TRADE ALERT – SANCTIONS VIOLATIONS SETTLEMENT
HEADLINE	Florida Athletic Prep School Settles with OFAC for $1.7 Million Related to Apparent Violations of Counternarcotics Sanctions
DATE	February 17, 2026
AGENCY	Department of Treasury, Office of Foreign Assets Control
ENFORCEMENT RELEASE	February 12, 2026
BACKGROUND	OFAC maintains sanctions against certain countries, industries, entities, and individuals. These sanctions may be comprehensive or targeted, such as specified entities and individuals listed on the SDN List. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons. Failure to comply with U.S. sanctions regulations may result in substantial penalties, including fines and imprisonment.   The Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1901 et seq.) (“Kingpin Act”) is administered by the U.S. Department of Treasury, Office of Foreign Assets Control (“OFAC”). It includes authority to designate foreign nationals as “Specially Designated Nationals and Blocked Persons” (“SDNs”). U.S. persons are prohibited from directly or indirectly dealing with SDNs, and must block and report to OFAC any SDN property in their possession.
DETAILS	On February 12, 2026, IMG Academy, an athletic preparatory boarding school based in Florida, agreed to pay $1.7 million to settle potential civil liability for apparent violations of the Kingpin Act after it allegedly received and processed tuition and related payments from two SDNs for the enrollment and attendance of their children at the school.   The school’s failure to conduct denied party screening of students and payments allegedly led to prohibited conduct. IMG Academy had signed tuition enrollment agreements with parents of the student-athletes, which obligated the parent to be unconditionally responsible for payment of their respective child’s accounts. Payments made by the sanctioned parents, which should have been blocked, ranged between $47,026 for half a semester and $102,235 for the full academic year. The lack of a screening program was “reckless,” according to OFAC.   Indirect dealings with the SDNs are prohibited. The two SDN parents mostly paid IMG Academy through third-party wire transfers and credit card payments. IMG Academy received wire transfers from non-designated third parties and entities, primarily located in Mexico, into IMG Academy’s bank account at a U.S. financial institution.   IMG Academy did not benefit from a voluntary disclosure because it did not inform OFAC of the apparent violations prior to OFAC’s initiation of an investigation into the payments.   U.S.-based academic institutions (at any level) must comply with U.S. sanctions. International touchpoints, such as international students, staff, and cross-border research, all create opportunities for impermissible dealings with sanctioned actors, even for entities operating largely domestically. Along with traditional sector and geographic location concerns, educational institutions should also consider the following risk factors in structuring their compliance programs: • Payment arrangements that may involve sanctioned persons, including for tuition and other fees; • Collaboration with blocked foreign institutions or those located in sanctioned jurisdictions; • Engaging in international investment, research, and commercial ventures; and • International campuses and exchange programs involving sanctioned persons or locations. A strong compliance program will involve screening of students, parties to payment agreements, and any other payors against denied party lists. Additionally, management/staff must be trained to be aware of sanctions programs and how to identify risks. Educational institutions should also consider regular independent testing and auditing to ensure effective controls.
BASIS	Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1901 et seq.)
Type of Sanction	Blocking sanctions (SDN)
COUNTRY	All
CITE	Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and IMG Academy, LLC | Office of Foreign Assets Control

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