The same trust, the same nephew, a different counterparty — and this time the firm asked a legal question, got an answer, and never told counsel enough to make the answer right.
The same network as GVA Capital
This is the GVA Capital case’s structure, caught a second time. Definition Services, Inc., a British Virgin Islands entity, committed $50 million to IPI’s data centre fund in 2017 and 2018. Definition was introduced to IPI by a banker identified as Suleiman Kerimov’s representative, then by Kerimov’s nephew Nariman Gadzhiev — the same Gadzhiev GVA Capital used as Kerimov’s proxy — and finally by an in-person meeting with Kerimov himself at his estate in Nice. Definition is owned by Heritage Trust, the same Delaware vehicle OFAC later found held over $1.3 billion of Kerimov’s US-based assets.
What IPI did after the designation
OFAC designated Kerimov in April 2018. IPI asked outside counsel whether Definition’s account needed to be blocked. Counsel reviewed the trust’s governance documents and concluded no — Kerimov did not formally own 50 percent or more of Definition, so the 50 percent rule did not require blocking the account.
What counsel was not told: that the introducing banker had been described to IPI’s investment committee as Kerimov’s “gatekeeper,” that the IPI staff member who secured Definition’s commitments had done so by meeting in person with Gadzhiev and with Kerimov, and that IPI understood Kerimov to be the original source of Heritage Trust’s funds. IPI also collected a written attestation from Definition denying any connection to a sanctioned person, despite having reason to know that attestation was inaccurate.
Relying on the incomplete opinion, IPI continued dealing with Definition — 18 capital calls, 20 profit distributions and 13 management fee payments — from April 2018 to June 2022.
The penalty
Not voluntarily self-disclosed, which OFAC treats as a serious aggravating factor: the base penalty of $14.4 million was reduced to $11.5 million only after IPI retained new counsel, waived privilege over the original legal advice, and substantially improved its cooperation following OFAC’s pre-penalty notice.
OFAC’s compliance guidance draws the general lesson directly: legal advice is only as good as the facts it is given, and “for any advice to be effective, it must be based upon a complete picture of all material information available from across an organization.”
What the record shows
- A concealment structure can survive a real compliance check. IPI did ask the right question. The structure worked anyway, because IPI supplied counsel an incomplete factual record.
- The same trust reached two counterparties. Heritage Trust and Gadzhiev’s introductions were not a one-time arrangement; they were infrastructure, reused after designation to reach a second US investment manager. See nominee directors and shell company layering.