OFAC fines investor $4.7 million over dealings in blocked Russian property

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) assessed a $4,677,552 civil monetary penalty against an individual identified as “U.S. Person-1” for violations of OFAC’s Russia sanctions and for failing to comply with an OFAC subpoena.

OFAC said the conduct involved willful dealings in residential real property in the Atlanta area owned by a person blocked under OFAC’s Russia sanctions. The agency said that between April 2023 and March 2024, U.S. Person-1—acting through and on behalf of Atlanta, Georgia-based real estate investment company King Holdings LLC—mortgaged, renovated and sold the property to an “unwitting third party.” OFAC said the sale was concealed from the agency and also violated the terms of an OFAC cease-and-desist order.

OFAC said it designated a family member of a Russian oligarch in March 2022 pursuant to Executive Order 14024. OFAC said the designated person owned the Atlanta-area residential property directly and in their own name, and that all dealings in the property became prohibited, including its transfer, sale or foreclosure.

According to OFAC, Fulton County, Georgia, recorded a document in October 2022 detailing the restrictions on dealings with the property, at OFAC’s request. The property later went into foreclosure, and OFAC said King Holdings purchased it at public auction in January 2023; OFAC said the property nevertheless remained blocked under its regulations.

OFAC said it contacted U.S. Person-1 in April 2023 to explain the property remained blocked and could not be dealt in without OFAC authorization, and that U.S. Person-1 could apply for an OFAC license. OFAC said neither U.S. Person-1 nor King Holdings applied for a license.

In the enforcement release, OFAC said it determined the violations were egregious and not voluntarily self-disclosed, resulting in a penalty at the statutory maximum of $4,677,552.