I was left scratching my head on how this Atlanta case got so bad for the real estate investor.
In March 2022, OFAC added a family member of a Russian oligarch to its sanctions list. This person owned property in Atlanta, Georgia. All dealings in that property, including its transfer, sale, or foreclosure, were blocked by the sanctions. According to the OFAC press release, OFAC delivered a notice to Fulton County.
It’s not clear if the OFAC notice was recorded against the title to the property. I think OFAC compliance is still working its way through the real estate transaction process.
The property ended up in foreclosure. Again, it’s not clear how that happened. Would the bank foreclose because the debtor ended up on the sanctions list? That would violate the sanctions. Maybe the debtor just stopped paying and the lender didn’t include sanctions review as part of the foreclosure process
King Holding LLC bought the Atlanta property at auction in January 2023, with plans to renovate and sell the property.
OFAC became aware of the foreclosure and transfer of the property in April 2023 and immediately contacted King Holding, explaining they must apply for an OFAC license. You would think that things would stop here.
Instead King Holding obtained a mortgage on the property to finance the renovation. The mortgage application included a statement that the loan was compliant with OFAC’s regulations. You would think that the renovation lender would run a title check against the property. If so, the OFAC notice must have been deficient in filing against the property records. Regardless, King Holding knew that OFAC was involved.
Then King Holding sold the property to a third party in December 2023. Once again, you would think that the buyer or the buyer’s lender would run a title check against the property. If so, the OFAC notice must have been deficient in filing against the property records.
OFAC stepped in and issued a cease-and-desist letter and a subpoena in February 2024, before the sale of the property had closed. King Holding went ahead and closed on the sale of the property to the third-party buyer. The buyer was not aware of the blocked status of the property.
To probably only one person’s surprise (the person at King Holding), OFAC said the violations constituted an ‘egregious’ case. This meant the base penalty was the statutory maximum of $4,677,552. That is compared to the $478,000 profit from the sale of the property.
Clearly the real estate sector has some work to do with regards to sanctions reviews. This responsibility falls on agents, brokers, title insurers and lawyers. Mortgage lenders have been dealing with this for a while. But when you take the lender out of the equation it may get lost in the process.
The biggest lesson is that should comply with administrative subpoenas and orders issued by OFAC. You definitely should not continued to deal in blocked property after OFAC provides actual notice that doing so was prohibited and then conceal the conduct from OFAC.
Sources:
- OFAC Imposes $4.7 Million Penalty on Real Estate Investor for Dealing in Blocked Russian’s Property
- Enforcement Release: November 24, 2025 OFAC Imposes $4,677,552 Penalty on an Individual for Violating Russia Sanctions and Reporting Obligations
- A Russian banker spent millions on Atlanta properties, left with little trace By Thad Moore and John Dell’Osso in The Atlanta Journal-Constitution
- Family International Realty LLC and its Owner Settle with OFAC for $1,076,923 Related to Apparent Violations of Ukraine-/Russia-Related Sanctions
[Updated on December 8 for typos]