A lawsuit alleging a years-long fraud involving real estate transactions, misused escrow funds, and hidden kickbacks has drawn attention to Mark Nussbaum and Riverside, a title company based in Lakewood, New Jersey. Blueberry Funding and EADMK, two lenders, filed claims in New York’s Southern District seeking to recover $87.5 million from Nussbaum, his law firm Nussbaum Lowinger, and Riverside’s owners. The allegations center on a scheme that allegedly used client escrow accounts and 1031-exchange funds to inflate property values, secure oversized loans, and siphon profits. The lawsuit, first reported by the outlet, details how the fraud operated as early as 2018.
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According to the legal filings, the process began with a buyer acquiring a property under contract and quickly assigning it to a related party at an inflated price. This second sale was described as entirely fraudulent, though Riverside, acting as the title and closing agent, made the deals appear legitimate. No actual money changed hands in these transactions, sources familiar with the scheme said. Buyers then used the inflated sale prices to secure larger loans than would have been possible otherwise. The difference between the inflated loan and the actual sales price was allegedly pocketed by those involved.
Allegations also point to the misuse of the 1031 exchange program, which allows companies to defer capital gains taxes by reinvesting profits into like-kind properties. Nussbaum and Riverside allegedly directed 1031 exchange clients to Riverside, which lent out the money at 2 percent interest per month. Nussbaum received 1 percent per month as a kickback.
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Charitable donations were allegedly used to conceal fees from the flips and 1031 fraud. Nussbaum and Greenwald reportedly directed payments to organizations like Pomona Jewish Community, Ohr Shlomo Chasidic Center, and Rofeh Cholim Cancer Society. In one instance, Greenwald asked Riverside to send $5,000 to RCCS “in honor of Mendy & Chanie Fischer and family for Mark Nussbaum RCCS Hockey.” A Riverside employee later noted the need to hide the donor’s name to avoid appearing as a kickback.
The scheme began to unravel in early 2025 when Blueberry and other Nussbaum Lowinger clients requested their escrow money back. Nussbaum’s business partner, Mendel Steiner, died by suicide, and Nussbaum Lowinger shut down. Escrow clients now seek over $400 million from the firm. The Manhattan District Attorney’s office charged Nussbaum with diverting more than $15 million in escrow funds, though he pleaded not guilty.
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Riverside was blacklisted from Fannie Mae in 2024 for its role in a fraudulent flip involving Brooklyn dealmakers. The company, which started in title insurance, expanded into 1031 exchanges and LLC formation. Its unofficial motto, “Do whatever it takes,” may have contributed to its downfall. The firm’s actions have exposed broader issues in small-time commercial lending, where oversight appears to be lacking.