Last week, OFAC announced a whopping $215,988,868 penalty against a San Francisco venture capital firm for sanctions violations and for failing to comply with an OFAC subpoena. That number represents the maximum applicable civil monetary penalty. According to the agency’s press release, the firm, GVA Capital Ltd., knowingly continued to manage an investment for Russian oligarch Suleiman Kerimov even after he was added to the OFAC Specially Designated National List (“SDN”) in 2018. It is encouraging to see a decisive enforcement action against a Russian oligarch in 2025 and may be a sign that the new presidential administration is not abandoning sanctions enforcement – a widely held fear in light of some early administration statements.

Background on Kerimov and the SDN List

Even though the SDN list has “Special” in the name, getting on it is not a badge of honor – it means that an individual or entity has been sanctioned by the U.S. and that U.S. persons cannot do business with them. The whole point is to banish SDNs from all transactions involving the U.S. economy and U.S. financial system, which, like it or not, remains the biggest game in town.

Kerimov has a long sanctions “rap sheet.” He was first added to the SDN list in 2018 pursuant to Executive Order 13661, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine.” He was designated as an SDN again in 2022 after the outbreak of the war in Ukraine, pursuant to Executive Order 14024, “Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation.” Also in 2022, OFAC designated a number of Kerimov’s family members, business associates, and companies as SDNs. That same year, Fiji acted on a U.S. warrant to seize Kerimov’s $300 million yacht, the Amadea. (Unfortunately, it has turned out to be something of a burden, costing the U.S. government millions to maintain. But it will soon be auctioned off, and these costs will hopefully be recouped.)

GVA Capital’s Dealings with Kerimov

GVA Capital invests in the usual Silicon Valley stuff like AI, robotics, and self-driving cars, but, according to OFAC, it has a more unusual sideline in courting Russian oligarchs. (According to reporting from the San Francisco Standard, GVA started out in 2011 as a U.S.-investment offshoot of a Moscow-based company.) According to OFAC, in 2016, GVA executives twice traveled to Kerimov’s estate in France to schmooze him and get him to invest with them in an unnamed U.S. company. Kerimov apparently told them he was onboard and asked them to deal with his nephew, who was handling some of his financial affairs. (The nephew is also an SDN, as of 2022.) According to the OFAC Enforcement Notice, GVA worked with the nephew and sealed a $20 million investment deal, which involved some mildly complicated mechanics of money moving through two other entities.

When OFAC first put Kerimov on the sanctions list in 2018, GVA seems to have gotten worried and asked for a legal opinion on how the sanctions affected GVA’s U.S. investments. According to OFAC, the legal opinion said that because the company used by GVA as a vehicle for the investment “was not itself blocked property because it was not nominally owned 50 percent or more by a person on the SDN list,” the transaction was fine. That conclusion was wrong, though, and OFAC found evidence that Kerimov did have an interest in the company in question. Whichever lawyer wrote that opinion, however, also warned that GVA had to ensure Kerimov was not involved, even indirectly, in any transfer of shares.

GVA apparently did not listen to that advice and, OFAC found, kept trying to make at least four deals involving Kerimov’s property – an assignment agreement, two attempted sales, and an attempted distribution. Each of these transactions involved millions of dollars. According to the OFAC investigation, during the two attempted sales, GVA was back-channeling with Kerimov’s nephew to get direction and approval from Kerimov.

The OFAC Investigation

In 2021, OFAC started investigating a transfer of shares in the aforementioned unnamed U.S. company. In the course of the investigation, OFAC discovered that the shares were ultimately owned by “Heritage Trust.” OFAC determined that the trust’s dull name hid $1.3 billion belonging to Kerimov. The agency then issued a notice of blocked property against the trust in 2022. This prevented Kerimov from taking the money out of the U.S. Investigating this transaction also put OFAC onto the trail of investigating GVA’s relationship with Kerimov.

Big, Bad Mistakes by GVA

Now comes my favorite part of the blog post, where I get to be a Monday-morning quarterback and explain all the mistakes GVA seems to have made according to the OFAC materials. This isn’t legal advice, it’s just fun.

It’s pretty clear that you know who an investor is when you go hang out with him at his French estate. When he later ends up on the SDN list, you can’t go about business as usual with his investments. It’s not okay to keep talking to his nephew about all the multimillion-dollar transactions you’re trying to do with companies that are “secretly” owned by the oligarch. The fact that you’re dealing with the nephew gives away the game that you know who the real owner of a web of corporate entities is.

Don’t get advice from your lawyer about whether it’s cool to keep investing money from an SDN and then ignore the part where they warn you to make sure he stays out of it. Don’t just keep texting his nephew asking for a thumbs up emoji on deals or whatever.

And if you fail to use your common sense and do make those mistakes, and then you get a subpoena from OFAC asking for documents because they’re investigating you, don’t give them a small pile of documents and promise them that’s everything, then come back two years later with over a thousand more documents.

Nice, Aggressive Work by OFAC

The flipside of razzing GVA is cheering for OFAC’s tough and careful approach to this matter. In particular:

• Not letting a questionable legal opinion let GVA off the hook. Sometimes companies try to paper over their bad decisions with self-justifying legal opinions, but that was not viable here.
• Quickly blocking Heritage Trust as soon as they realized that it was a Kerimov operation.
• Expanding the net of SDNs to include Kerimov’s (presumably favorite) nephew.
• Imposing the maximum penalty possible on GVA and calling out their subpoena-evading tomfoolery.
• Giving a firm warning to unscrupulous “gatekeepers—such as investment professionals, accountants, attorneys, and providers of trust and corporate formation services” who may “knowingly or unwittingly furnish...access by illicit actors to the licit financial system.” As a lawyer, I can confirm we really do have an important role to play in not abusing our positions of trust and access.
• Using the under-used word “licit.”

Even in 2025, playing dumb about links to sanctioned individuals is not an effective compliance strategy for a U.S.-based institution. OFAC demonstrated real determination in rooting out Kerimov’s U.S. assets despite his attempts to hide his financial interests within a matryoshka doll of corporate entities. Let’s hope that’s a sign of continued dogged enforcement.