The Treasury Department has fined a New York property-management company $7.1 million on Thursday for violating Russia-related sanctions and failing to report blocked assets.
The Office of Foreign Assets Control alleged Gracetown Inc. continued handling payments tied to sanctioned Russian billionaire Oleg Deripaska long after federal officials warned it to stop.
OFAC said Gracetown received 24 payments between April 2018 and May 2020 on behalf of a company ultimately owned by Deripaska.
The agency said it had sent Gracetown a certified notice in 2018 explicitly warning that any direct or indirect dealings involving Deripaska or his property were prohibited under U.S. sanctions.
Gracetown also failed to report blocked assets under its control for more than 45 months, a delay OFAC said contributed to the size of the penalty.
Officials described the violations as "egregious" and said the company did not voluntarily disclose them.
"Treasury will act firmly against those who ignore our sanctions and aid our adversaries," Treasury Under Secretary for Terrorism and Financial Intelligence John Hurley said in a statement.
"Under Secretary [Scott] Bessent's leadership, we will continue to investigate and hold accountable those who enable sanctioned actors."
Gracetown was formed in 2006 to manage three luxury properties in New York and Washington, D.C., that Deripaska acquired through a network of legal entities, according to the agency.
He remained the beneficial owner of Gracetown until early 2018, shortly before he was added to OFAC's "specially designated nationals and blocked persons" list.
Once Deripaska was designated, all of his U.S. assets were blocked, and U.S. companies and individuals were barred from doing any business involving his property or entities he owned.
Because of Gracetown's long-standing ties to him, OFAC warned the company directly about its legal obligations and the consequences for noncompliance.
Despite that notice, the Treasury Department said Gracetown continued receiving monthly payments owed to a Deripaska-owned affiliate and used the funds to cover management expenses for the luxury properties.
The company also failed to file mandatory reports identifying the blocked property in its possession, another violation of federal regulations.
Companies must immediately block and report assets tied to designated individuals, including funds, debts, and other financial interests, as required under OFAC's reporting regulations.
Separately, Deripaska was indicted in September 2022 by a federal grand jury in Manhattan on charges of sanctions evasion and making false statements. Prosecutors said he continued to maintain U.S. assets through associates after he was blacklisted.
Deripaska is not in U.S. custody and is believed to remain in Russia.
Gracetown does not appear to have a public website or listed contact information, and Newsmax could not reach the company for comment.
Michael Katz ✉
Michael Katz is a Newsmax reporter with more than 30 years of experience reporting and editing on news, culture, and politics.
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