jackpot keeps growing,

blowing past the $15 million mark.

It's one of the Hawkeye State's most popular lottery games...

The winning numbers right here.

...and part of an $80‐billion‐a‐year industry.

Rich: Hot Lotto is a game

that you pick five different white balls

and one hot ball.

Winning tickets.

It was a big, big jackpot at the time.

And so, people were getting excited.

Big, big, big, big, big winner.

And as jackpots rise, more and more people jump in.

Narrator: Anyone able to choose the correct six numbers

will have a very merry Christmas.

On December 23rd,

a heavy‐set man in a black jacket, cap, and hoodie

walks up to the counter of a QuikTrip convenience store

off Interstate 80.

You can't quite see, uh, his face.

You can hear his voice a little bit.

This man buys these tickets.

Goes out to his S. U. V., drives away.

♪♪♪

A few days later, December 29th, 2010,

it's announced that the winning Lotto ticket

was bought at this QuikTrip gas station

in Des Moines, Iowa.

Narrator: The prize is worth $16.5 million.

There's a buzz in the crisp winter air.

Man: Somewhere out there is a heck of a ticket

worth $16.5 million.

Narrator: Who's the lucky winner?

Forgrave: People love to talk about the lottery.

They love to play the lottery.

It's just that ‐‐ that dream chance

that you could achieve the American dream

without having to do anything.

Narrator: Days pass,

as lottery officials wait for someone to come forward.

And wait.

Man: Someone has the ticket.

Uh, the Iowa lottery wants to give away the money.

Uh, we want to show ‐‐ we want someone to come in

so we can show you the money, give you the money.

♪♪♪

Rich: Most people wait a little while

to claim their jackpot

because they want to talk to a financial advisor

and talk to a lawyer.

But then this one really took a crazy turn

because people didn't show up after 30 days,

uh, didn't show up after six months.

Narrator: Lottery officials remind the public

there's a one‐year deadline to claim the prize.

The clock ticks down, until...

Rich: It was only an hour and a half left

when, in fact, we had two lawyers walk in and said...

Ladies and gentlemen, we have the winning ticket.

Yeah, this little baby we've been looking for

for a while.

I'll hold it for a second.

We're very excited to have this ticket.

Narrator: The lawyers are hired

to represent a trust based in Belize,

a Central American tax haven.

Ding! Ding! Ding! Something is screwy.

So we, uh ‐‐ we said,

"We're not gonna pay unless we know who bought it.

Tell us who bought the ticket."

Narrator: The mystery client is unwilling to identify himself.

That's fine in other states,

where winners can claim jackpots anonymously.

But it doesn't fly in Iowa.

Rich: Ladies and gentlemen,

the Hot Lotto Jackpot claim has been withdrawn.

This man's anonymity was worth $16.5 million for him.

They didn't know that a crime had been committed.

The just knew that there was a puzzle.

Narrator: No one ever claims the prize.

This puzzle spurs the Iowa Attorney General

and Division of Criminal Investigation

to launch a probe.

It stalls for three years

until an ambitious prosecutor named Rob Sand

gets the case.

Sand: My boss just handed me the file

and said something like, "Happy birthday."

Everyone in the office knew that this was something

that was basically a pain.

Narrator: Sand specializes in financial crimes.

Sand: I think of them as crimes against gratitude,

and they're crimes of greed.

His brothers‐in‐law call him Baby Jesus,

because, you know, one, he's a bit of a square,

and, two, he can't grow a beard.

Just like Baby Jesus.

Narrator: Sand considers one piece of evidence

his best shot at solving the case ‐‐

surveillance video of the winning ticket buyer.

We were going to have to release that video

and provide people with a way to submit tips,

because if we had held that back,

you never know who might've been out there.

Narrator: Investigators post an online news release

with a link to the 74‐second clip,

appealing to the public for help.

Sand: The video itself is actually very blurry.

You really can't make out who that man might be.

Narrator: And yet they receive a stunning series of tips

within days.

It's not the face or the look of the man

that rings a bell.

It's his voice.

