Serving as a Fiduciary for Sanctioned Clients? OFAC’s Recent Enforcement Action is a Warning Shot

Recent enforcement actions signal the Office of Foreign Assets Control's (“OFAC”) increased scrutiny of professionals, including attorneys, who represent or act for sanctioned parties. For example, in a January 2025 Enforcement Release, OFAC cautioned so-called “gatekeepers—including realtors, investment advisers, attorneys, and trust and corporate services providers” against using their services to “conceal a sanctioned party’s interest or evade sanctions compliance controls.” 

There, a Florida based real estate company, and its owner reached a $1 million settlement with OFAC to resolve potential civil liability for engaging in a “willful scheme to evade OFAC sanctions by transferring nominal ownership of three luxury condominiums owned by two sanctioned Russian oligarchs.” OFAC specifically noted that such “gatekeepers should remain vigilant of the risk that unscrupulous actors, including sanctioned parties or their proxies, may seek to use professional services to conceal a property interest or otherwise evade OFAC sanctions.” 

More recently, On December 9, 2025, OFAC announced a $1 million settlement with an attorney who served as a fiduciary for a trust connected to a Russian oligarch. OFAC alleged the attorney violated Russian sanctions by taking actions on behalf of the trust after the client was added to OFAC’s List of Specially Designated Nationals and Blocked Persons.

According to OFAC’s Enforcement Release, the conduct occurred between 2018 and 2022. Notably, OFAC found that even though the attorney relied on advice from experienced outside sanctions counsel, they nonetheless “should have known” that the sanctioned oligarch retained control over the trust. OFAC determined that the attorney’s personal knowledge and continued involvement resulted in 122 apparent violations, including authorizing asset transfers and payments.   This steep penalty, despite the presence of mitigating factors such as the reliance on outside counsel, underscores OFAC’s unyielding stance against attorneys and other professionals. 

Such enforcement actions are also a reminder for legal professionals to familiarize themselves with the sections of the Code of Federal Regulations regarding general or specific licenses for the representation of a sanctioned individual (see, e.g., 31 CFR 587.506 (Provision of Legal Services – Russia); 31 CFR 585.506 (Provision of Legal Services – China)).  Certain provisions outline some of the general licenses available, such as removing a sanctioned individual from a sanctions list (see 31 CFR 501.807 - Procedures Governing Delisting from the Specially Designated Nationals and Blocked Persons List) while other kinds of representations, such as seeking the release of blocked funds, require specific licenses (see 31 CFR 501.801 – Licensing). 

Accordingly, Practitioners acting as fiduciaries or in similar professional capacities must remain diligent, as the agency is focused on holding such professionals accountable for sanctions violations involving entities and individuals linked to high-risk jurisdictions.  Indeed, OFAC has made clear that the Know Your Customer expectations it has for businesses are the same as the Know Your Client expectations it has for law firms and other professionals.