Failure to Screen Parents Costs Florida School $1.7M

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has reached a $1,720,000 settlement with IMG Academy, LLC to resolve potential civil liability for 89 apparent violations of U.S. counternarcotics sanctions involving two Specially Designated Nationals (SDNs) linked to a sanctioned Mexican drug trafficking organization. 

Between 2019 and 2025, the Florida-based boarding school and athletic training institution entered into annual tuition enrollment agreements with the SDNs and processed tuition and related payments connected to their children’s attendance, conduct OFAC determined constituted prohibited dealings in blocked property under the Foreign Narcotics Kingpin Sanctions Regulations. 

OFAC concluded the case was non-egregious and not voluntarily self-disclosed, setting the base penalty at the settlement amount. The agency found that “IMG Academy demonstrated reckless disregard for U.S. sanctions requirements…including by failing to conduct sanctions screening checks on its counterparties,” noting that basic due diligence would have revealed the customers’ SDN status and prevented repeated violations over several years. 

Aggravating Factors

OFAC identified several aggravating considerations:

• Reckless disregard for sanctions compliance, including failure to screen counterparties whose names matched SDN List entries.

• Direct knowledge of the underlying transactions, including invoicing and communications with the sanctioned individuals.

• Facilitation of access by cartel-linked SDNs to U.S. commerce, financial channels, and elite educational and athletic services for their children. 

Mitigating Factors

Mitigating considerations included:

• No OFAC penalty or violation finding during the preceding five years.

• Prompt remedial action and implementation of a risk-based sanctions compliance program following a 2023 ownership change and legal leadership review.

• Substantial cooperation with OFAC, including timely responses and agreement to toll the statute of limitations. 

Institutional Profile

IMG Academy, headquartered in Bradenton, Florida, provides academic education and elite sports training to domestic and international student-athletes through boarding programs, professional training, camps, online coaching, and recruiting services, drawing students from multiple global recruiting hubs. 

Compliance Significance

OFAC emphasized that sanctions exposure extends beyond traditional financial or trade sectors. Academic institutions with international students, third-party payors, or foreign relationships must implement effective screening, risk assessment, and compliance controls to prevent sanctioned persons from accessing U.S. services or the financial system. 

Practitioner Notes:   

"Independent Schools and OFAC Enforcement — How to Protect Your Institution and Avoid Becoming the Next Headline"  / Mintz 

https://www.fisherphillips.com/en/insights/insights/are-you-screening-for-sanctions-compliance.  / Fisher Phillips