He has this very distinct Texas twang...

that could only belong to one man.

His name's Eddie Tipton.

Narrator: 51‐year‐old Eddie Tipton

is one of the most respected people

in the lottery business.

He works at the Multi‐State Lottery Association,

called MUSL,

and is prominently featured on its website.

MUSL supervises day‐to‐day functions of lotteries

in three dozen states and territories,

including Iowa.

Forgrave: He was a computer expert.

He would do their security audits.

He would visit other lotteries and help install machines

and help make sure that everything was clear.

Narrator: In a television interview just months earlier,

Tipton stresses the importance of password security.

Tipton: Security has always been an add‐on.

And when something happens it's too late.

The cat's out of the bag.

Narrator: Tipton is popular

with work colleagues like Jason Maher.

He was a very happy, large, boisterous guy.

You'd always know he was in the room.

And he had a very distinct voice.

He'd walk into my office,

put his hand down on my shoulder,

and say, "Hey, man, I just want you to know

I'm your friend,"

you know, with his little Southern accent.

Narrator: Tipton grew up

in a small Texas town near Houston

called Flatonia.

He shows a flair for computers early on.

Forgrave: When his brothers and sister were playing outside

on the family farm growing up,

Eddie would be inside fiddling with computers.

He went to school for information technology

at the University of Houston.

Narrator: Tipton builds a solid reputation at MUSL,

earning a promotion to information security director.

It comes with a six‐figure salary,

but Tipton isn't a big spender.

Eddie was never a glamorous person.

He had a truck. He had 300,000 miles on it.

Frugal kind of guy.

Narrator: When Tipton builds a 5,000‐square‐foot house

outside Des Moines,

it's mostly with his own hands.

Maher: He was always trying to get people

to come visit his house.

He lived out in the middle of a field

in a huge castle, just massive.

I mean, it was a hotel.

Narrator: Though close to his extended clan back in Texas,

the divorcé yearns for a family of his own.

He was a very lonely person.

Eddie always wanted a family.

He built this whole thing from scratch for a family.

And I told him, "You should get the family first,

then the massive house."

Narrator: Tipton's dream must wait.

Authorities arrest him in January 2015

for cheating the very industry he's entrusted with protecting.

♪♪♪

Next on "American Greed"...

Eddie Tipton stands trial.

But what else is he hiding?

If you've got a money tree in your backyard

you can't help but keep picking at it.

♪♪♪

♪♪♪

Narrator: Authorities suspect Eddie Tipton

of rigging an Iowa lottery worth $16 million.

The 52‐year‐old stands trial in July 2015

on two counts of felony fraud.

I thought that I had a good case.

I also thought, and knew, that a jury might disagree.

Narrator: To win the case,

Prosecutor Rob Sand must convince jurors

it's Tipton buying the winning lottery ticket

in this surveillance video.

Tipton's defense attorney, Dean Stowers,

argues it can't be his client for a very simple reason.

Stowers: Eddie Tipton didn't have a beard at that time.

And we had, uh, photographs and other evidence

to support that.

Narrator: Tipton's brother, Tommy, testifies for Eddie.

Did he have a beard on Christmas Day, 2010?

No, sir.

Narrator: Prosecutors call Eddie's friend, Jason Maher, as a witness.

There's no other guy

that could possibly have this guy's voice,

have the same height,

have the same build, be the same size.

And it was Eddie.

Narrator: The case boils down

to whether Eddie tampered with equipment

to rig the game.

The Iowa lottery uses computers

equipped with random number generators

to pick winning numbers.

The machines are sealed and operated

a few miles away at MUSL,

the Multi‐State Lottery Association

where Tipton worked for a decade.

Drawing these numbers is like launching a nuclear missile.

They have a small room.

That room is under constant camera surveillance.

When they go in, there's two computers,

both in locked glass boxes.

Narrator: Sand theorizes Eddie snuck into the room

where they draw the winning numbers,

and installed malicious software with a flash drive.

It allowed him to predict the winning numbers.

The computers that had drawn the winning numbers

had been wiped.

