Gracetown Inc., a property management company based in New York, has been fined $7,139,305 by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) for violating Russia-related sanctions and failing to report blocked assets. The penalty is close to the statutory maximum and underscores the consequences of not following OFAC guidance.
“Treasury will act firmly against those who ignore our sanctions and aid our adversaries,” said Treasury Under Secretary for Terrorism and Financial Intelligence John K. Hurley. “Under Secretary Bessent’s leadership, we will continue to investigate and hold accountable those who enable sanctioned actors.”
According to OFAC’s investigation, Gracetown received 24 payments totaling $31,250 between April 2018 and May 2020 on behalf of a company owned by Russian oligarch Oleg Deripaska. This occurred despite explicit notice from OFAC that any dealings with Deripaska were prohibited due to his designation under U.S. sanctions.
Gracetown was established in 2006 to manage luxury real estate properties in New York and Washington, D.C., which were acquired by Deripaska through various entities. From its founding until 2018, Deripaska was identified as Gracetown’s ultimate beneficial owner.
In April 2018, when OFAC sanctioned Deripaska, all his assets under U.S. jurisdiction were blocked, restricting U.S. persons from engaging in transactions related to him or his interests. Following this action, OFAC notified Gracetown about these restrictions and its compliance obligations.
Despite this notification, Gracetown continued arrangements with an entity owned by Deripaska to receive monthly payments within the United States on that entity’s behalf. These actions violated U.S. sanctions against Russia by dealing in property linked to Deripaska and failing to report possession of such property as required by law.
Further details can be found in the Enforcement Release on the U.S. Department of the Treasury website.
