The US Treasury’s Office of Foreign Assets Control (OFAC) has imposed its maximum statutory penalty — a staggering $215.9 million — on San Francisco-based venture capital firm GVA Capital Ltd. for “egregious” and deliberate violations of US sanctions against Russia. This case is not only a milestone in sanctions enforcement but a resounding wake-up call for venture capitalists, fund managers, and investment advisers operating in global markets.
With investment advisers and venture capital firms subject to full anti-money laundering controls as of 1 January 2026, this case marks an early warning for US-based financial services to get their house in order within the next six months.
Anatomy of a sanctions breach
Early ties to a sanctioned oligarch
The trouble began well before any sanctions were imposed. In 2016, GVA Capital sought out Russian oligarch Suleiman Kerimov as a high-net-worth investor for a US tech venture. GVA’s senior management flew to Kerimov’s French estate twice, even using his private aircraft, to pitch the investment. The meetings were successful: Kerimov agreed to invest $20 million through Prosperity Investments L.P., a Guernsey-based entity he controlled, with the investment managed through GVA Auto LLC. This was a special purpose vehicle set up by GVA.
Crucially, all parties understood that Kerimov’s nephew and close financial proxy, Nariman Gadzhiev, would represent Kerimov’s interests going forward.
Kerimov gets sanctioned, and GVA ignores it
In April 2018, Kerimov was added to OFAC’s Specially Designated Nationals (SDN) List due to his role as an official of the Russian government. Under US sanctions law, any property or interest in property belonging to a sanctioned individual must be blocked, and no US person can deal with it, either directly or indirectly.
GVA did not sever ties. Instead, it sought a legal opinion that incorrectly concluded Prosperity was not blocked property because Kerimov did not nominally own 50% or more. But even that opinion warned that any transaction involving Kerimov would breach US sanctions. Despite this, GVA continued managing the investment, still through Gadzhiev, whom OFAC later designated in 2022 for acting on Kerimov’s behalf.
A pattern of prohibited dealings
Between 2018 and 2021, GVA attempted to deal in Kerimov’s blocked property at least four times:
December 2018: Assigned Prosperity’s interest in GVA Auto to another shell entity, Definition Services Inc., also linked to Kerimov’s Heritage Trust.
June 2019: Attempted to sell Definition’s GVA Auto interest for $20 million, consulting Gadzhiev for guidance despite US prohibitions.
August 2020: Tried again to sell shares worth $50 million across multiple investments linked to Definition.
April–May 2021: Prepared to distribute US company shares worth $18.5 million: an action that would have directly benefited Kerimov.
OFAC blocked the final attempt by issuing a Notification of Blocked Property against Heritage Trust in June 2022, freezing over $1.3 billion in assets.
Failure to cooperate with investigators
GVA’s compliance failures didn’t stop at the transactions. When OFAC issued a subpoena in June 2021, GVA responded with just 173 documents and falsely certified its compliance. It wasn’t until after receiving a Pre-Penalty Notice in 2023 that GVA disclosed it had more records, eventually submitting over 1,300 additional documents, a delay that constituted 28 separate violations of OFAC’s reporting rules.
Why venture capital and investors should be worried
This case is a stark illustration of the risks VC firms, private equity funds, and other non-bank financial actors face when operating in a globalised investment environment.
Sanctions risks are not limited to banks. Investment firms, even those with indirect exposure, can be liable for facilitating or managing assets linked to sanctioned individuals.
Proxies and layered structures don’t protect you. OFAC explicitly rejected GVA’s reliance on formalistic ownership definitions. If control or economic benefit flows to a sanctioned person, you are likely violating the law.
Due diligence is not optional. GVA’s downfall began with a lack of meaningful scrutiny and was exacerbated by ignoring clear red flags.
Recordkeeping lapses now carry greater consequences. In line with DOJ priorities, OFAC recently extended its sanctions-related record keeping requirement from 5 to 10 years — doubling the timeline for accountability.
OFAC’s warning to the gatekeepers
This is the largest sanctions enforcement action yet of President Trump’s second term and reflects a clear policy stance: gatekeepers will be held accountable. Venture capital, investment managers, attorneys, and trustees are now under direct scrutiny. OFAC warned that these professionals are often best placed to detect and report illicit access to the US financial system, and will be penalised if they don’t.
This aligns with broader enforcement trends:
The Department of Justice has ramped up sanctions enforcement, especially where facilitation and wilful blindness are involved.
AML requirements for investment advisers are expanding. As of January 1, 2026, firms like GVA will be subject to full anti-money laundering (AML) programme obligations under the Bank Secrecy Act. The rule was finalised by FinCEN in August 2024 and mandates proper risk-based controls to prevent financial crime.
An AML warning for the VC industry
GVA Capital’s actions illustrate how not to manage compliance. The firm actively pursued a sanctioned investor, ignored legal red flags, structured transactions through proxies, and repeatedly tried to extract value for a designated person. When confronted by regulators, it stalled and concealed information.
The penalty was severe. It sends an unequivocal message to the investment community: ignorance is no excuse, and complexity is not a shield.
The compliance burden on VCs and fund managers is growing, not shrinking. With OFAC, DOJ, and FinCEN stepping up enforcement and oversight, firms must move beyond box-ticking and adopt serious, proactive sanctions compliance strategies. The alternative, as GVA has learned, is a multimillion-dollar disaster.