There was nothing left to go off of on them.

What I was doing was building a case

off of circumstantial evidence that he had done it.

Narrator: Defense Attorney Stowers attacks the State's theory,

likening it to a Hollywood movie gone bad.

He calls it the "Mission Impossible theory"

where Eddie's sneaking into the draw room

being Tom Cruise

and trying to stick this into the computer

and take over the computer.

Narrator: Stowers can't hide his contempt for the prosecution's case.

Stowers: This case is like Keystone Cops

being in charge of an investigation

and sometimes the Keystone Cops get their man anyway.

How is it that he won the biggest, uh,

random number generated game that MUSL runs

at one of its record jackpot levels?

There's too much going on

for people to think that this was just random luck.

♪♪♪

Man: We, the jury, find the defendant, Edward Tipton,

guilty of fraud as alleged in count one.

Narrator: The judge sentences Eddie to 10 years in prison.

He's free pending appeal

when news reporters catch up to him

for his reaction.

Shock. That's it.

It seemed the Hot Lotto scandal

was nearing an end.

But it was only the beginning.

Forgrave: After the trial's done.

they find out there's all these other tickets,

and I think that's where things really get interesting.

Narrator: Sand has barely boxed up his trial exhibits

when he gets a phone call that changes everything.

That phone call was a man from Texas

who asked me in a deep Texas drawl,

"Did y'all know that Eddie Tipton's brother

won the lottery maybe about 10 years ago

out west somewhere?"

Narrator: It turns out Eddie's brother, Tommy,

a former deputy sheriff

and justice of the peace from Texas,

had won the Colorado Lottery in 2005.

He claimed more than a half‐million dollars

in prize money

through an acquaintance.

Big hat, big belt buckle. loud voice.

I think as they say in Texas, "All hat, no cattle."

Narrator: Sand's team widens the investigation.

Sand: And there were always questions in the back or our head

as to whether or not there were others out there.

Reason being,

you almost never catch a financial crook

the first time they're committing their act.

Narrator: They compile a spreadsheet

of 45,000 winning lottery tickets

spread across the country,

and comb through Facebook and LinkedIn pages

for any tie to Eddie Tipton.

Forgrave: Rob Sand and his investigators

start making all these connections.

There's a connection to a ticket in Colorado back in 2005.

There's a connection to a ticket in Oklahoma,

in Kansas, in Wisconsin.

Narrator: The winner of the Wisconsin Megabucks

in December 2007

just happens to be Eddie's close friend,

Robert Rhodes.

Robert Rhodes was an incredibly successful businessman in Texas.

Uh, he had really made a name for himself.

Robert Rhodes was also the man,

when Eddie Tipton had a $16.5 million ticket in Iowa,

Eddie Tipton felt that he could trust him

and passed him this ticket and say,

"Let's figure out a way to claim this."

Narrator: Investigators uncover a conspiracy

stretching across America's Heartland.

Forgrave: So after Rob Sand and fellow investigators

look over all these possible winning tickets,

what they find,

six winning tickets in five different states

over the course of 10 years.

Narrator: But how exactly does the gamer game the system?

We were going to need to know exactly what happened

from Eddie himself.

♪♪♪

Narrator: Next on "American Greed"...

will Eddie Tipton finally come clean?

Judge: Mr. Tipton, what do you have to tell me, sir?

Um...

♪♪♪

♪♪♪

Narrator: Iowa authorities suspect Eddie Tipton,

his brother, Tommy, and close friend, Robert Rhodes,

of running the biggest lottery scam

in American history.

The alleged conspiracy spans a decade, five states,

and $25 million in jackpots.

It was the way that it stretched across multiple states.

It was the way that it stretched so far back in time.

Everything about it was unique.

Narrator: Now investigators are closer than ever

to solving the mystery of how Eddie pulled it off.

Sand: We knew that whatever Eddie had done

had something to do with draw dates.

Narrator: The answer is hidden

inside computers Eddie programmed

at the Multi‐State Lottery Association.

MUSL oversees games

in three dozen states and territories.

