More Foreclosures Filed Against Mark Nussbaum and Eli Tauber

Embattled New York-based attorney Mark Nussbaum and his deal partner, Eli Tauber, are now the subject of a combined 29 foreclosure lawsuits for real estate across the South and West sides of Chicago all filed within the last five months.

Lenders allege that Nussbaum — who’s under indictment by the Manhattan District Attorney for alleged grand larceny tied to missing escrow funds — and Tauber are behind on payments toward a cumulative $24 million of mortgages backed by Chicago multifamily properties.

Based on the court flings, Tauber and Nussbaum’s dealings appear to show a larger trend in the South and West sides of Chicago. Properties were purchased multiple times among a circle of investors based in New York and New Jersey and in many cases, sales of the same properties made in quick succession have dramatically increased their values. In some cases, Tauber and Nussbaum took out debt together and in other cases they did so independently, legal filings show. Even when Nussbaum’s name doesn’t appear on a mortgage it sometimes shows up in other documents related to the same property.

As Nussbaum’s multifamily portfolio begins to crumble, legal filings show how a group of run-down apartment buildings in some of Chicago’s poorest neighborhoods can become ensnared in an ever-expanding web of New York real estate drama.

The Department of Justice and the overseer of Freddie Mac and Fannie Mae, the Federal Housing Finance Agency, have been zeroing in on flips or sales between related parties and have already taken down some East Coast real estate players. Many of those at the center of the DOJ’s investigation have ties to Lakewood, New Jersey.

Some conspirators, including Eli and Aron Puretz, Moshe Silber, Fred Schulman and Boruch Drillman, have pleaded guilty to conspiracy to commit wire fraud.

The DOJ has not brought any criminal charges or allegations of wrongdoing against Nussbaum and there is no known investigation into Nussbaum’s transactions in Chicago.

But he is dealing with his own slate of legal troubles.

Nussbaum’s financial woes started earlier this year. He used his law firm’s escrow services as a pass-through to provide bridge loans to real estate dealmakers. By doing so, he raked in a fee, his clients made money and real estate owners scored quick loans to close deals.

At some point, however, Nussbaum started running a deficit. A nursing home executive named Jacob Sod filed a lawsuit demanding Nussbaum return $15 million in escrow money. Others followed suit and Nussbaum shut down his law firm in January.

In May, the Manhattan District Attorney’s office charged Nussbaum with grand larceny, alleging he took over $15 million in client escrow money. And there may be additional victims, the D.A.’s office said at the time. Nussbaum has pleaded not guilty and is out on a $500,000 bond.

The latest foreclosures

The latest batch of 12 Chicago foreclosure lawsuits to hit Nussbaum and Tauber were filed within the last few weeks. Wilmington Trust, acting as a trustee for creditors, filed all but one of the most recent foreclosure complaints against the duo. All of them allege that either Nussbaum, Tauber or both have been in default on loans tied to the properties since February or March of this year.

The city of Chicago issued an additional complaint in July against Tauber regarding a series of unaddressed code violations at 2814 East 78th Street in the South Shore neighborhood. The complaint alleges that the building, which Tauber bought for $1 million in 2024, is currently vacant and “rapidly becoming dangerous.”

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Another property facing foreclosure, 1135 West Garfield Boulevard, had been subject to a particularly extreme flip. In just one year, the sale price of the 9,000-square-foot West Garfield building more than tripled from $245,000 to $875,000.

A Lakewood-based company called CMP Trading initially bought the building in March 2022. A week later, CMP flipped the property to Myer Kahan of Lakewood for $420,000, a 71 percent increase. The same day Kahan scored a $315,000 loan — more than CMP Trading had laid down.

The property had code violations including a bathroom floor collapsing, fractures on the building’s exterior and cracks on the staircase.

A year after the flip, Nussbaum’s name started to appear on documents related to 1135 West Garfield. An LLC controlled by Nussbaum then took control of the property for $875,000 through a special warranty deed, and secured a loan from Roc Capital, a lender specializing in fix-and-flip loans, for $770,000.

The new sale price was more than double the property’s value a year earlier. Chicago records do not list any building permits, suggesting there were no substantial repairs or improvements.

Last summer, Nussbaum’s LLC cleared the violations with the city, then secured a $1.1 million loan from Cliffco Mortgage Lenders, an amount 25 percent larger than the last sale price. This time, Eliazer Tauber signed for the loan to the LLC, instead of Nussbaum.

Now, the building is facing a foreclosure lawsuit from Wilmington, which claims Nussbaum hasn’t made payments toward the building’s mortgage since February.

Nussbaum’s other transactions in Chicago follow a similar pattern, showing sudden increases in sales prices in an otherwise difficult market.

Representatives for Wilmington declined to comment and Nussbaum, Tauber and the other building’s lenders did not respond to requests for comment.

An ever expanding web

As more foreclosures come in, Nussbaum’s efforts to address his financial problems highlight his connection to other high profile real estate players who are also facing trouble.

In June, a month after Nussbaum was charged with grand larceny, his law firms, Nussbaum Lowinger and Mark J Nussbaum Associates, filed a petition in New York Supreme Court to start a process known as an Assignment for the Benefit of Creditors (ABC). The process is an alternative to bankruptcy, considered a faster and less bureaucratic process than Chapter 7 or 11.

Details about Nussbaum’s total debts and assets remain a mystery. An ABC is not overseen by a bankruptcy judge, but rather an “assignee” who acts as a liquidator and is appointed by Nussbaum.

Through the process, creditors are seeking to collect $400 million from Nussbaum’s former law firms. Nussbaum reportedly still has tens of millions of dollars owed to him on loans he made. If he can collect on those, he could repay at least some of his creditors.

Nussbaum worked with some of the New York tri-state area’s largest dealmakers, including Shaya Prager and Joel Schreiber, and he’s seeking to resolve some of his issues with former clients via the ABC process.

Prager is facing financial distress in Texas and across the Midwest, after spending billions buying up suburban office properties.

Nussbaum’s ABC process could also include going after any debts owed by the estate of the late Mendel Steiner, with whom Nussbaum once allegedly worked closely. Steiner died by suicide in January as lawsuits started piling up. Nussbaum’s attorney has alleged the $15 million that nursing home executive Sod sued him over went to a company affiliated with Steiner.