‘’I didn’t even know what OFAC is.’’- The Guy Who Just Got Hit With the Biggest Individual Sanctions Penalty in 21 Years You buy a house at auction. Pull title. Everything’s clean. Two lenders agree. Four law firms sign off. You close, renovate, and resell. Then the federal government hits you with the largest individual sanctions penalty in 21 years. This happened in Alpharetta, Ga., last year. A decaying mansion sat empty for a decade. The Russian-born owner married a Putin crony and left Georgia behind. When the U.S. sanctioned her in 2022, the Treasury filed a public notice at the Fulton County Courthouse: This property is blocked. Don’t touch it. The notice was indexed under “Karina Rotenberg.” The mansion’s deed listed “Karina Fox,” her former name. Unless you knew to search both, you’d never find it. Sahib Arora ran King Holdings, a small house-flipping operation. They won the mansion at auction for $922,000. Sight unseen, but title came back clean. So did the title searches for two subsequent lenders and multiple law firms. Nobody caught it. Three months after closing, an OFAC investigator called. The property was frozen. The sale was void. Stop everything. Arora consulted a local real estate attorney. Georgia law said King Holdings owned the property. They’d already discovered it needed repairs totaling hundreds of thousands. The renovation loan had a one-year clock ticking. They renovated anyway. Listed it. Went under contract. Closed for $1.4 million in March 2024. OFAC called it “egregious” and “willful.” The penalty? $4,677,552. The chain of events: - Treasury indexed the warning under one name while the property was titled under another - Multiple banks missed it - Multiple title companies missed it - Multiple law firms cleared it Clean title doesn’t mean what you think it means. Your title company searches what’s indexed in county records. If a federal agency files something under a different name variant, you’ll never see it. OFAC maintains its own sanctions list. So does the FBI. So does FinCEN. None of them talk to your title company automatically. Foreign nationals change names through marriage. Use anglicized versions. Have transliterations from Cyrillic or other alphabets. Your standard title search assumes one legal name per property. That assumption just cost someone $4.6 million. The sophisticated players (banks, title companies, law firms with compliance departments) faced zero consequences. The small operator who relied on them got crushed. Treasury made an example out of the least sophisticated player in the chain. The one who actually believed “clean title” meant clean title. You can do everything right and still be holding a bad title. https://lnkd.in/eSPTY6ZM