When Mark Nussbaum suddenly shut down his law firm, he sent a letter to his clients.
“I value the connections we have made and the relationships we have formed,” he wrote in the January note. “I am justifiably proud of the transactions we have consummated and closed together.”
Things had spiraled quickly. Nursing home executive Jacob Sod filed a lawsuit alleging Nussbaum refused to hand over $15 million in escrow funds on Jan. 8. A day later, Mendel Steiner, a client of Nussbaum’s, died by suicide in a Manhattan hotel room. On Jan. 15, Nussbaum shut down the firm, Nussbaum Lowinger, hiring Ethan Kobre of Schwartz Sladkus Reich Greenberg Atlas for the dissolution.
As the firm has wound down, the phrases from his letter stopped sounding so mundane. Lawsuits have piled up, and rumors spread that hundreds of millions of dollars — not just the $15 million — went missing while in Nussbaum’s escrow accounts. Some of the “connections” and “relationships” of his memo are with players entangled in the Department of Justice and Federal Housing and Finance Agency’s investigation into mortgage fraud, including indicted investors Moshe Silber and Boruch Drillman. And his “transactions” include receiving funds from Drillman in a deal to flip the Williamsburg of Cincinnati property — which is at the center of the DOJ’s investigation into mortgage fraud, according to sources familiar with the matter. Nussbaum has not been accused of any wrongdoing in that deal.
Nussbaum recently hired prominent criminal defense attorney Zach Intrater of Agnifilo Intrater, according to sources familiar with the matter. The Real Deal is not aware of any active criminal investigation into Nussbaum.
Still, he seems to be everywhere: His name shows up on deals with Drillman. He is listed as Silber’s Rhodium Capital Advisor’s attorney. He was the escrow agent for Baltimore properties owned by Steiner, who was in his early 30s when he died.
The story of how Nussbaum ended up at the center of these suspect transactions — some leading to tragedy — sheds light on an increasingly large and complex commercial real estate scandal.
On the side of the law
Nussbaum, raised in Monsey, graduated from Yeshiva University and New York Law School. He landed a job at law firm Altman Schochet in 2007 before launching Mark J. Nussbaum & Associates and eventually Nussbaum Lowinger with a young lawyer from Cedarhurst who plays the saxophone named Samuel Lowinger.
Their Manhattan firm, Nussbaum Lowinger, focused on real estate transactions. New York City and New Jersey real estate operators used Nussbaum’s legal team to close on routine purchases and loans. Nussbaum also helped set up limited liability companies. One source noted Nussbaum Lowinger was excellent at picking up on small details in real estate contracts that otherwise went unnoticed.
Nussbaum established himself as a trusted advisor within the Orthodox Jewish real estate community. He did well, building a palatial home in Suffern, New York in Rockland County. A video appears to show the opulent interior of his living room.
In New York City, Nussbaum’s name showed up on $129 million of real estate transactions between 2015 and 2024, according to a TRD analysis. He was involved in at least $71.1 million of loans in New York City. The number of transactions made him a small fish in New York City, but much of his business occurred outside the five boroughs, sources and loan docs show.
Side business
At some point, Nussbaum began moving away from transactional law to become a dealmaker himself. He became the ultimate connector and discovered he could use his firm as a middleman.
One product he offered was bridge loans. When one dealmaker within the Orthodox community needed capital, Nussbaum would connect them to someone in his network who wanted to invest, often quickly, according to sources and lawsuits.
In various capacities, Nussbaum worked with some of New York’s biggest players. Many of them had problems and ran into issues with leverage.
Nussbaum lent $17 million to WeWork’s first investor Joel Schreiber for the purchase of the Union Bank Plaza office tower in Downtown Los Angeles.
Nussbaum was an intermediary for an unknown investor and All Year Holdings’ Yoel Goldman for two promissory notes in 2018, totaling $2 million, according to court records.
He was the registered agent for Shaya Prager’s company Opal Holdings. Nussbaum also lent money to Prager on a four-story townhome at 311 East 51st Street in Midtown East, which was ultimately flipped to Prager’s deal partner Katherine Cartagena in a few months.
Non-fungible
Nussbaum also had an escrow business — like other lawyers, he’d hold money for clients while deals were pending.
But the money coming through Nussbaum’s escrow business seemed to become just another source of capital, sources and lawsuits indicate, as the lawyer used his firm’s escrow accounts as a passthrough for bridge loans.
Sometimes, Nussbaum would use a tactic known as “show funds,” where money would be deposited into a Nussbaum client’s account for a short-time, sometimes a day, to show sellers and lenders that the buyer had purchasing power, a move the Promote first reported.
Nussbaum would receive a point or two on the deal. The person, or lender, sending money into Nussbaum’s escrow would also get a fee.
