Manhattan Lawsuit Accuses Riverside, Nussbaum Of $87 Million Escrow Hustle
A Manhattan federal lawsuit alleges a $87.5 million scheme involving Riverside Abstract and Nussbaum Lowinger that allegedly used escrow funds to inflate property values and secure loans.Summary
A federal complaint filed in Manhattan alleges a multi-year real estate scheme orchestrated by title firm Riverside Abstract and the law office of Nussbaum Lowinger. The suit, brought by lenders Blueberry Funding and EADMK, claims the defendants allegedly diverted approximately $87.5 million from escrow accounts and 1031 exchange funds to inflate property values and secure oversized loans. The alleged playbook involved quickly assigning contracts at higher prices to create paper value, redeploying escrowed money as bridge loans, and using charitable checks to disguise kickbacks. One specific deal, the Park at Crestview in Austin, allegedly went from a $40 million contract to a $54 million assignment, generating nearly $2 million in additional financing. The civil suit arrives alongside a Chapter 11 bankruptcy filing by Nussbaum Lowinger and a separate criminal case against Mark Nussbaum, who has pleaded not guilty to diverting escrow funds. The case highlights the risks associated with complex real estate transactions and the reliance on title and settlement agents to safeguard large sums.
(Source：Hoodline)