A lot of what he would do

would be getting these new lottery machines in order

and sending them out to states.

And that means Eddie essentially has the keys to the kingdom.

Narrator: Random number generators used in the Iowa Lottery back in 2010

are of little help to investigators.

The computers that had drawn the winning numbers

had been wiped

to Department of Defense standards three times.

There was nothing left to go off of on them.

Narrator: But Wisconsin,

where Robert Rhodes had won a $2 million Megabucks in 2007,

is another story.

Investigators recover computers from storage

that Eddie had personally delivered years earlier.

Forensic analysis reveals a tiny code

buried in the software.

Sand: This was the big mystery

that had gone on for over a decade.

And that was the smoking gun.

The amazing part of this is

this isn't some genius computer code.

This is stuff that's easily available on the Internet.

He was able to find this piece of code,

insert it into these machines,

and bypass the randomness of the lottery

to make it predictable.

Narrator: The code allows Eddie

to predict winning numbers on three days of the year ‐‐

May 27th, November 23rd, and December 29th.

If you could have the time machine

to go into the future two weeks,

wouldn't that be the first thing you'd do

is you'd find out what the winning lottery ticket is,

come back to now and then buy it?

That's what Eddie had. He made a time machine.

Narrator: Eddie brings his brother, Tommy,

and good friend, Robert Rhodes, along for the ride.

Eddie generates a list of numbers for them to play.

They use acquaintances to claim the prize money.

It works.

And it might have kept working

if Eddie had quit while he was ahead.

If you've got a money tree in your backyard,

you can't help but keep picking at it.

Narrator: When the Iowa Lottery rises to $16 million in 2010,

Eddie can't resist buying the ticket himself.

Unfortunately for him,

he picks one of the only QuikTrips

in the state of Iowa

equipped to record both video and audio.

With prosecutors closing in on the Tipton brothers

and their Texas buddy, Robert Rhodes,

Eddie can feel his luck finally running out.

He was down at his friend Robert Rhodes' house,

down in Texas.

They're sitting in the backyard and he says,

"Am I paying for my sins?

Am I paying for my sins here?"

This was really weighing on Eddie.

What Eddie Tipton doesn't realize

is that Rhodes is about to flip and turn state's evidence.

Sand: He was willing to testify against Eddie and Tommy,

and he provided us with very good evidence.

Narrator: Eddie's defense attorney negotiates a plea agreement.

The deal means Eddie's brother must plead guilty to theft,

but will only serve 75 days in jail.

Stowers: Eddie was the older brother of Tommy,

and Tommy had children,

and that was a great concern to Eddie

that Tommy not be separated from his children.

Narrator: Eddie Tipton pleads guilty in June 2017

to ongoing criminal conduct.

At the time that I wrote the code, I wasn't sure.

It was more of a trying to see if I could do it.

Maher: He probably did want to see if he could do it.

Just knowing Eddie, maybe he thought that he'd be

at a different place in his life than he was.

And he's like, "how can I get in a place where I'm happier?"

Even if he wants to tell himself

he was just doing it one step at a time

and it wasn't about the money,

there's no denying that in the back of his head,

there were dollar signs.

Narrator: Eddie Tipton addresses the court

at his sentencing hearing in August 2017,

nearly seven years after buying the lottery ticket

that sealed his fate.

Judge: Mr. Tipton?

What do you have to tell me, sir?

Well, I certainly regret my actions.

♪♪♪

It's difficult even saying that.

♪♪♪

With all the people that I know behind me

that I hurt.

And I regret it. I'm sorry.

Narrator: The judge sentences Eddie to the maximum

25 years in prison.

He and his brother must also pay back

more than $2 million in restitution.

Stowers: I think he has gone through a fair amount of depression

over the whole situation.

Narrator: Eddie Tipton is sent to serve time

at the Clarinda Correctional Facility in Southern Iowa.

He'll likely be paroled within seven years.

Eddie and Tommy Tipton declined requests

to speak with "American Greed".

Robert Rhodes pleaded guilty to fraud

and was sentenced to two years' probation

and six months of house arrest.

