OFAC Fines Attorney for Russian Sanctions Violations

An attorney settled OFAC charges for authorizing transactions and performing services for a trust connected to a sanctioned Russian oligarch.

According to the enforcement release, the individual, an attorney and former U.S. government official, established a professional relationship with a Russian oligarch while working in private practice. OFAC said that prior to the oligarch’s sanctions designation, the individual agreed to serve as a fiduciary for a U.S.-based trust funded almost entirely by the oligarch, a role that granted broad authority over the trust's investments and distributions.

OFAC said the oligarch was added to the SDN List in April 2018, which blocked their property interests and prohibited U.S. persons from providing services to them. The agency described how the fiduciary retained outside counsel to assess the trust's status; this counsel opined that the trust did not appear to be blocked, based on the premise that a family member acting as a "Proxy" for the oligarch had no substantive role in the trust's management. OFAC stated that the individual should have known, based on their history with the client, that the Proxy continued to be involved in the trust's operations, which allowed the oligarch to retain control and a property interest in the trust. OFAC determined that despite relying on legal advice, the fiduciary continued to authorize asset transfers, payments, and agreements for the trust until resigning in mid-2022, resulting in 122 apparent violations.

OFAC found the individual violated the Ukraine-/Russia-Related Sanctions Regulations.

The individual agreed to pay a civil monetary penalty of $1,092,000 to settle the potential liability.