US Treasury imposes $7.1M fine on New York company for overseeing properties of Putin associate

WASHINGTON The U.S. Treasury Department has levied a $7.1 million penalty on a property management company based in New York for breaching sanctions by overseeing high-end real estate for Oleg Deripaska, a Russian oligarch closely associated with President Vladimir Putin.

The Treasurys Office of Foreign Assets Control (OFAC) stated that Gracetown Inc. received 24 payments between April 2018 and May 2020 totaling $31,250 on behalf of an entity owned by Deripaska. Despite prior warnings from OFAC that conducting business with Deripaska was prohibited, the firm continued its activities.

Legal documents from the Justice Department in 2022 linked Gracetown Inc. to U.K. businessman Graham Bonham-Carter, who was arrested in October 2022 for conspiring to breach U.S. sanctions on Deripaska and committing wire fraud related to financing the oligarchs U.S. properties and transferring his artwork to New York.

Deripaska has been under U.S. economic sanctions since 2018 for acting on behalf of a senior Russian official and engaging in the Russian energy sector. All assets under U.S. jurisdiction are blocked, and Americans are barred from transactions involving his holdings or property interests.

In 2022, Deripaska and three associates were charged in New York with conspiring to violate U.S. sanctions and planning to ensure the birth of his child in the United States. Previously, he filed a defamation lawsuit against The Associated Press in 2017 over claims about his business connections to Paul Manafort, which was dismissed later that year.

The Treasury emphasized that the penalty against Gracetown underscores the critical importance of complying with OFAC regulations and the severe repercussions for noncompliance. John K. Hurley, Treasury's undersecretary for terrorism and financial intelligence, affirmed the agencys commitment to investigating and holding accountable those who facilitate sanctioned individuals.

Gracetown, founded in 2006, managed three luxury properties in New York and Washington, D.C., acquired by Deripaska through various entities at the same time.

Analysis: Enforcement of U.S. Sanctions on Russian Oligarchs

The Treasury Department’s $7.1 million penalty against Gracetown Inc. highlights the strict enforcement of U.S. sanctions on individuals linked to the Russian government. Despite multiple warnings from OFAC, the company continued managing high-end properties for Oleg Deripaska, demonstrating a clear disregard for regulatory requirements.

This case also emphasizes the international scope of sanctions compliance. Legal actions involving U.K. businessman Graham Bonham-Carter illustrate that sanctions violations can extend beyond U.S. borders and involve complex financial networks to facilitate prohibited transactions.

The Treasury’s statement underscores that all assets under U.S. jurisdiction linked to sanctioned individuals are blocked, and any engagement with such assets carries significant legal and financial consequences. Gracetown’s penalty serves as a clear warning to other property managers and financial intermediaries about the need for rigorous compliance protocols.

Overall, this enforcement action reinforces the U.S. government’s commitment to holding accountable those who support sanctioned individuals, ensuring that sanctions maintain their intended impact on foreign political and economic actors.

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• US Treasury slaps $7.1M fine on New York firm for managing properties for Putin ally