U.S. Person-1 OFAC Settlement: $1.4M (2026)

In 1987, while living in Iran, U.S. Person-1 co-founded Iranian Company-1, an Iranian software solutions company. After Iranian Company-1 became a publicly listed company in Iran in 2011, U.S. Person-1 co-founded Iranian Company-2, an Iran-incorporated holding company, to maintain U.S. Person-1's ownership interest in Iranian Company-1. As of 2026, Iranian Company-1 has grown to become one of Iran's leading software solutions companies, providing financial, administrative, human resources, logistics, and management software for critical industries in the Iranian economy, including the petrochemical, pharmaceutical, construction, and agricultural sectors, as well as government agencies, universities, research centers, and state-owned enterprises.

Over many years, U.S. Person-1 maintained their connections to the companies. Between July 10, 2019 and October 23, 2020, U.S. Person-1 provided management consulting and advisory services to Iranian Company-1 or Iranian Company-2 by actively participating in 19 virtual meetings with senior Iranian Company-1 or Iranian Company-2 personnel to discuss company matters. Participants in these meetings, including U.S. Person-1, discussed corporate transactions, asset management, sales, marketing, accounting, human resources, corporate governance, and overall company strategy. For some of the meetings, U.S. Person-1 drafted the agenda. The other participants in the meetings included Iranian Company-1 directors and officers, including the Chief Executive Officer of Iranian Company-1 who co-founded Iranian Company-1 with U.S. Person-1, the Chairman of Iranian Company-1's Board of Directors, and an Iranian Company-1 employee who served as Secretary of the Board of Directors. During these meetings, U.S. Person-1 provided substantive advice, analysis, and information.

Separately, between June 26, 2019 and August 28, 2020, on 16 occasions, U.S. Person-1 arranged for their Iranian-origin dividend payments from Iranian Company-1 or Iranian Company-2 to be deposited into U.S. financial institutions via wire transfers. These wire transfers, which transited through banks in third countries such as Türkiye, the United Arab Emirates, and Singapore, were ultimately paid into U.S.-based bank accounts held in U.S. Person-1's name. In total, U.S. Person-1 received $713,615 in dividend payments.

Additionally, in or after 2021, U.S. Person-1 purchased four real estate properties in Iran for the benefit of relatives residing there with the proceeds of other dividend payments. U.S. Person-1 later abandoned their ownership interest in Iranian Company-1 or Iranian Company-2 in 2022.

Throughout the relevant time period, U.S. Person-1 was aware of U.S. sanctions on Iran. In 2000, while serving as an executive at Iranian Company-1 in Iran, U.S. Person-1 co-authored an article in a leading newspaper about Iran's digital revolution and the challenges of the Iran sanctions program to Iran's information technology sector.

U.S. Person-1 received an administrative subpoena from OFAC in January 2025. U.S. Person-1's response was initially incomplete. In July 2025, OFAC issued a second administrative subpoena to U.S. Person-1, citing deficient responses to the first administrative subpoena. U.S. Person-1 subsequently provided a complete response.

In engaging in the conduct described above, U.S. Person-1: (1) provided management consulting and advisory services to Iran on 19 occasions; (2) caused U.S. financial institutions to indirectly export financial services to Iran by processing Iranian-origin dividends on 16 occasions; and (3) purchased real property in Iran with the Iranian-origin dividends on four occasions, in apparent violation of sections 560.203, 560.204, and 560.207 of the Iranian Transactions and Sanctions Regulations (ITSR) (the "Apparent Violations"), respectively.

OFAC determined that U.S. Person-1 did not voluntarily self-disclose the Apparent Violations and that the Apparent Violations constitute an egregious case. Accordingly, under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, Appendix A, the base civil monetary penalty applicable in this matter equals the applicable schedule amount, which is $14,730,300. The settlement amount of $1,427,230 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

This case highlights that OFAC's prohibitions apply to all U.S. persons, including U.S. Lawful Permanent Residents. As is the case in most OFAC sanctions programs, OFAC's Iran sanctions program defines a U.S. person to include any U.S. citizen or permanent resident, wherever located. Upon moving to the United States, U.S. Person-1 became subject to the same compliance obligations as other U.S. persons.

Additionally, this case also highlights the risks associated with maintaining business relationships with persons in Iran. OFAC's prohibitions on Iran are broad and generally bar any direct or indirect dealings, including the provision or receipt of personal services. Unless licensed by OFAC, U.S. persons that help manage the affairs of a commercial entity in Iran or other jurisdiction subject to sanctions are almost certain to violate sanctions.

Finally, this case illustrates the importance of cooperating promptly and fully with OFAC's investigations. As part of its analysis under the General Factors, OFAC considers the nature and extent of a subject's cooperation when considering how to resolve an investigation and the size of any potential penalty or settlement. Timely and fulsome cooperation demonstrates that an investigative subject understands the seriousness of their sanctions compliance obligations. It also saves OFAC critical time and resources by allowing the office to complete its investigation efficiently. Failure to cooperate in a manner that is complete and satisfactory not only risks foregoing mitigation credit for cooperation, but can also risk standalone penalties under OFAC's Reporting, Procedures and Penalties Regulations.

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