Treasury Steps Up Crackdown on U.S. Firms Linked to Sanctioned Russian Oligarchs

Key Takeaways

• Two major OFAC Penalties: Treasury imposed more than $18 million in sanctions fines this week over prohibited dealings involving designated Russian oligarchs.
• IPI Partners Case: The private equity firm continued to process capital calls, distributions, and management fees tied to Suleiman Kerimov for four years after his April 2018 designation, resulting in 51 apparent violations and an $11.49 million settlement.
• Gracetown Violations Deemed Egregious: The New York property manager received 24 monthly payments linked to Oleg Deripaska and waited over 45 months to report blocked property, triggering a $7.14 million civil penalty.
• Compliance Lessons Emphasized: OFAC warned that firms must look beyond surface ownership, quickly block and report designated interests, and ensure counsel receives all material risk information.
• Sanctions Diligence Expected Across Capital Markets: Private equity firms, real estate managers, and other U.S. market participants are urged to strengthen controls around obscured beneficial ownership and proxy structures.

Deep Dive

The U.S. Treasury is intensifying its effort to choke off any remaining financial lifelines available to sanctioned Russian elites, and American firms are increasingly in the crosshairs. This week, the Department’s Office of Foreign Assets Control (OFAC) unveiled two separate enforcement actions totaling more than $18 million, signaling that even indirect or obscured connections to Kremlin-aligned wealth will draw scrutiny.

The actions target IPI Partners, a Chicago private equity firm backed by billions in global capital commitments, and Gracetown, a Manhattan-based property manager overseeing high-end real estate tied to oligarch Oleg Deripaska. In both cases, Treasury says the companies continued to facilitate financial benefits for designated Russian oligarchs, at times for years, despite sweeping sanctions imposed in April 2018 following Moscow’s aggression in Ukraine.

For OFAC, these cases are more than compliance foot faults. They’re the latest example of how the U.S. government expects private equity funds, asset managers, and operators of high-value assets to understand not just who they transact with on paper but who profits behind the scenes.

IPI Partners Settles Over Investments Linked to Suleiman Kerimov

OFAC said IPI Partners agreed to pay $11,485,352 to resolve civil liability stemming from 51 apparent violations of Ukraine-/Russia-related sanctions.

Before Kerimov was sanctioned in April 2018, IPI received $50 million in capital commitments to its data-center fund from a British Virgin Islands company ultimately funded by the oligarch. That money flowed through a Delaware trust created to hold his U.S. assets.

After Kerimov was added to the U.S. Specially Designated Nationals and Blocked Persons List, IPI sought legal guidance but failed to reveal that its senior personnel had met Kerimov in person and negotiated directly with representatives described as acting on his behalf Those details, OFAC noted, should have signaled clear sanctions risk. IPI continued making capital calls, distributing proceeds, and collecting management fees tied to Kerimov’s investment over four years, resulting in dozens of prohibited transfers through mid-2022.

Treasury found the conduct non-egregious, but pointed to shortcomings in diligence and failure to ensure counsel had all material information.

Gracetown Hit With Penalty for Willful Dealings With Oleg Deripaska

Two days later, OFAC issued a $7,139,305 penalty to Gracetown for what the agency characterized as knowing and egregious violations.

Gracetown was formed to manage Deripaska-linked real estate in New York and Washington, D.C. Although Deripaska’s ownership was shifted to an associate shortly before his 2018 designation, OFAC warned the company at the time that:

• Deripaska’s property interests were blocked
• Any further dealings would violate U.S. sanctions
• Such property must be reported within 10 business days

Instead, the company continued receiving 24 monthly payments to benefit a Deripaska-owned entity through May 2020(totaling $31,250) and waited more than 45 months before reporting blocked debt associated with the arrangement.

OFAC concluded the firm had willfully ignored explicit instructions and downplayed compliance obligations despite close, ongoing ties to a sanctioned individual.

Disguise Won’t Work

The paired enforcement actions signal a clear warning to U.S. capital markets, especially private equity and high-value asset managers, that complex corporate structures do not shield sanctioned interests.

OFAC emphasized that:

• Sanctions apply to economic reality, not just paperwork
• Concealment through trusts, proxies, or affiliates will not be overlooked
• Timely reporting of blocked property is mandatory

The agency also said that relying on outside counsel is not a defense if internal teams fail to share critical information.

As sanctions on Russia continue to evolve, OFAC has repeatedly signaled it expects firms to look deeper, to who ultimately benefits, before accepting capital or continuing business relationships.

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