IMG Academy, a private boarding school and athletic training institution based in Florida, entered into a settlement with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) to resolve potential civil liability for violations of federal counternarcotics sanctions. The School agreed to pay $1.72 million after OFAC determined that, over several years, IMG Academy engaged in transactions with two individuals designated on the government’s sanctions list due to their connections to a Mexican drug cartel.
U.S. sanctions laws prohibit certain transactions with designated individuals and entities, including those identified on the government’s restricted party lists. These sanctions are administered by OFAC, which maintains the Specially Designated Nationals (SDN) List. The SDN List identifies parties with whom U.S. persons generally may not do business. These restrictions can apply even when a sanctioned individual is not directly involved in a transaction but still benefits from it, and they apply broadly to U.S. entities, including private schools.
Between 2018 and 2022, IMG Academy entered into and repeatedly renewed tuition enrollment agreements with two SDN-listed individuals for the enrollment of their children. The School accepted tuition and related payments, often routed through third-party wire transfers and credit card transactions, and applied funds across academic years. In total, OFAC identified dozens of transactions, including multiple enrollment agreements and payment activities, that constituted prohibited dealings with sanctioned individuals.
OFAC found that IMG Academy failed to conduct basic screening or due diligence that would have identified the individuals as sanctioned, despite having information that matched entries on the SDN List. At the same time, OFAC considered several mitigating factors, including the School’s lack of prior violations, its cooperation during the investigation, and its implementation of a compliance program after discovering the issue. Based on these factors, the violations were deemed non-egregious, and the matter was resolved through settlement rather than litigation.
In announcing the settlement, OFAC emphasized that academic institutions, particularly those with international students, payment sources, or partnerships, may encounter sanctions-related considerations as part of their operations. The agency encouraged schools to adopt practical, risk-based compliance measures, such as screening relevant parties and maintaining clear internal processes.
For private schools, this case serves as a helpful reminder to periodically review existing practices and ensure that appropriate safeguards are in place, particularly where there are international connections.
The Department of Treasury’s enforcement release can be found here.