OFAC Announces $4.7 Million Penalty on Real Estate Investor for Dealing in Blocked Property Linked to Russian Oligarch

On November 24, 2025, the US Office of Foreign Assets Control (“OFAC”) announced a $4,677,552 penalty against an individual (acting through a US real estate investment company) for willfully purchasing and renovating real estate owned by a person blocked under OFAC’s Russia sanctions (the “Sanctions Target”), and then selling that property to an unwitting buyer. The individual acquired the property through foreclosure proceedings despite public notice of the sanctioned individual’s interests, and proceeded with plans to renovate and resell the property despite actual knowledge that the property was blocked property under the sanctions laws. This is by far the largest penalty OFAC has issued against an individual in a public enforcement action. OFAC characterized the conduct as “egregious” and not voluntarily disclosed, underscoring the seriousness of the offense.

Background on US- Russian Sanctions

OFAC’s Russia-based sanctions, including those issued under Executive Order (“E.O.”) 14024, Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation, broadly prohibit US persons¹ from engaging in transactions or dealings in any property or interests in property of individuals designated on OFAC’s Specially Designated Nationals and Blocked Persons (“SDN”) List. When a person is designated, all property and interests in property of that person that are in the United States or in the possession or control of US persons are blocked. This includes real property owned directly in the name of the SDN, and any unauthorized transfer, sale, or foreclosure is prohibited.

The Real Estate Transaction and Corresponding Violations

In this case, on March 3, 2022, OFAC designated the Sanctions Target due to their affiliation with Russia’s President, Vladimir Putin, and pursuant to E.O. 14024. The Sanctions Target owned, in their own name, residential real property in Atlanta, Georgia. As described above, following the Sanctions Target’s designation, all dealings in property with the Sanctions Target became prohibited, including through their Atlanta-based property.

Following the designation, OFAC issued a notice to officials in Fulton County, Georgia (the county in which the property is situated) of the property’s blocked status and the restrictions on dealings involving the property. The notice was recorded in the Fulton County land records in October 2022 and available to the public thereafter. Notwithstanding OFAC’s public notice, the property of the Sanctions Target entered foreclosure and was purchased by a real estate firm at a public auction in January 2023. Following its purchase, OFAC directly notified the individual and the real estate company that the property remained blocked—OFAC’s regulations generally render null and void any unlicensed transfer of blocked property—and could not be dealt with without authorization from OFAC. Despite OFAC’s warning, the individual continued to renovate, mortgage, and sell the property without notifying or receiving approval from OFAC. The individual entered into an agreement to sell the property in December 2023 but did not inform the buyer, the closing law firm, or any other party involved in the sale of OFAC’s communications of the blocked status of the property.

On February 1, 2024, while the sale of the property was pending, OFAC issued a cease-and-desist order and subpoena to the real estate company regarding the property. The company  responded to the subpoena and certified in writing, through counsel, its compliance with the terms of the cease-and-desist order. Then, just eight days later, a real estate firm closed on the sale of the property for a value of $1.4 million.

OFAC’s Calculation of Penalties

As a result, OFAC imposed a $4,677,552 penalty on the individual, which was the statutory maximum penalty for the violations at issue and the largest penalty OFAC has issued against an individual to date in a public enforcement action.

In determining the penalty amount, OFAC considered that the violations were not voluntarily self-disclosed and constituted an egregious case, as well as several aggravating factors, including:

• The individual “acted willfully by dealing in the blocked property for nearly a year after receiving clear and actual notice from OFAC that all dealings in the property such as those engaged in were prohibited without authorization from OFAC.”
• The individual “willfully certified the accuracy and completeness of a subpoena response by the real estate company that was inaccurate and incomplete.”
• The year-long dealings constituted a “pattern of violative conduct.”
• The individual had knowledge “at all times” of the violations.
• The individual “exposed multiple third parties to potential economic harm and legal liability and significantly damaged the integrity of OFAC’s sanctions.”
• The individual “ failed to cooperate with OFAC’s investigation by certifying an inaccurate and incomplete subpoena response by the real estate company.”

Key Compliance Takeaways

OFAC’s action reflects intensified scrutiny of the real estate sector and the facilitation of sanctioned parties’ access to US markets. In its announcement, OFAC emphasized “the obligation of all US persons, including individual investors and others in the real estate sector, to comply with OFAC’s sanctions regulations and orders.”

US-Based Real Estate Concerns

This enforcement action underscores sanctions-related risks in the US real estate sector, particularly with respect to blocked persons. These risks highlight that sanctions compliance risks may be present not only on international, but also, domestic transactions.

Moreover, those involved in US real estate should take a close look at indirect interests in US real estate. While this case involved an SDN with a “direct, readily apparent interest,” OFAC made a point to note that ownership may be indirect, with the SDN’s name not apparent on relevant deeds or transactional documents. And “[r]egardless of the nature of such blocked property interests, all parties involved in real estate transactions—including financial institutions, brokers, agents, title insurers, law firms, registrars, and county authorities—should exercise appropriate caution and conduct risk-based due diligence to avoid dealing in blocked property.”

In the event that mortgage lenders, title companies, or other real estate market participants identify an OFAC notice among the title records of residential real property, they should proceed with extreme caution. The enforcement release does not detail the actions or knowledge of third parties involved in the mortgage and sale of the property following its foreclosure, but it is possible (if not likely) that one of those parties conducted a title search, reviewed OFAC’s notice among the land records, and had an opportunity to identify the sanctions issue for themselves. Accordingly, market participants may wish to require more than a customer or counterparty certification—e.g., a copy of an OFAC license—if faced with a similar circumstance in the future.    

Willful Violations of OFAC’s Regulations

Notably, despite OFAC’s acknowledgment that the individual acted “through and on behalf of the real estate company,” OFAC imposed its penalty on the individual, not the company. This demonstrates that OFAC will readily pierce the corporate veil to hold accountable individuals engaged in willful sanctions violations.

Compliance with OFAC Subpoenas

OFAC also underscored the need for US persons—regardless of size, sophistication, or expertise in sanctions-related matters—to timely and fully comply with administrative subpoenas and orders issued by OFAC.

Conclusion

This action signals OFAC’s focus on the US real estate sector and its readiness to impose maximum penalties for willful violations, including personal liability. Parties involved in real estate transactions should implement robust, risk-based screening and diligence to identify both direct and indirect SDN interests in property, promptly engage OFAC where potential blocking issues arise, and ensure complete and accurate responses to OFAC subpoenas and orders.

¹ US Persons are defined as: US citizens and permanent residents; entities organized under US law; and any individual or entity in the United States.