On 24 November 2025, the US Treasury’s Office of Foreign Assets Control (OFAC) imposed a $4,677,552 civil penalty on an individual for willfully dealing in blocked real property linked to a Russia sanctions designation, and for failing to comply with an OFAC subpoena.
This is OFAC’s largest publicly announced penalty against an individual to date, and the fact pattern shows exactly why.
This is the kind of enforcement action that should make everyone in real estate, lending, title, brokerage, private equity, and legal services sit up. Not because it is obscure, but because it is the opposite. The risk was recorded, searchable, and avoidable.
This is the opposite of a hidden risk: under OFAC rules, when a blocked person has an interest in a property, the property is blocked, and an unlicensed transfer does not remove the restriction.
What happened?
OFAC’s enforcement release lays out a straightforward timeline.
1) A property became blocked, and the notice was public
- In March 2022, OFAC added a family member of a Russian oligarch to the SDN List under Executive Order 14024, which blocked their US property interests, including an Atlanta area residential property held in their own name.
- In September 2022, OFAC sent a notice to Fulton County about the property’s blocked status. At OFAC’s request, the county recorded the document in October 2022, making it publicly available.
Despite this, the property went into foreclosure.
2) The buyer acquired it through foreclosure, then OFAC warned them directly
- An Atlanta based real estate investment company, King Holdings LLC, bought the property at public auction in January 2023. OFAC notes the buyer apparently did not realise the property was blocked at purchase.
- In April 2023, OFAC contacted the individual behind King Holdings (“U.S. Person-1”) and explained:
- the property remained blocked
- dealings were prohibited without OFAC authorisation
- how to apply for an OFAC licence
No licence application was made.
3) The individual kept going anyway, and pulled third parties into the blast radius
OFAC says the individual continued the plan to renovate and sell the property, including:
- 13 April 2023: signing for an $872,338 mortgage, and attesting as part of the mortgage materials that payments were OFAC compliant
- August 2023: listing the renovated property for sale
- December 2023: signing an agreement to sell the property for $1.4m to an unwitting third party, while warranting “good and marketable title” and not informing the buyer, closing law firm, or other parties that OFAC had already said the property was blocked
4) A cease and desist order arrived, then the sale closed anyway
- 1 February 2024: OFAC issued a cease and desist order and an administrative subpoena seeking information on dealings involving the property
- The individual certified the subpoena response as complete, but OFAC says it omitted the listing and pending sale
- 5 March 2024: King Holdings certified compliance with the cease and desist order through counsel
- Eight days later: the individual closed the sale anyway, in violation of OFAC’s regulations and the cease and desist order
OFAC states the individual made at most $478,000 from the sale.
Why did OFAC make such a big deal?
OFAC applied the statutory maximum penalty and cited aggravating factors that are especially relevant to real estate and professional services teams:
- Clear notice, sustained conduct: dealing in the property for nearly a year after receiving “clear and actual notice” from OFAC
- Willfulness and inaccurate reporting: certifying an incomplete and inaccurate subpoena response
- Third party harm: exposing lenders, lawyers, and an unwitting buyer to potential economic harm and legal liability
- Non disclosure: OFAC determined the conduct was not voluntarily self-disclosed
This is not a “sanctions screening failure”. It is what enforcement looks like when OFAC believes someone heard “stop” and carried on.
Why this matters beyond this one property
Real estate has sanctions exposure, even when it looks domestic and routine
OFAC explicitly calls out that sanctions risk can arise in real estate, and that multiple parties can have blocking and reporting obligations, including brokers, title insurers, and attorneys.
“Screen the now” is not enough
OFAC notes blocked interests may be indirect, and a blocked person’s name may not appear on transactional documents. In this case, a historical ownership check would have surfaced the SDN.
That is the same core problem we see in other sanctions typologies: ownership chains change, paperwork changes, and the risk hides in the history.
Practical controls for real estate, lending, and title teams
Here are the controls this case effectively demands.
1) Treat foreclosure and auctions as high-risk entry points
Build a “sanctions flag” into auction and foreclosure acquisition workflows:
- screen current counterparties
- screen prior owners and beneficial owners
- check for recorded sanctions notices and liens
- stop the process if an SDN appears anywhere in the ownership chain, even historically
2) Expand screening beyond names on the contract
Minimum uplift for property transactions:
- prior title holders and seller history
- property address screening (where your tools support it)
- connected parties: lenders, brokers, law firms, settlement agents
- escalation triggers: SDN proximity, Russia nexus, unexplained LLC layers, sudden transfer patterns
3) A hard stop playbook when “blocked property” appears
If you discover a blocked interest:
- pause all dealings
- ringfence funds and documents
- take legal advice
- consider an OFAC licence route where appropriate
- document the decision trail and communications
OFAC specifically highlights that unauthorised transfers can be treated as null and void, creating downstream title and claim issues.
4) Don’t ignore OFAC orders or subpoenas
A compliance team’s worst moment is not “we missed a red flag”. It is “we received an order and then acted in contradiction to it”.
Subpoena handling controls should include:
- a single accountable owner
- legal review and sign-off
- completeness checks against deal timelines
- a transaction freeze while any cease and desist is active
5) Prepare for rising transparency expectations in US real estate
Even if you are focused on sanctions, the wider direction of travel is more reporting and more scrutiny.
FinCEN’s Residential Real Estate Rule reporting requirements were postponed, with exemptive relief for closings before 1 March 2026.
FinCEN also renewed real estate Geographic Targeting Orders through 28 February 2026. FinCEN.gov
The compliance point is simple: sanctions enforcement is already here, even as the reporting regime evolves.
A ready-made training case
This enforcement action is useful because it is easy to explain to non specialists:
- the risk was publicly recorded
- OFAC provided direct notice
- the party continued anyway
- third parties got dragged into it
- the penalty dwarfed the profit
It is a ready-made training scenario for teams who think sanctions only affect banks and shipping.
A note on the wider pattern in Atlanta
OFAC did not publicly name the blocked owner in this enforcement release. But investigative reporting has shown how sanctioned Russian individuals have held significant US real estate interests in the Atlanta area and how opaque structures can complicate the ownership trail.
The takeaway is not “this is an Atlanta problem”. It is that real estate is a sanctions surface area, and the usual opacity tools apply.
What to do now
If you support property acquisitions, lending, title, or closings:
- Update your checklists to include prior owners screening and recorded sanctions notices.
- Add a formal “blocked property” escalation path and transaction freeze trigger.
- Train teams that foreclosure does not cleanse a sanctions problem.
- Ensure contracts, title opinions, and closing processes include sanctions representations that actually get verified.
- Stress test subpoena response workflows for completeness and governance.
- Track FinCEN’s timeline changes so your operating model is not caught flat-footed.
Real estate is a known target for money laundering activities and sanctions breaches. AML and sanctions training helps agents and landlords identify suspicious activity and understand their legal reporting duties.
