BULL VALLEY – How did two unemployed people get a mortgage to buy an $800,000 home late last year?
Authorities claim a local man used drug money to buy the 17,000-square-foot mansion in Bull Valley. The financing company said it was duped into giving a $450,000 mortgage to a land trust controlled by the same man. Statements from federal agents suggest there might be more to the story. A Drug Enforcement Administration agent reported the company's leader "gave an unsolicited example of how to hide drug money" during a routine phone call. The DEA agent further claimed in court records to have found evidence that the accused drug dealer was an investor in the real estate financing company.
McHenry County prosecutors are working to seize the Bull Valley home and other big-ticket items they say David A. Soskin, 43, and his 26-year-old fiancee, Jamie Lee, bought with money they made smuggling hundreds of pounds of marijuana from California to Illinois. Both face a minimum of 12 years in prison if convicted of drug trafficking.
The company that loaned Soskin and Lee the money is seeking to foreclose on the home.
Three days after police said they found about 350 pounds of marijuana in a locked closet in the master bedroom of the home at 1001 N. Cherry Valley Road, a federal Drug Enforcement Administration agent called the couple's lender, Skokie-based Medford Capital LLC, to find out what documents were needed to freeze a client's account. When the agent asked to speak with the company's compliance department, one of the company's owners, Stuart Urkov, told the agent the company didn't have a compliance department, according to a sworn statement written by the agent.
"Urkov stated there was no compliance department and he was in the car with the other partners of Medford Capital in Florida," the agent wrote. Urkov then gave the agent the name and number of his lawyer.
Later, Urkov called the agent back to ask which client the DEA was after. During that call, Urkov "gave an unsolicited example of how to hide drug money utilizing various mortgage and loan methods," the agent wrote.
Urkov denied this and several other parts of the agent's statement in a phone interview with the Northwest Herald. Urkov has not been charged with a crime. Both he and his attorney said they were cooperating with investigators.
Urkov said that he didn't think the initial phone call he received that day was from a DEA agent. He said he didn't realize he had actually been talking with an agent until after he spoke with his attorney, David Kaufman, a partner with Thompson Coburn LLP in Chicago.
Medford Capital does have a compliance department, Urkov said. On advice of his attorney, Urkov declined to go into detail about what due diligence the firm did before lending money to the trust controlled by Soskin and Lee.
Prosecutors have said that Soskin and Lee were unemployed when they bought the $800,000 house in December.
Medford Capital loans money to people for non-owner occupied residential and commercial real estate deals, Kaufman said.
"Medford caters to a growing niche of investors, developers, rehabbers, corporations, probate estates, and sub-prime money borrowers who seek specialty financing for real estate property, but due to various circumstances, do not meet the stringent requirements of conventional real estate underwriting guidelines or need access to financing faster than a conventional lending institution can provide," according to its website.
Before lending money to a client, the company affirms the loan is commercial use, Urkov and Kaufman said. The process is different than a conventional home buyer going to a bank for a loan. However, both said that court records eventually would show that the beneficiaries of the trust used to buy the Bull Valley home lied in paperwork required as part of the deal.
"It will show this individual signed a bunch of a pieces of paper and may not have been truthful," Kaufman said. "This individual apparently lied to them."
The DEA report said documents found in the Bull Valley home showed Soskin had $133,000 invested in Medford Capital Holds. Both Kaufman and Stuart said Soskin had not invested in the company and wasn't in business with Urkov and his partners.
Assistant State's Attorney John Gibbons declined to comment on the pending case citing office policy.
At a hearing earlier this month, McHenry County Judge Michael Feetterer found probable cause to seize belongings from Soskin and Lee that prosecutors claim were bought with drug money.
Medford Real Estate Fund I LLC filed for foreclosure on the home and property at 1001 N. Cherry Valley Road on June 26, Kaufman said.
"We're taking action to foreclose on the property," he said. Kaufman said he believes the trust is in default on the property and the company filed the foreclosure action to secure and protect its investment.
The asset forfeiture cases are next due in court July 31 for a status hearing.