He did not respond

to repeated requests for comment.

The Iowa Lottery has moved past the scandal.

Business is better than ever,

though the state no longer offers Hot Lotto games.

I absolutely believe

Eddie Tipton would still be doing this today

if we would have allowed anonymous winners.

I think there's this fascination

to the anti‐hero type character.

As much as what he did was evil or full of greed,

you almost have to tip your hat to the guy.

He figured out a way to keep winning the lottery.

Narrator: For prosecutor Rob Sand,

the Iowa Lottery scandal boils down

to a simple moral straight from the Bible.

"Thou shalt not steal."

There's still a few rules that, no matter what,

uh, should apply to everybody.

Man: Yes, sir.

♪♪♪

Narrator: Next on "American Greed"...

it's the case of the landlord from Hell.

Barker: Tenants are not seen as human beings.

They're standing in the way of dollar signs.

♪♪♪

♪♪♪

♪♪♪

Narrator: New York,

a densely packed city of 8 1/2 million people,

is a world capital of finance, culture, and cuisine.

While many here take a stab at the American dream,

few can find an affordable place to live.

So New York has been in a housing crisis

for more than 100 years.

All these people coming here,

all these folks wanting to live here,

how do you have enough affordable housing?

Narrator: The government's answer is rent regulation.

For regulated apartments,

rent can only increase a certain percentage every year,

if at all,

keeping apartments lower than the market rate.

I am only here because of the rent regulations.

If I didn't have it, I wouldn't be able to stay here.

But unfortunately, what we've also seen

is that a lot of landlords have abused the process.

Tenants who live in rent‐stabilized apartments

have really paid the price.

Narrator: Among the city's most notorious landlords

is a wheeler‐dealer named Steven Croman.

Steve Croman, he was always, like,

at the top of all the bad landlord lists.

And he I think more than anybody

became, like, the face of what was happening in this city.

Narrator: Croman has come a long way

from his South Orange, New Jersey roots.

Real estate runs in his blood.

Hill: I believe his father was in real estate.

And, so, it was kind of the family business.

And he struck out on his own

and wanted to build his own real‐estate empire.

Narrator: In 1992, the 26‐year‐old

buys his first multi‐family apartment building,

north of the Little Italy neighborhood.

221 Mott Street.

Barker: Tenement buildings that are often

more than a hundred years old ‐‐

these are the sort of buildings that are very attractive

to a landlord like Mr. Croman.

Narrator: Where others see dreck, Croman sees gold.

And the young man drafts a cunning playbook.

Step one ‐‐ persuade rent‐regulated tenants

to sell their lease for a few thousand dollars,

or a couple of months of free rent.

Barker: It's called "unlocking value."

And how you unlock value

is you push out whoever is living there.

Automatically you are allowed to add 20% to the rent

just by getting somebody to leave.

But for folks like Croman, that's not enough.

What you can do is renovations.

You then are allowed to increase the rent even more.

Narrator: Just a year after Croman buys 221 Mott Street,

New York amends a law

that, for him, is like manna from heaven.

It places an upper limit on rent stabilization,

stipulating that once an apartment

crosses a certain threshold,

currently about $2,7000 a month...

Barker: Pop!

You lose another one of these apartments to the free market.

...and suddenly, Croman can rent an apartment

for as much as he wants.

And I think he was one of the first landlords

to see the combination of all of those things

and what you could do with a building.

So the building now has 18 units

and only two of them are regulated units.

Narrator: 221 Mott Street is just the start.

Over the next 25 years,

Croman expands into Chinatown, the Lower East Side,

the East and West Villages, Hell's Kitchen, and Harlem,

building a real estate empire of more than 150 properties,

from the East River to the Hudson.

We have some estimates that he was worth

upwards of $600 or $700 million dollars.

Narrator: The Jersey boy treats his family

to a lifestyle befitting his wealth.

He converts a six‐story multi‐family apartment building

on the Upper East Side

into one of Manhattan's largest single‐family homes.

