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Washington, D.C. (December 2, 2025)- The Office of Foreign Assets Control of the United States Treasury Department ("OFAC") announced on November 24, 2025 the imposition of a $4,677,552 financial penalty on a U.S. person (the "U.S. Person") for violating U.S. sanctions against Russia. This action shows that notwithstanding energetic U.S. diplomatic efforts to end the armed conflict in Ukraine, enforcement of sanctions against the Russian Federation remains robust and could have serious financial repercussions for violators. Even individuals and businesses not focused on cross-border transactions on a day-to-day basis need to be alert to the risk of violating sanctions imposed on foreign countries and nationals.
This enforcement action arose from the ownership of a residential property in Atlanta, Georgia by a family member of a Russian oligarch. In March 2022, in response to foreign policy events, the Biden administration designated the family member as a "blocked person" under U.S. sanctions laws. As a result of this designation at the federal level, all transactions involving the Atlanta property are blocked. The U.S. Person, through a real estate investment company called King Holdings LLC, purchased the property at a foreclosure auction. OFAC thereafter contacted the U.S. Person and informed him that the property could not be dealt with without a special license granted by OFAC. OFAC then issued a formal cease-and-desist order related to the property. The U.S. Person and King Holdings ignored the instructions from OFAC and proceeded to finance renovations on the property through a mortgage and then sold the renovated property to a third-party buyer for a profit of about $500,000. Each of these two transactions constituted a separate violation of the federal sanctions law.
OFAC determined that the violations by the U.S. Person were "egregious" because he had been put on notice that the subject property was subject to federal sanctions and he provided misleading information to OFAC during the subsequent investigation. Accordingly, OFAC imposed the statutory maximum financial penalty of $4,677,552, which is close to ten times the profit that the U.S. Person made from "flipping" this house.
OFAC's action in this case underscores that U.S. sanctions against various countries on foreign policy grounds have real teeth. The U.S. government does not hesitate to pursue U.S. individuals and businesses for violating sanctions, even when the transactions at issue are relatively modest in size and even when the players may not truly appreciate the foreign angles of the business transactions. Given the complexity and nuances of the current foreign sanctions in place, it behooves individuals and businesses to seek competent legal advice when engaging in transactions that have even a remote nexus to a "sensitive" foreign country.
Lewis Brisbois's attorneys are actively engaged in the wide range of legal issues in this area and are advising clients on managing legal and business risk as events continue to develop at an accelerated pace. For more information, contact the author or editors of this alert. Visit our Ukraine Conflict, International Trade, Export, Import and Investment Controls & National Security Practice page for additional alerts in this area.
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