U.S. fines NY company $7M for ties to blacklisted oligarch

The United States has imposed a fine exceeding $7 million on a New York-based property management company for conducting business with Russian billionaire Oleg Deripaska, who is under U.S. sanctions. The penalty approaches the legal maximum allowed.

Deripaska, once Russias wealthiest individual, was sanctioned in 2018 following the Kremlin's 2014 annexation of Crimea. He also faces U.S. charges for attempting to circumvent these sanctions.

According to the U.S. Treasury Department, Gracetown Inc., located in New York, accepted 24 payments totaling $31,250 from April 2018 to May 2020 on behalf of a company owned by Deripaska.

The Treasury will take decisive action against those who disregard our sanctions and support our adversaries, said Treasury Under Secretary John Hurly. The total fine amounted to $7,139,305.

Gracetown was established in 2006 to manage three U.S. real estate properties for Deripaska, who remained the ultimate owner until his 2018 sanction designation. After being sanctioned, Gracetown received formal notices from the Treasury's Office of Foreign Assets Control outlining its responsibilities under U.S. sanctions and the penalties for noncompliance.

Despite these warnings, Gracetown continued to receive monthly payments linked to Deripaskas company in the U.S. The Treasury noted that the firm failed to report these blocked assets for 45 months, constituting a clear violation of sanctions regulations.

Author: Zoe Harrison