IMG Academy Lawsuit Over Cartel-Linked Tuition Payments

IMG Academy, the elite sports boarding school in Bradenton, Florida, paid $1.72 million to the U.S. Treasury in February 2026 to settle allegations that it accepted years of tuition payments from two parents on the federal drug kingpin sanctions list. The cartel-linked tuition settlement with the Treasury’s Office of Foreign Assets Control (OFAC) resolved 89 apparent sanctions violations and was the first OFAC enforcement action against an educational institution in two decades.¹²

What OFAC Found

Between 2018 and 2022, IMG Academy enrolled the children of two individuals designated as Specially Designated Nationals under the Foreign Narcotics Kingpin Designation Act, a federal law aimed at people who provide financial support to drug trafficking organizations.³ The names of the parents and the cartel they were tied to were not publicly disclosed.

One parent enrolled a child in January 2018 and paid up to $98,867 per year through spring 2023. A second enrolled a child in July 2020 and paid up to $102,235 a year until June 2022.⁴ All told, OFAC counted six enrollment agreements and 83 individual payment transactions as violations.⁵

Many of those payments came in through third-party wire transfers from individuals in Mexico or were charged to credit cards kept on file for the students. That structure kept the money out of the automated sanctions filters that U.S. banks run on incoming wires.³

Why the School Didn’t Catch It

The compliance failure was simple. IMG Academy never checked the names of enrolling parents against OFAC’s publicly available SDN List, and the sanctioned parents had used their real, full names on every form. Those names already matched entries on the list. OFAC said “basic screening of parents and payors against the SDN List, or conducting routine due diligence, would likely have identified the sanctions risk.”⁶

The unusual payment routing also went unquestioned. Wires from third parties in Mexico and card-on-file charges on cartel-linked accounts drew no scrutiny because the academy had no sanctions compliance program at all during the years the violations occurred.⁴ OFAC concluded that while the school may not have had “actual knowledge” that the payers were sanctioned, it had “actual knowledge of the underlying transactions” that violated federal law.³

How the $1.72 Million Was Calculated

OFAC classified the 89 violations as “non-egregious” but “not voluntarily disclosed,” meaning the school had not self-reported before the government came looking.¹ According to one account of the enforcement information, OFAC described the total absence of any screening process as “reckless disregard for U.S. sanctions requirements.”⁴

Several factors kept the penalty from climbing higher. The academy had no prior sanctions violations, cooperated with the investigation once it began, and put a formal compliance program in place after the problem surfaced.⁷ The issue reportedly came to light after IMG Academy changed hands in mid-2023, when the new chief legal officer reviewed past enrollment and payment records.⁸ That review followed Endeavor’s June 2023 sale of the academy to Hong Kong-based BPEA EQT, in partnership with Nord Anglia Education, for $1.25 billion.⁹

Why the Case Matters Beyond IMG

OFAC hadn’t taken an enforcement action against an academic institution in 20 years, and it used this one to send a message.² The agency stated flatly that “educational institutions are not exempt from sanctions regulations,” and it emphasized that sanctions run on strict liability: a school can be penalized whether or not it meant to break the law.¹⁰

Private and independent schools that recruit internationally and take tuition from families overseas had generally treated sanctions compliance as a problem for banks and exporters. The IMG Academy settlement showed that any institution accepting large payments from abroad without screening the payers is exposed to the same rules.

1
U.S. Department of the Treasury. Recent OFAC Actions
2
Gibson Dunn. Compliance Risks and University Admissions
3
Bradenton Herald. IMG Academy Fined for Accepting Tuition From Sanctioned Families
4
USA Today High School Sports. Florida High School IMG Academy Fined for Drug Cartel Tuition
5
K&L Gates. Narco-Traffickers in the Classroom and Whistleblowers at the Gate
6
CT School Law. What the IMG Academy Enforcement Action Means for Schools
7
LCW Legal. Treasury Department Reaches $1.72 Million Settlement With Private School
8
Visual Compliance. OFAC Screening Software for Schools: Lessons From a $1.7M Sanctions Case
9
Endeavor. Endeavor Completes Sale of IMG Academy
10
Mintz. Independent Schools and OFAC Enforcement