OFAC Fines US Person for Payments on Behalf of Sanctioned CEO
The Office of Foreign Assets Control fined an unnamed U.S. person $45,179 after OFAC said they violated the agency’s Global Magnitsky Sanctions Regulations.
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The person allegedly made six payments worth $45,179 on behalf of a sanctioned person, OFAC said, adding that they knew at the time the person was subject to sanctions. Three of the payments were meant as “indirect compensation” to the blocked person, while the other three “facilitated the blocked individual’s business operations” in the United Arab Emirates.
OFAC said the violations weren’t voluntarily disclosed, and three of the violations were “egregious.” The agency said it could have imposed a more than $2 million fine but settled on a lesser penalty because the unnamed person cooperated with OFAC’s investigation and hadn’t received a penalty notice within the last five years, and because of the ”low volume and value and brief duration” of the payments.
The agency said the person was hired to provide legal, financial and administrative services to a U.S. company “in the equine industry” in 2006. In 2020, OFAC sanctioned the CEO of the company, but the unnamed person didn’t think the sanction applied to their “own conduct,” so they continued to “fulfill their usual duties, which included executing payments on behalf of the” sanctioned CEO.
The person made most of those payments directly from the company’s bank accounts, and they made other payments through their U.S.-based “professional services firm in order to earn credit card points,” OFAC said.
Although the person knew the CEO was sanctioned, OFAC said the person didn’t “seek or obtain information or guidance about the legal implications” of the designation “for themselves or the company.” They also didn’t ask for guidance or a license from OFAC.
The agency pointed to several aggravating factors that led to the penalty, including the fact that the unnamed person knew the company’s CEO was sanctioned and “acted recklessly” by not taking steps to learn more about those “implications.” They also allowed the CEO to access money in the U.S. that “should have been unavailable” to the CEO, which allowed the CEO to carry out their “business activities abroad.”