There is an interesting provision

in the law in New York

that allows for an owner

to evict rent‐stabilized tenants from a property

if they intend to use the unit for themselves.

Croman went about moving each one of the tenants out,

some of whom were rent‐stabilized

and had lived there for years.

Narrator: Croman eventually settles with most tenants

for an undisclosed sum,

but his actions rankle others,

especially when they later find social media photos

posted by Croman's close friends.

They depict lavish parties in the city and the Hamptons.

Chaffee: Parties like Studio 54 parties.

We call them "bacchanals."

They're not parties.

They're just so decadent.

Narrator: Life is good for Steven Croman.

But for tenants like Cynthia Chaffee,

it's another story.

She's an artist who moved into this rent‐regulated apartment

near the Gramercy Park neighborhood in 1978.

I loved the apartment 'cause it was spacious.

I like looking at the sky.

And I love looking at the Empire State Building.

Narrator: When Croman buys her building two decades later,

Chaffee says renovations start almost immediately.

You are living in a combat zone.

♪♪♪

It's horrible.

I got so sick from his renovations.

This whole place flooded with dust.

It was everywhere.

I could still taste that dust in my mouth.

♪♪♪

Narrator: Chaffee alleges Croman sometimes

fails to maintain basic services and make repairs.

We didn't have electric for two months one year.

And then another year, we didn't have gas for a few months.

Then we've had water pouring through the bathroom ceilings.

♪♪♪

Narrator: Chaffee says Croman won't acknowledge her rent payments,

and drags her to housing court for unpaid fees.

Chaffee and other tenants claim frivolous lawsuits

are just another form of harassment

to wear them down and accept a buyout.

Chaffee: What's wrong with this picture?

We're all paying for Croman to get rich,

'cause what happens is

he uses the courts and uses harassment

to empty these apartments out,

and he is very successful at it.

Narrator: Croman denies the allegations in court filings,

and claims to strictly follow

all government building regulations.

He argues it's tenants like Chaffee who are the problem,

standing in the way of badly needed repairs

to century‐old structures.

Croman declined "American Greed's"

repeated requests for an interview.

Manhattan has many renters

who say they're fed up with Croman's tactics.

Robert Pinter claims to have experienced

similar harassment in his apartment building.

The Milwaukee native

was thrilled to find a rent‐regulated apartment

in the East Village neighborhood in 1982.

Pinter: I loved the apartment when I moved in here.

At that time, the neighborhood was,

you know, not so nice.

Narrator: The neighborhood gentrifies over the next three decades,

and then, in 2012, Steven Croman swoops in.

Pinter: Steve Croman bought our building,

I think, a month before Superstorm Sandy hit.

I always like to say

that Croman's tenure of ownership here

rivaled Sandy's ferocity of destruction.

Narrator: Pinter says it starts innocently enough,

with renovations to the apartment above him.

Then his closet collapses, and dust pours in.

I had to just grab my coat and run out of the apartment,

because I could not breathe.

Everything was contaminated, the entire apartment, with dust.

Narrator: Pinter says workmen

eventually place plastic wrapping

over the doors of apartments being renovated,

but he believes his health was damaged.

Pinter: I ended up getting a cough.

I went to see a pulmonologist

and I was diagnosed with bronchial asthma.

Narrator: While Pinter and other tenants

believe renovations are aimed at making their lives miserable,

Croman's office claims

it's doing everything by the book

to protect tenants.

Pinter says most of his neighbors caved,

accepting buyouts ranging from $5,000 to $10,000.

It's almost like he was trying to soften them up

and make people crazy enough

that they would just want to leave.

Pinter stays put.

I didn't leave during that horrendous period

simply because this is my home.

Narrator: Next on "American Greed"...

the office of the New York State Attorney General

takes on the mega‐landlord.

More money, more property, more cars ‐‐

He wanted it all.

Narrator: But can anyone stop Croman?

Want inside information from the show?

Join the "Greed" social network,

like us on "American Greed's" Facebook page.

We'll be right back.

♪♪♪

♪♪♪

Narrator: New York landlord, Steven Croman,

takes in an estimated $63 million in 2014

with a portfolio of rental buildings

stretching from one tip of Manhattan to the other.

