Listen to the article
The U.S. Treasury Department has levied a $7.1 million fine against Gracetown Inc., a New York-based property management firm, for violating sanctions related to Russian oligarch Oleg Deripaska, officials announced Thursday.
According to Treasury’s Office of Foreign Assets Control (OFAC), Gracetown received 24 payments totaling $31,250 between April 2018 and May 2020 on behalf of a company owned by Deripaska, despite clear notifications that such dealings were prohibited under U.S. sanctions.
Gracetown was established in 2006 to manage three luxury real estate properties in New York and Washington, D.C., which Deripaska had acquired through various legal entities around that time. The enforcement action represents one of several recent moves by U.S. authorities to target the Russian billionaire’s American assets.
“We will continue to investigate and hold accountable those who enable sanctioned actors,” said John K. Hurley, Treasury’s undersecretary for terrorism and financial intelligence, emphasizing the importance of adhering to OFAC guidance and the consequences of failing to do so.
Deripaska, who maintains close ties with Russian President Vladimir Putin, has been under U.S. sanctions since 2018, when the Treasury Department accused him of acting on behalf of senior Russian officials and operating in Russia’s energy sector. The sanctions freeze all of his U.S. assets and prohibit American individuals and companies from engaging in business with him or his properties.
The case against Gracetown appears connected to U.K. businessman Graham Bonham-Carter, who was arrested in October 2022 for conspiracy to violate U.S. sanctions imposed on Deripaska. Justice Department filings from that year link Bonham-Carter to Gracetown. He was also charged with wire fraud related to funding Deripaska’s U.S. properties and attempting to expatriate the oligarch’s artwork to New York.
Attempts to reach Gracetown for comment were unsuccessful, and a lawyer who has previously represented Deripaska did not immediately respond to inquiries.
The Treasury’s action comes amid broader efforts to enforce sanctions against Russian elites following Russia’s invasion of Ukraine, though Deripaska’s sanctions predated the war, stemming from alleged Russian interference in the 2016 U.S. election and other malign activities.
In 2022, Deripaska and three associates faced criminal charges in New York for allegedly conspiring to violate U.S. sanctions. The indictment also included accusations that they plotted to ensure his child was born in the United States, potentially securing American citizenship for the child.
Deripaska has previously sought to challenge portrayals of his business activities in Western media. In 2017, he sued The Associated Press over a story about his business dealings with Paul Manafort, former campaign chairman for President Donald Trump. Deripaska claimed the article falsely accused him of criminal activity and damaged his career. A federal judge dismissed the defamation and libel lawsuit later that year.
The oligarch made his fortune in the aluminum industry during the privatization of Russian state assets following the collapse of the Soviet Union. As founder of Rusal, one of the world’s largest aluminum producers, Deripaska became one of Russia’s wealthiest individuals, though sanctions have reportedly impacted his global business interests significantly.
The Treasury Department’s enforcement action against Gracetown signals continued vigilance against attempts to circumvent sanctions against Russian elites and their business networks, as U.S. authorities work to maintain pressure on individuals with ties to the Kremlin.
Fact Checker
Verify the accuracy of this article using The Disinformation Commission analysis and real-time sources.
8 Comments
This is a concerning development as it highlights the importance of strictly enforcing sanctions against Putin allies. Allowing sanctioned individuals to continue operating in the U.S. undermines the integrity of the sanctions regime.
You’re right, the $7.1M fine sends a strong message that the U.S. is serious about holding enablers of sanctioned actors accountable.
Firms that violate sanctions must face serious consequences. Kudos to the Treasury Department for taking this enforcement action against Gracetown Inc. Adherence to OFAC guidance is critical to maintain the effectiveness of sanctions.
Agreed, this penalty highlights the risks for companies that fail to properly vet their dealings and comply with sanctions. The U.S. is clearly committed to cracking down on these violations.
While the fine may seem substantial, it’s important to send a clear signal that the U.S. will not tolerate any evasion of its sanctions, even by proxy. Deripaska’s ties to Putin make this a serious national security issue that warrants a firm response.
While the fine may seem steep, it’s a necessary measure to deter others from assisting sanctioned Russian elites like Deripaska. Maintaining the integrity of the U.S. sanctions regime is critical, especially given Russia’s invasion of Ukraine.
This case underscores the need for rigorous due diligence by firms operating in the U.S. to ensure they are not inadvertently enabling sanctioned individuals or entities. Proactive compliance is crucial to avoid steep penalties like this one.
Absolutely, companies must be extremely cautious and diligent when dealing with any parties that could be connected to sanctioned Russian oligarchs or the Kremlin. The consequences of non-compliance can be severe.