Escrow funds have to be used for the stated purpose of the escrow agreement, not as investment vehicles generating returns for investors.
“Attorneys are one the very few fiduciaries in New York state that are allowed to hold money in trust,” real estate attorney Leo Jacobs explained, speaking generally and not about Nussbaum. “There are specific ethical requirements in espousing that duty or executing that duty. It’s such a high bar that the appearance of impropriety is problematic.”
At least some Nussbaum clients appeared to be aware that their money was being used as a loan or an investment in exchange for a return on the backend, judging by a handful of documents that have surfaced in relation to the missing $15 million.
Sod, the nursing home executive, said in his January suit that he had put the amount into an escrow account with Nussbaum. Sod claimed the money was supposed to be used to “show capital” to evidence purchasing power.
Kobre, Nussbaum’s lawyer, called this story “fiction” in a response to Sod’s lawsuit.
Where was the cash? Kobre said Sod’s money was an investment in a company called Georgetown Residents. TRD traced this company to a rental property in Indiana.
There’s a third possibility for where the money went: to a Borough Park-based dealmaker, Wolf Wercberger.
That idea comes from Crestview 360 Holdings, a firm connected to Sod. Crestview sued Wercberger on Feb. 4 claiming the $15 million in question went to Wercberger as “hush money,” to stop him from squealing on Nussbaum to authorities. The lawsuit alleges Nussbaum concocted a fake deal to make the transfer to Wercberger look legitimate.
Nussbaum’s attorney said the allegations were not true and that there was no hush money.
But Sod wasn’t alone. Other people were also missing money, they alleged.
Cashable, a firm tied to Brooklyn-based hard money lender Lazer Preizler, had put $1.25 million in Nussbaum’s trust account with Customers Bank, a Jan. 20 lawsuit filed by the company alleges.
Cashable requested the money on Jan. 9, but Nussbaum Lowinger did not comply with the request. Lowinger emailed Preizler that “he contacted the bank where the escrow account in question is maintained and that account is now frozen with no disbursements possible.” The Nussbaum shutdown came less than a week later, with clients like Cashable told that if they had funds in Nussbaum Lowinger’s escrow account to “please feel free to contact [Ethan] Kobre to discuss the return of those funds.”
Cashable’s lawsuit remains pending.
Yehuda Lasry, a lender in the community, is also allegedly looking for cash that went through Nussbaum’s escrow account.
Lasry alleged in a February lawsuit that he was approached by a Nussbaum client who needed to borrow money for a short period. This client was a “big player in the real estate industry” whom Lasry had known for many years, according to the complaint.
The client requested that the money — somewhere between $5 million and $13 million — go through Nussbaum’s escrow account, on the condition that Lasry had the right to claw it back at any time.
On Jan. 10, days before Nussbaum’s firm shuttered, Lasry requested the money, but Nussbaum failed to return at least $5 million of the money, the complaint alleges. The suit remains pending. Nussbaum has not filed a response.
Web of connections
Most plants grow vertically from a seed; roots down, shoots up. Others are rhizomatic systems that branch out in so many directions it’s not clear where they were planted.
The events of early January — Sod’s lawsuit, Nussbaum’s firm closure and Steiner’s death — seemed to send off their own branches while also casting some sunlight on what had already developed below the surface.
One example: As Preizler, Sod and Lasry were requesting money back from Nussbaum and Nussbaum was allegedly scrambling to make payments to clients, TRD sources kept bringing up Nussbaum’s name. They wondered why Nussbaum and his firm had been left unscathed by the Department of Justice and Federal Housing and Finance Agency sprawling investigation into suspect transactions easily connected to him. Was he cooperating?
Others speculated that Nussbaum’s clients were concerned about filing lawsuits because legal action could lead to questions from the Internal Revenue Service, apparently worried they’d be exposed in the course of legal proceedings against Nussbaum. That could mean even more people lost money to the Nussbaum escrow-meets-bridge loan business.
The Sod suit also strengthened the connection between Nussbaum and Steiner, through the Indiana rental property where Nussbaum said Sod’s money had gone. Steiner was already facing losses and foreclosures on some of his properties, including two apartment complexes totaling 800 units in Baltimore, which he personally guaranteed. It is unclear how much of Nussbaum’s clients’ money went to Steiner’s real estate deals.
The last major New York real estate attorney who found himself facing allegations of diversion of escrow funds was Mitchell Kossoff. The 68-year old Kossoff, who was accused of stealing $15 million from his clients, received a prison sentence of up to 13.5 years in 2022. (To be sure, there have been no criminal allegations brought against Nussbaum.)
Sources say that Nussbaum is working to resolve these disputes outside of court and that he is attempting to return his clients’ money, though lawsuits keep coming.
“The parties are generally trying to work cooperatively to find a solution beneficial to all,” Kobre said.