OFAC Imposes Large Russia Penalties as 2025 Comes to a Close

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Dec. 9, 2025
By: Marvin E. McPherson

The Office of Foreign Assets Control (OFAC) is closing out the year with two significant enforcement actions involving U.S. firms that continued business with entities linked to sanctioned Russian entities.

The two cases underscore OFAC’s continued focus on beneficial ownership, indirect dealings, and “reason to know” standards.

Gracetown, Inc., a New York–based property manager created to oversee three luxury U.S. properties ultimately owned by Russian aluminum magnate Oleg Deripaska received a $7.14 million civil penalty. According to OFAC’s settlement documents, Gracetown continued to receive and use monthly payments from Baufinanz, a British Virgin Islands entity tied to Deripaska, even after OFAC directly notified the company of Deripaska’s designation and instructed it to block and report all associated property.

Despite this explicit notice, delivered in April 2018, Gracetown allegedly carried on with the payment arrangement until May 2020 and failed to report its holdings for more than 45 months. OFAC deemed the conduct “egregious,” citing: “Willful, post-notification dealings that advanced the financial interests of a blocked person.”

Mitigating factors were minimal. OFAC credited the company only for signing a tolling agreement and having no recent sanctions-related history.

The second enforcement case against IPI Partners, LLC, OFAC settled for $11.49 million. IPI is a U.S. private equity firm managing data-center investments. The agency accused IPI of conducting 51 prohibited transactions with entities linked to Suleiman Kerimov, the billionaire Russian politician and investor designated by OFAC in April 2018.

The case centers on a $50 million fund commitment made through Definition Services, a British Virgin Islands company owned by a Delaware trust established for Kerimov’s benefit. OFAC said IPI employees, including a senior investment executive, knew or had reason to know that the true source of the funds was Kerimov, noting that personnel met with Kerimov and his representatives multiple times before and after his designation.

After Kerimov was sanctioned, IPI consulted outside counsel, which based on incomplete information provided by IPI concluded that blocking was not required under OFAC’s 50 Percent Rule. OFAC faulted IPI for failing to disclose internal knowledge that Definition’s intermediaries were widely understood within the firm to be acting on Kerimov’s behalf.

OFAC classified the case as “non-egregious”, but highlighted serious aggravating factors:

1.      Actual or constructive knowledge that Kerimov was the beneficial investor.

2.      The facilitation of a blocked person’s access to the U.S. financial system.

3.      The firm’s high level of sophistication.

IPI received some mitigation credit for eventually waiving privilege, producing additional records, and lacking prior OFAC violations, although OFAC said early cooperation fell short.

OFAC emphasized that sophisticated entities are expected to conduct deeper due diligence on there transactions. Furthermore, smaller to mid-size companies will not be overlooked due to their organizational size. If you have any questions regarding a transaction or a sanctions nexus please contact any attorney at Barnes Richardson and Colburn.