Recent OFAC Enforcement Highlights Expansive Compliance Obligations for U.S. Persons and Institutions
Recent OFAC enforcement activity demonstrates the agency’s continued focus on sanctions compliance across sectors and geographic contexts, as shown by settlements involving IMG Academy, LLC and a U.S. individual.
IMG Academy, LLC Settles with OFAC for $1.7 Million
In the first matter, OFAC announced on February 12, 2026, that IMG Academy—a U.S.-based academic and athletic training institution—agreed to pay $1,720,000 to settle apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations.[1] Over a five‑year period, IMG entered into tuition enrollment agreements with two individuals designated under the Kingpin Act and processed 89 related financial transactions, including wire transfers from third parties and credit card payments, for the benefit of the designees’ children. OFAC found that routine due diligence, such as screening contracting parties or payors, would have revealed that the individuals’ names matched entries on the SDN List. The agency cited aggravating factors such as reckless disregard for sanctions requirements, actual knowledge of transactional activity with the sanctioned parties, and the provision of economic benefits to cartel‑linked individuals. Mitigating considerations included IMG’s lack of prior violations, its prompt and substantial cooperation, and the implementation of a formal sanctions compliance program following an ownership change. As OFAC emphasized, academic institutions—despite often perceiving themselves as low‑risk—face meaningful sanctions exposure due to international student bodies, foreign payors, and global operational footprints, and therefore must adopt risk‑based controls, screening procedures, and training programs.
A U.S. Individual Settles with OFAC for $3,777,000
In the second matter, announced on February 25, 2026, a U.S. citizen residing abroad agreed to pay $3,777,000 to settle liability for 20 apparent violations of the Syrian Sanctions Regulations.[2] Between 2018 and 2021, when U.S. sanctions on Syria were fully in effect, the individual served in executive and board roles for multiple Syrian real estate companies, approving budgets, signing financial statements, supervising expenses, and participating in operational and personnel decisions. OFAC determined that the conduct was egregious and not voluntarily self‑disclosed; the individual knew or should have known that Syria was subject to comprehensive sanctions and only ceased the activity after receiving an administrative subpoena. Aggravating factors included the multi‑year pattern of services provided to companies that bolstered Syria’s luxury real estate sector under the Assad regime, the individual’s extensive professional experience, and knowledge of operating in sanctioned jurisdictions. Mitigating considerations included a lack of prior violations, eventual improved cooperation after retaining new counsel, and execution of a tolling agreement. OFAC underscored that U.S. persons are obligated to comply with sanctions programs regardless of residence, and that sanctions remain enforceable for conduct occurring before a program’s repeal—in this case, the lifting of Syria‑related sanctions in 2025 did not shield the individual from liability for earlier violations.
Key Takeaways
Together, these cases highlight several key lessons for organizations and individuals subject to U.S. jurisdiction. All counterparties—including students, parents, third‑party payors, executives, board members, and beneficial owners—should be screened against OFAC lists on a recurring basis. U.S. persons must recognize that providing services, including managerial or operational support, can constitute a prohibited export of services to sanctioned jurisdictions or blocked persons, even without any U.S.‑based transactional nexus. Organizations should maintain robust, risk‑based sanctions compliance programs incorporating clear policies, automated screening, escalation procedures, periodic testing, and employee training. Both matters also reaffirm that timely and fulsome cooperation with OFAC can meaningfully affect penalty outcomes, while delayed or limited cooperation can significantly reduce mitigation credit. Finally, parties should not rely on anticipated shifts in U.S. foreign policy or sanctions regimes; OFAC enforces sanctions based on the rules in effect at the time of the conduct.
[1] Settlement Agreement between the U.S. Department of the Treasury's Office of Foreign Assets Control and IMG Academy, LLC, https://ofac.treasury.gov/recent-actions/20260212
[2] An Individual Settles with OFAC for $3,777,000 Related to Apparent Violations of Syrian Sanctions Regulations, https://ofac.treasury.gov/recent-actions/20260225_66
The foregoing is for informational purposes only. It is not intended as legal advice and no attorney-client relationship is formed by the provision of this information.