His personal properties include

19,000‐square‐foot mansion on the Upper East Side,

reported to include two swimming pools,

and a Hamptons getaway known for parties so extravagant

they fill up gossip columns and social media posts.

Meanwhile, his work crews are in the city

causing toxic destruction in all of these buildings,

causing suffering,

and he's out there enjoying himself.

Narrator: The 48‐year‐old Jersey boy

seems to have the world at his fingertips,

and shows no signs of slowing down.

Mr. Croman is an intense man.

He is very focused on all aspects of his business.

We've been told he opens every piece of mail.

Narrator: Croman is a perennial

on lists of New York's worst landlords.

Chaffee: So it's like dealing with the Wild West out there,

and these landlords are getting away with

doing whatever they want to do.

Narrator: Chaffee and other tenants

form a grassroots protest group.

Man: Hello, New Yorkers.

We are members of the Stop Croman Coalition.

Our elected representatives must advocate

for state and federal investigation

of landlords like Steven Croman

and their questionable business practices

that harass tenants from their homes

and remove affordable housing from New York City.

The Cromans must be stopped.

[ Cheers and applause ]

Narrator: Protests fall on deaf ears for decades,

until tenants bring their complaints

to the office of the New York State Attorney General.

Attie: A group of tenants asked to come in and meet with us.

The things that they described were pretty disturbing.

Narrator: So disturbing that Jessica Attie

opens a civil investigation into the allegations.

In witness statements, former employees describe Croman

pacing his spacious Broadway office.

They say he offers up to five‐figure bonuses

for persuading tenants to take a buyout.

Barker: And he would be yelling things like,

"Buyouts, buyouts,"

like some sort of cartoon villain.

Tenants are not seen as human beings.

They're standing in the way of dollar signs.

"We just have to get this thing out of the way

and then we can make all the money that we want to make."

Narrator: Though Croman is more than willing

to confront tenants face‐to‐face,

he unleashes a brawny private investigator

and former New York City cop

named Anthony Falconite.

Attie: Steven Croman referred to Anthony Falconite

as his "secret weapon."

Anthony Falconite was the person

who would go to the tenants

and persuade, coerce, or threaten them

into taking buyouts.

Narrator: Tenants tell prosecutors

that Falconite bullies his way into units

under false pretenses.

Pinter: I heard him described as a architect,

a city inspector.

He would gain entry into their apartments.

Narrator: Once inside,

Falconite hunts for any impropriety

that may force a resident into a buyout

or an eviction.

Attie: He'd photograph their bathrooms,

their pill bottles, their mail.

He would take pictures of them

sitting there in their pajamas

or partially dressed.

They often said that he made them

feel like criminals in their own home.

Barker: It's very intimidating,

having a stranger strong‐arming you

to leave your home.

You're talking about shelter.

You're talking about somebody's home.

Narrator: Falconite did not respond to repeated requests for comment.

While Attie carefully builds a civil case against Croman,

she discovers behavior

that triggers a criminal investigation.

Her colleague, Travis Hill,

takes a deeper dive into Croman's finances.

He discovers Croman has inflated his rent rolls

to secure loans of more than $45 million.

Hill: He definitely knew the rules.

And if he couldn't get what he wanted

through legal means,

he would use fraud and deception

to go about getting more money.

Narrator: On May 9, 2016,

the Office of the New York State Attorney General

indicts Steven Croman on 20 felonies.

They range from grand larceny to tax fraud.

The scope of this enterprise was really unlike any other

that we've seen in New York.

Narrator: Prosecutors also hit Croman with a civil lawsuit,

suing him for forcing tenants

out of their rent‐regulated units.

The charges are a long time coming

for Croman's tenants.

The day that he was arrested, we were relieved.

It was the first time we were beginning to feel safe.

Narrator: Croman pleads not guilty.

If convicted, he faces up to 25 years in prison.

Next on "American Greed"...

will the charges stick against Croman?

