Every parent wants their kid to succeed. If the kid wants to be a soccer superstar, you help your kid. Maybe a high-end sports camp will take your kid’s talent to the next level, so you send them to IMG Academy, one of the world’s leading sports training schools. (It even has a wikipedia page listing its notable alumni.) It’s expensive, but your kid is worth it. There are tuition payments and extra costs through out the year.
What happens when the parent in this situation is a high-ranking member of a Mexican drug cartel? High enough in the organization that the parent is listed as a Specially Designated National on Treasury’s Office of Foreign Assets Control sanctions list, sanctioned under the Foreign Narcotics Kingpin Designation Act for providing financial support and services to a sanctioned Mexican Drug Trafficking Organization and/or to its principal leader.
IMG Academy didn’t do anything different. As a result it had 89 transactions that violated the Foreign Narcotics Kingpin Designation Act. According to the OFAC press release the parents put their real names directly on the school’s enrollment documents. If IMG Academy had run a sanctions check it would have hit a red flag.
This case reminds me of the Cartier diamond case. The Las Vegas casino store sold jewelry to a customer and shipped it home to them in China. It turns out the customer was on a sanctions list.
The IMG Academy case is a specific warning to schools and universities with international students:
As with any other enterprise, academic institutions must be sure they understand all sources of sanctions risk and implement effective controls to ensure their activities do not violate U.S. sanctions prohibitions
More broadly, any organization that has international touchpoints will have opportunities for impermissible dealings with sanctioned actors, whether they intend to or not.
IMG Academy was not getting bags of cash to pay those tuition bills. It was getting wire transfers and credit card payments.
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