Lakewood-based Blueberry Funding has filed a lawsuit in Kings County to hold Lowinger responsible for $58.7 million in missing escrow funds. The lawsuit focuses on the other half of the now-defunct Nussbaum Lowinger, a Manhattan-based law firm at the center of an escrow fraud scandal in which former clients claim they are owed more than $400 million.
So far, much of the legal wrath has been directed at Mark Nussbaum, the firm’s better-known majority partner. But Blueberry places the blame on Lowinger, claiming he breached his fiduciary duty to ensure the money was kept in the designated escrow account. Blueberry further alleges that Lowinger knew or should have known that distributions were being made from the escrow account and that 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 lawsuit were dropped.)
The Mystery of Sam Lowinger
Nussbaum was known as the high-rolling point person for the company’s escrow operations. His personal assets include $2 million in cryptocurrency and $91,000 in wine and alcohol, according to recent court documents. He had sold more than $200,000 worth of watches and jewelry.
Lowinger appears to be keeping a lower profile. His Instagram account is full of the thirty-year-old lawyer playing saxophone solos. About a month after Nussbaum Lowinger closed, Lowinger got a new job as an associate general counsel at a family office, according to his LinkedIn: The promotion reported.
He has remained largely silent since the company’s collapse, claiming that Nussbaum kept him in the dark about the company’s escrow operations and that he was the only one with viewing access, court documents show.
Lowinger’s attorney, Rick Supple, said his client had nothing to do with the escrow agreement Blueberry allegedly made with Nussbaum.
“As the plaintiff also knows, as soon as it became known to Mr. Lowinger that the company’s escrow account may have been tainted by improper conduct, he took immediate action to protect all stakeholders,” Supple said. “Mr. Lowinger looks forward to addressing and substantiating Blueberry’s false claims.”
Although Lowinger has tried to distance himself from the collapse of the company and its escrow business, he was deeply involved in the transactional side of the business, according to sources and documents reviewed by TRD. These new details shed light on Lowinger’s role in the controversial company, which was previously opaque.
Nussbaum Lowinger’s real estate clients had courted controversy, some of whom were targets of the Justice Department’s mortgage fraud investigation. Notably, Nussbaum Lowinger was listed as counsel for Moshe Silber’s Rhodium Capital. (Silber pleaded guilty last year to his role in a mortgage fraud case.)
A voice memo and an email reviewed by TRD between 2022 and 2023, it appears that Lowinger had extensive dealings with title insurer Riverside Abstract, which is currently blacklisted by Fannie Mae for acting as title underwriter in a fraudulent transaction in Troy, Michigan. One communication shows Lowinger expressing frustration with Riverside Abstract CEO Shaul Greenwald over undisclosed fees that appeared to delay closing a deal with Shaya Prager.
(Riverside Abstract has not been accused of any wrongdoing. There is no indication that Lowinger’s communications relate to the Troy deal.)
In a March 2022 email, Lowinger wrote to Greenwald expressing frustration with the title insurer for allegedly charging customers last-minute fees for time-of-the-essence deals.
“This cannot continue. If you value our relationship and team approach (and you indicated this when you came to our office), then there needs to be more transparency. This consistently hinders TOE closings. In times of need, I feel like your employees spend more time settling your accounts than doing the title work we have entrusted to them.”
In a short voice recording from March 2023, Lowinger again expresses concern about not having visibility into Riverside’s reimbursements.
“I can’t let it happen on every deal. I just can’t do that,” he said.
Greenwald did not return a request for comment.
Mark Nussbaum has been charged with grand larceny by the Manhattan district attorney over allegations that he stole $15 million in escrow funds. Nussbaum has pleaded not guilty.
Blueberry, an alternative lender, is one of Nussbaum Lowinger’s largest creditors. Nussbaum has appointed a trustee to handle the claims and guide Nussbaum Lowinger through an alternative to bankruptcy known as an assignment for the benefit of creditors.
The trustee recently alleged that more than $300 million of Nussbaum Lowinger’s clients’ money went to the late Mendel Steiner, a 33-year-old real estate investor from Borough Park, according to a recent lawsuit. A lawsuit filed by the trustee handling the liquidation alleges Steiner diverted that money through bogus escrow accounts. Blueberry claims the money is in Nussbaum Lowinger’s escrow account. But the company failed to return the money after Steiner died in January.
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