On June 12, 2025, the Office of Foreign Assets Control imposed a penalty of more than $215 million upon California-based venture capital firm GVA Capital Ltd. for alleged violations of Ukraine-/Russia-related sanctions and failing to comply with an OFAC subpoena. According to OFAC, GVA Capital managed an investment for Russian oligarch Suleiman Kerimov, between 2018 and 2021, following his designation by OFAC in April 2018 for being an official of the Government of the Russian Federation. OFAC reported that GVA Capital was issued a statutory maximum civil monetary penalty, which was imposed following OFAC’s issuance of a Notification of Blocked Property to Heritage Trust in 2022. Kerimov allegedly held an interest in Heritage Trust, an investment vehicle valued at more than $1 billion at the time of the sanction.
OFAC reported that, in April 2021, it learned of an upcoming transfer of shares in a U.S .company that was potentially for the benefit of a blocked person. An OFAC investigation revealed that the shares were owned by Heritage Trust for the benefit of Kerimov, who OFAC determined had retained an interest in the trust following his designation by OFAC in 2018. The discovery caused OFAC to issue the Notification of Blocked Property to Heritage Trust in June 2022 to ultimately prevent the total liquidation and transfer of the trust’s assets out of the United States. Further investigation into GVA Capital – the firm that managed the shares – revealed that its relationship with Kerimov dated back to the Summer of 2016 when senior managers of the firm met with Kerimov at his estate in France on at least two occasions to obtain personal approval for his investments. In September 2016, Kerimov reportedly agreed to invest $20 million in the U.S. company. Following these initial meetings, GVA Capital was instructed to manage Kerimov’s investments through his nephew and primary financial facilitator Nariman Gadzhieve, who the firm reportedly knew was serving as Kerimov’s proxy. OFAC eventually designated Gadzhieve in November 2022 for having acted on behalf of Kerimov, a designated individual.
OFAC also reported that, shortly after Kerimov’s designation in 2018, GVA Capital solicited a legal opinion regarding the applicability of U.S. sanctions on their investments – a legal opinion that explicitly cautioned that the sale or transfer of shares could not directly or indirectly involve Kerimov. In spite of this guidance, GVA Capital allegedly engaged in or attempted to engage in prohibited transactions or provided a prohibited service to Kerimov on four separate occasions between 2018 and 2021, in violation of Ukraine-/Russia-Related Sanctions Regulations.
During its investigation of GVA Capital, OFAC also issued an administrative subpoena to the firm requesting information regarding shares and services provided to Kerimov between 2018 and 2021. In 2021, GVA Capital reportedly produced a total of approximately 173 documents in response to that subpoena and certified, in October 2021, that its response was complete. After OFAC issued a Pre-Penalty Notice to GVA Capital in September 2023, the firm provided approximately 1,300 records in response to the subpoena that had not yet been provided to OFAC – a prolonged failure that, according to OFAC, resulted in 28 additional Reporting, Procedures and Penalties Regulations (RPPR) violations.
According to the Enforcement Release, the penalty imposed in this case reflected OFAC’s determination that GVA Capital’s violations were egregious in nature and were not voluntarily self-disclosed. A statutory maximum of $215,998,868 was imposed for the alleged violations, comprised of a $214,000,000 penalty for the sanctions violations and $1,988,868 for the reporting failures.