Mark Nussbaum, once a top attorney for Lakewood and Brooklyn machers, was arraigned Wednesday in Manhattan.
The Manhattan District Attorney’s office alleged Nussbaum stole over $15 million that was supposed to be held in escrow accounts from two victims between September 2024 and March 2025. Nussbaum was arrested on Wednesday morning.
Nussbaum arrived at New York Criminal Court handcuffed and dressed in a black hat with a Nike logo on the side, a black long-sleeved shirt and jeans. Nussbaum seemed at ease in the courtroom prior to his hearing. He and criminal defense attorney Zach Intrater of Agnifilo Intrater smiled at times.
Prosecutors charged Nussbaum with first-degree grand larceny. The D.A.’s office alleges Nussbaum diverted $15 million from one victim and $500,000 from another.
The D.A.’s office said there is reason to believe there are additional victims; the investigation is ongoing.
Nussbaum pleaded not guilty.
The judge set his bail at $500,000 cash, $500,000 insurance bond and $2 million partially secured bond. Nussbaum used Ira Judelson’s bail bond firm to post bail.
He is required to hand over his passports in 24 hours to the D.A.’s office. He will also have electronic monitoring.
Nussbaum was founding partner of Manhattan-based Nussbaum Lowinger. He became known as a go-to transactional real estate attorney but was also a dealmaker in his own right. Nussbaum used his escrow accounts as a passthrough for bridge loans to dealmakers in the Orthodox community, according to sources and lawsuits. His client list included Joel Schreiber, Moshe Silber and Shaya Prager.
Nussbaum allegedly used a tactic known as “show funds,” where money would be deposited into a Nussbaum client’s account for a short time, sometimes only a day, to show sellers and lenders that the buyer had purchasing power, a move the Promote first reported.
But Nussbaum’s firm started facing challenges earlier this year. A lawsuit from nursing home executive Jacob Sod alleged Nussbaum refused to hand over $15 million in escrow funds on Jan. 8.
A week later, Nussbaum shut down his firm, Nussbaum Lowinger. He hired Ethan Kobre of Schwartz Sladkus Reich Greenberg Atlas after the dissolution to handle all civil legal matters and directed anyone with escrow questions to reach out to Kobre.
Nussbaum started facing additional lawsuits from other clients, including hard money lenders, alleging funds supposed to be held in escrow had been diverted. Insiders and sources in the community wondered why Nussbaum had not been charged, given his ties to already-indicted players in the federal mortgage fraud scandal, including Moshe Silber.
At the time, there was no sign of a criminal investigation, but by March, Nussbaum had hired Intrater, a criminal defense attorney.
Questions also began mounting about Nussbaum’s business relationship with the late Borough Park-based real estate investor Mendel Steiner. Steiner faced distress across his portfolio and a growing number of lawsuits from lenders; he committed suicide in a hotel room a day after Sod filed his lawsuit against Nussbaum.
Nussbaum had also purchased multifamily properties in Chicago, according to an analysis by The Real Deal. Nussbaum and his affiliated entities amassed a portfolio of at least 126 units of apartments on Chicago’s historically blighted South Side.
The last major New York real estate attorney 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.
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