Mark Nussbaum’s ex-partner faces new lawsuit

A Nussbaum Lowinger creditor is going after the dissolved firm’s lesser-known partner, Samuel Lowinger.

Lakewood-based Blueberry Funding has filed a lawsuit in Kings County seeking to hold Lowinger responsible for $58.7 million in missing escrow funds. The lawsuit puts the focus on the other half of the now-defunct Nussbaum Lowinger, a Manhattan-based law firm at the center of an escrow fraud scandal where former clients allege they are owed over $400 million.

Thus far, much of the legal ire has been directed at Mark Nussbaum, the better-known and majority partner at the firm. But Blueberry is placing blame on Lowinger, alleging he breached his fiduciary duty to ensure the funds were held in the designated escrow account. Blueberry further alleges Lowinger knew or should have known that distributions were being made from the escrow account and the fund was being depleted. Prior to Blueberry’s lawsuit, Lowinger had only been named as a defendant in one other lawsuit. (The claims against Lowinger in that suit were discontinued.)

The mystery of Sam Lowinger

Nussbaum was known as the high-rolling point person for the firm’s escrow business. His personal assets included $2 million in crypto and $91,000 in wine and alcohol, according to recent court filings. He had sold over $200,000 in watches and jewelry.

Lowinger appears to keep a lower profile. His Instagram account is filled with the 30-something-year-old attorney playing saxophone solos. About a month after Nussbaum Lowinger’s closure, Lowinger landed a new job as an associate general counsel at a family office, according to his LinkedIn, The Promote reported.

He has largely remained quiet since the firm’s collapse, claiming that Nussbaum left him in the dark about the firm’s escrow business and was the only one with viewing access, according to court filings.

Lowinger’s attorney, Rick Supple, said his client had nothing to do with the escrow agreement that Blueberry allegedly made with Nussbaum.

“In fact, as plaintiff also knows, once it became known to Mr. Lowinger that the firm’s escrow account may have been infected by improper conduct, he took immediate action to protect all stakeholders,” said Supple. “Mr. Lowinger looks forward to addressing and putting to rest Blueberry’s false claims.”

While Lowinger has tried to distance himself from the firm’s collapse and its escrow business, he was closely involved with the transaction side of the business, according to sources and documents reviewed by TRD. These new details shed light on Lowinger’s role in the embattled firm, which has until now been opaque.

Nussbaum Lowinger’s real estate clients had courted controversy, some of whom have been targets of the Department of Justice’s mortgage fraud probe. Notably, Nussbaum Lowinger was listed as the counsel to Moshe Silber’s Rhodium Capital. (Silber pleaded guilty last year to his role in a mortgage fraud scheme.)

A voice memo and an email reviewed by TRD between 2022 and 2023 show that Lowinger had extensive dealings with the title insurer Riverside Abstract, which is currently blacklisted by Fannie Mae for acting as the title insurer on a fraudulent transaction in Troy, Michigan. One communication shows Lowinger voicing frustration with Riverside Abstract’s CEO Shaul Greenwald over undisclosed fees that appeared to hold up the closing of a deal with Shaya Prager.

(Riverside Abstract has not been accused of any wrongdoing. There is no indication Lowinger’s communications involve the Troy deal.)

In a March 2022 email, Lowinger wrote to Greenwald expressing his frustration with the title insurer for allegedly imposing last-minute fees on clients on time-of-the-essence deals.

“This can’t continue. If you value our relationship and team approach (and you indicated as much when you came down to our office), then there needs to be more transparency. This consistently gets in the way of TOE closings. In time of need, I feel your employees spending more time on settling your accounts rather than doing the title work we have entrusted them with.”

In a terse voice recording dated March 2023, Lowinger again voices concern about not having visibility into Riverside’s fees.

“I can’t have it happen on every deal. I just can’t,” he said.

Greenwald did not return a request to comment.

Mark Nussbaum has been charged by the Manhattan District Attorney’s Office with grand larceny over allegations he stole $15 million of escrow funds. Nussbaum has pleaded not guilty.

Blueberry, an alternative lender, is one of the largest creditors of Nussbaum Lowinger. Nussbaum appointed a trustee to handle the claims and take Nussbaum Lowinger through an alternative to bankruptcy known as an assignment for the benefit of creditors.

The trustee recently alleged over $300 million of Nussbaum Lowinger’s client money allegedly went to the late Mendel Steiner, a 33-year old Borough Park-based real estate investor, according to a recent lawsuit. A lawsuit brought by the trustee handling the liquidation alleges Steiner diverted that money through phony escrow accounts. Blueberry alleges funds were supposed to be held in the Nussbaum Lowinger escrow account. But the firm failed to return the funds after Steiner died in January.