Lawsuit Cast Riverside, Nussbaum Lowinger as Schemers

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A federal lawsuit is pulling back the curtain on what may be one of the most extensive alleged real estate fraud operations to emerge from New York’s investment sales world in years.

Lakewood-based Blueberry Funding and Florida lender EADMK sued Riverside Abstract, the defunct law firm Nussbaum Lowinger and a roster of executives tied to both companies, alleging they orchestrated a years-long scheme that relied on fraudulent property flips, misappropriated escrow funds and concealed kickbacks through charitable donations.

The complaint, filed in Manhattan federal court, seeks the recovery of $87.5 million that plaintiffs claim should have been safeguarded in Nussbaum Lowinger escrow accounts.

At the center of the allegations are attorney Mark Nussbaum and Riverside co-founder Shaul Greenwald, two figures long associated with rumors of mortgage fraud. The lawsuit paints Riverside and Nussbaum Lowinger not as peripheral service providers but as the infrastructure behind dozens of allegedly sham transactions stretching back to at least 2018.

The operation followed a repeatable formula, according to the complaint: a buyer would put a property under contract and then assign that contract to a related entity at a substantially higher price. Riverside allegedly handled title and closings, helping create the appearance of a legitimate second sale even when little or no money changed hands.

The inflated valuation then allowed borrowers to secure larger loans than the underlying property values justified, with participants pocketing the spread.

One example cited in the lawsuit involves the Park at Crestview apartment complex in Austin. The property allegedly went under contract for roughly $40 million before being reassigned at a $54 million valuation, enabling financing that exceeded the actual purchase price by nearly $2 million. The complaint also points to unusually large fees paid to Riverside, Nussbaum Lowinger and affiliated parties.

The lawsuit further alleges that 1031 exchange funds became a source of liquidity that kept the machine running. Plaintiffs claim client funds were quietly deployed as bridge financing for transactions, creating what the complaint characterizes as a cycle dependent on a constant flow of fresh deposits.

The most striking allegations involve charitable organizations. The complaint claims Riverside and Nussbaum routed portions of their profits through donations to multiple nonprofits, masking what lenders describe as kickback payments tied to fraudulent flips and 1031 exchange activity.

The case arrives as fallout from Nussbaum Lowinger’s collapse continues to spread. Escrow clients are collectively pursuing more than $400 million in missing funds, while Manhattan prosecutors have already charged Nussbaum with diverting escrow money. He has pleaded not guilty.

Neither Nussbaum, former partner Samuel Lowinger nor Riverside has been criminally charged with mortgage fraud.

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