US imposes $7 million penalty on company connected to sanctioned Russian oligarch
The U.S. Treasury Department has fined New York–based property manager Gracetown Inc. more than $7 million for accepting payments tied to a company ultimately owned by sanctioned Russian oligarch Oleg Deripaska.
In a Dec. 4 press release, the Treasury's Office of Foreign Assets Control (OFAC) said Gracetown violated Russia-related sanctions and failed to report blocked assets. The $7,139,305 penalty is near the statutory maximum, according to the agency.
"Treasury will act firmly against those who ignore our sanctions and aid our adversaries," Under Secretary for Terrorism and Financial Intelligence John K. Hurley said in a statement.
He added that the department "will continue to investigate and hold accountable those who enable sanctioned actors."
Deripaska, once Russia's richest man and a longtime associate of Russian President Vladimir Putin, founded Basic Element, one of Russia's largest industrial groups, and Rusal, the world's second-largest aluminum producer. Like other Russian oligarchs, he amassed his fortune during the rapid privatizations of the 1990s following the collapse of the Soviet Union.
The United States sanctioned Deripaska in 2018, citing his ties to the Kremlin. The United Kingdom imposed additional sanctions in 2022 after Russia launched its full-scale invasion of Ukraine.
According to OFAC, Gracetown was created in 2006 to manage three luxury properties in New York and Washington, D.C. that Deripaska purchased around the same time, and the company relied heavily on individuals connected to him to finance and direct its operations.
Deripaska served as the company's ultimate owner from 2006 to 2018. In the months before his sanctions designation, control shifted to a relative and longtime associate. OFAC said a New York-based property manager oversaw Gracetown's bank accounts and carried out instructions from stakeholders based in Russia.