Barker: I think he was shocked

that he was actually charged with anything

because he had done things with impunity for so long.

♪♪♪

♪♪♪

Narrator: In May 2016,

the Office of the New York State Attorney General

charges Steven Croman with 20 felonies,

including tax and mortgage fraud.

Prosecutors also sue him for harassing

and forcing rent‐stabilized tenants from their homes.

You could tell by the lawyers he hired to represent him

that he took the charges seriously.

But I don't think that he thought

that he would end up doing any time.

Narrator: Croman's team of high‐priced defense attorneys

include Benjamin Brafman...

The criminal case has absolutely nothing whatsoever

to do with the tenant‐harassment charges.

They're very good advocates.

They're very well experienced.

They understand the law.

They understand the issues.

And they advocated well for their client.

Narrator: Croman and the government spend the next year

negotiating a plea agreement.

Though Croman could face up to 25 years in prison,

Prosecutor Hill feels the real‐estate mogul

is eerily focused on the bottom line.

He was always most concerned about,

"How much money am I going to have to pay

to get out from under this?"

Narrator: On June 6, 2017,

Croman pleads guilty to three felonies.

Hill: So ultimately what we got Steven Croman for

was him lying to the banks,

falsifying documents on his loan applications

so that he could get higher loan amounts,

and then also misrepresenting his income.

Narrator: All other charges are dropped.

Croman agrees to serve one year in jail

and pays a $5 million tax settlement

for defrauding the state.

Hill: It was unprecedented.

It really was the first case of a landlord

really being prosecuted

for his real‐estate business practices

and receiving jail time for that.

Pinter: I thought even one year

was an extraordinary accomplishment.

Landlords, they never pay a price for anything.

And, and for him to go to prison,

I thought "great.

This is great."

Narrator: Some observers point out

the criminal convictions don't have anything to do

with how Croman treated his tenants.

The fact that he got any jail time is something,

but it's also something

that he wasn't actually charged at all, criminally,

with harassing tenants.

He was charged mainly with financial crimes.

Under the current law we were not able to show

and prove tenant harassment beyond a reasonable doubt.

We couldn't do that,

and it wasn't part of the indictment.

Narrator: Croman still faces a civil lawsuit.

He turns himself in on October 3, 2017

to begin serving time at the Manhattan Detention Complex.

It's known as "The Tombs."

It's a dramatic fall from grace

for a real‐estate tycoon worth an estimated $700 million.

And yet, the 51‐year‐old hardly shows any emotion.

Hill: His expression never changed

from the day he was arraigned

until the day he was sentenced and sent off to jail.

His family never showed up,

not for a single court date.

♪♪♪

Narrator: Two months in,

while Croman adjusts to his new surroundings,

the New York attorney General

announces a settlement in the civil lawsuit.

A consent decree

requires Croman to pay $8 million

to a tenant restitution fund,

the largest‐ever settlement for an individual landlord.

Croman also agrees

to let an independent management company

run more than 100 of his residential properties

for five years.

Attie: We sued Anthony Falconite, as well.

He's not allowed to have interactions with the tenants

in Mr. Croman's portfolio.

Narrator: Falconite is never criminally charged.

Pinter: I will remember the Steve Croman case

as a decisive victory for the tenants of New York City.

Attie: We know that the battle doesn't end

when we sign the settlement agreement.

We're still very committed to making sure

that he stays in line

and that he complies

with all the different terms of the agreement.

Narrator: A spokesperson for Croman's firm, 9300 Realty,

sent the following statement to "American Greed" ‐‐

"we entered into a comprehensive settlement agreement

with the state Attorney General,

which we are diligently implementing

in line with our ongoing focus on using best practices

to provide quality housing for our residents."

Croman is released from The Tombs on June 1, 2018,

after serving eight months.

He's out of jail

and running his business under supervision

for seven years.

Yet, his critics feel

Croman may resume business as usual.

You think Croman's going to stop being vicious and greedy?

I don't think so.

I don't think he's been converted.

I've prayed for his conversion.

[ Laughing ] But I don't think it's going to happen.

♪♪♪

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