BULL VALLEY – McHenry County prosecutors claim he’s an unemployed gambler who used profits from a multistate drug trafficking ring to buy an $800,000 home in Bull Valley.
But a Wilmette lender said it saw nothing more than a good deal when it gave 43-year-old David A. Soskin a $450,000 loan to buy and flip the 35-acre property in December.
The lender, Medford Real Estate Fund I, is fighting county prosecutors’ attempts to seize property, vehicles and other items it claims were bought with drug proceeds under civil forfeiture provisions.
Medford Real Estate Fund I LLC is owned by Medford Capital LLC, a real estate company run by Stuart Urkov, Luke Wojtaski and Michael Kaufman. The fund lends money to people who flip properties in northeastern Illinois and southeast Wisconsin, attorneys wrote in response to the seizure of the Bull Valley home. Medford Real Estate Fund is represented by Thompson Coburn LLP lawyers Todd Rowden, David Kaufman and Christina Berish.
Prosecutors are working to seize the 17,000-square-foot home at 1001 N. Cherry Valley Road, along with cars, an expensive trailer, machine guns, 18 TVs, cash and a fire truck. They contend all of it was bought with proceeds from a marijuana trafficking operation.
Soskin has been held at the McHenry County Jail since May in lieu of $1 million bond as he faces charges of marijuana trafficking and possession of marijuana after police found more than 350 pounds of weed locked in the closet of the master bedroom.
In court documents, Medford claimed that it should be allowed to recoup its investment and called the seizure efforts a “money grab.”
McHenry County State’s Attorney Patrick Kenneally declined to comment on the civil forfeiture case because it is pending, along with Soskin’s felony drug charges.
The company filed court documents this month detailing for the first time how it decided Soskin, a convicted felon, was a good credit risk.
Soskin applied to borrow $450,000 from Medford through a trust, stating that he planned to remodel the home and subdivide the property, Medford’s attorney’s wrote in court documents.
“Soskin advised Medford that he had experience in the real estate market, certifying that he already owned six other properties including three office buildings, from which he generated net income of over $280,000 per year,” according to court documents
In a personal financial statement, Soskin listed real estate holdings, more than $100,000 in bank deposits and that he had borrowed money from Ford Motor Credit and Harley-Davidson, court records show.
Medford employees got credit scores on Soskin from the three rating agencies (the highest was 771 from Equifax). The company confirmed information from Soskin’s personal financial statement, such as the loans from Ford and Harley-Davidson. The lender also “examined Soskin’s tax returns and bank statements,” the company’s attorneys wrote.
After an appraisal showed that the property had a market value of $900,000, Medford officials thought they had a solid deal that was “over-secured with the loan-to-value ratio at 200 percent,” according to court documents.
Further, Soskin said he planned to do about $100,000 worth of work to the home and property. That included updating the kitchen with new appliances, refinishing cabinets and new flooring; updating bathrooms where needed with refinished cabinets and new tiling; and putting in new hardwood flooring throughout. He planned to reconfigure the master suite with sliders to a balcony that would include a hot tub and reconfigure the master bathroom, among other spot repairs, according to Medford’s response.
Medford’s lawyers further argue that Illinois’ forfeiture statute is unconstitutional, that prosecutors are trying to seize property that is many times more valuable than the $200,000 maximum fine Soskin could face if he is convicted of marijuana trafficking, and that the company had no knowledge of any illegal activity. Medford’s appraisal put the market value of the property after the remodeling work at about $1 million. Prosecutors have said an appraisal put the value of the home and property at $1.6 million, according to court records.
“Medford’s $450,000 loan to Soskin remains outstanding and is a substantial part of Medford’s business,” Rowden wrote. “If the allegations of the state’s forfeiture complaint are true, Medford’s loan to Soskin was made based on Soskin’s fraudulent statements, yet, to date, the state has not offered to help Medford in recovering the monies loaned to Soskin.”
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.
Soskin’s attorney, Nicholas Giordano, could not be reached for comment Tuesday.
The forfeiture case is next up in court Jan. 5, according to online court documents.