Crime & Courts

Fight persists over $800,000 Bull Valley mansion owned by couple accused of drug trafficking

BULL VALLEY – Prosecutors are fighting a lender for control of an $800,000 Bull Valley mansion that they said a local couple used as the headquarters for a multistate drug trafficking ring.

The McHenry County State’s Attorney’s Office moved to seize the mansion they said was bought by David A. Soskin with drug money after authorities found about 350 pounds of marijuana and a machine gun inside the 17,000-square-foot home set on more than 30 acres in one of McHenry County’s most affluent towns.

Soskin, 43, and his fiancée, Jamie M. Lee, 26, face charges of marijuana trafficking. Both face a minimum of 12 years in prison if convicted. They have pleaded not guilty.

Medford Capital LLC’s Medford Real Estate Fund I, the company that loaned Soskin the money, is seeking to foreclose on the home. McHenry County prosecutors are fighting the foreclosure effort.

An attorney representing Medford Capital said the company is trying to protect its rights and get its money back after being duped by Soskin.

“We have a valid lien on the property, and we’re going to do what’s necessary to protect that,” said David Kaufman, a partner with Thompson Coburn LLP in Chicago.

Kaufman said his client believes the property is worth more than $1 million. The lender’s goal is to get the property sold as quickly as possible so it can recoup its investment. He said prosecutors would “prefer to take the lead and have no one else involved.”

Kaufman said the private sector would be able to sell the property more quickly than the government, allowing the lender to get its money back and allowing the McHenry County State’s Attorney’s Office to take whatever is left after liens on the property are paid. Prosecutors couldn’t be reached for comment Friday.

Soskin bought the home at 1001 N. Cherry Valley Road in December through a trust while unemployed. Soskin put down $400,000 and then took out a $450,000 mortgage with Medford Capital LLC, according to court records. The home and property had been appraised for more than $1.6 million, according to court documents.

Medford Capital loans money to people for nonowner occupied residential and commercial real estate deals. Medford “caters to a growing niche of investors, developers, rehabbers, corporations, probate estates and subprime 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.

When Soskin took out the mortgage, the company said he agreed that the loan would be used for business purposes only, according to court documents. He also agreed that the property related to the loan was a commercial investment property and not his primary residence.

Medford said that Soskin’s actions led to mortgage foreclosure, breach of note and common law fraud, according to court documents. The company is asking for more than $486,000 in damages based on the loan itself and default interest.

“Soskin purposely concealed material facts from [Medford] in that he falsely stated that the subject property would be used as commercial investment property and not as Soskin’s primary residence,” the company said in court documents. “Soskin knew at the time that they executed the affidavit that it contained material [and] false representations, and Soskin knew that he was concealing a material fact from [Medford].”

A Drug Enforcement Administration report said documents found in the Bull Valley home showed that Soskin had $133,000 invested in Medford Capital Holds. Both Kaufman and Stuart Urkov, one of the company’s owners, have said Soskin had not invested in the company and wasn’t in business with Urkov and his partners.

Tom Cahill, a prosecutor with the McHenry County State’s Attorney’s Office, filed a motion in July to dismiss Medford Capital’s mortgage foreclosure proceeding, saying the company does not have “legal capacity” because it is not the holder of the mortgage. Cahill said in his motion that TBK Bank SSB has control over the paperwork and mortgage.

If prosecutors are able to take control of the Bull Valley home, the property would be sold at auction. The proceed would be divided among the arresting agencies, including the McHenry County Sheriff’s Office.

In response, Medford said that TBK Bank is its lender, that TBK Bank released the mortgage in July, and that the bank no longer has any interest in the matter, according to court documents.

Soskin’s arrest led to scrutiny of his dealings with Medford. A DEA agent reported that Urkov “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.

Urkov denied this and several other parts of the agent’s statement in a phone interview with the Northwest Herald in June. Urkov has not been charged with a crime. Both he and his attorney said they were cooperating with investigators.

All parties involved in the mortgage foreclosure will appear in court Aug. 28.

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