IMG Academy Fined Over £1.2M After State Finds Cartel-Linked Payments

An over £1.2 million fine was imposed on Bradenton's IMG Academy after discovering that the prestigious sports boarding school accepted tuition and other payments from individuals associated with Mexican drug cartels.

The Florida Commission for Independent Education (FCIE) sanction follows a lengthy investigation into the academy's financial review process for international students, which state authorities claim failed to identify suspicious funding sources connected to organised crime.

From Tuitions to Cartel Operations?

Suncoast reports that IMG allegedly accepted tuition and other fees payments from parents who are listed on sanctions for providing financial support to a 'Mexican Drug Trafficking Organisation and/or to its principal leader.'

FCIE, however, did not disclose the names of the students nor the parents in the release. According to the order, the tuition payments were between £72,288.97 ($97,867) to £75,515.37 ($102,235) per academic year.

The acceptance of 89 total payments, which included wire transfers from third-party individuals in Mexico, was in violation of the Foreign Narcotics Kingpin Sanctions Regulations, according to the release.

While IMG Academy continues to cooperate with authorities during the investigation, regulators concluded that the institution's policies did not go far enough and were insufficient in scrutinising high-risk payments, especially those coming from areas recognised for money-laundering risks.

How Payments Were Identified As Cartel-Linked

Investigators received tips about unusual payment patterns involving students with ties to organised crime figures, which then prompted authorities to examine IMG Academy's financial records.

The inquiry included subpoenas for bank records, staff interviews, and data analysis of payment trails that linked to sources allegedly connected to Mexican drug trafficking organisations.

Documents released by the state indicate that some parents used intermediaries to transfer money for tuition, room and board, and other fees – all of which raised red flags to the investigators during review. Regulators also observed that insufficient proactive due diligence by the academy allowed the said transactions to happen without proper oversight.

Authorities emphasised that tracing cartel-related funds proves to be challenging when payments are routed through multiple accounts and third-party channels – practices commonly linked with money laundering.

IMG Academy's Response And Compliance Efforts

In response to the release, IMG Academy provided a statement to the Bradenton Herald, which said that it disclosed the issue to the Office of Foreign Assets Control (OFAC) when the institution became aware of the situation, and they have since implemented additional screening measures.

The Miami Herald reports that, according to the academy's statement, the school 'is committed to maintaining the highest standards of compliance and integrity in all aspects of our operations.'

They furthered that there was no OFAC sanctions compliance program in place in IMG Academy, which is why they unknowingly accepted payments from individuals who were on OFAC's SDN List.

A spokesperson for the agency assured that they have since implemented enhanced due diligence procedures to effectively monitor financial transactions and recognise high-risk payment origins, and ensure future compliance with state laws.

The academy also highlighted its longstanding history of welcoming international students and asserted that there was no proof its administration was aware of any alleged cartel ties before the investigation.

State Regulators Stress Importance Of Vetting Protocols

According to OFAC, IMG Academy's conduct resulted in allowing children of the designated DTO's (Drug Trafficking Organisations) leaders to obtain elite academic and athletic training services in the US.

This also allowed the organisation to conduct commerce with US persons and gain access to the country's financial systems.

FCIE officials reiterated that the fine against IMG Academy sends a strong message to educational institutions regarding the importance of strict anti-money-laundering compliance and financial monitoring, particularly as schools recruit and accept international students who may pay tuition from overseas.

Regulators also stressed that private schools need to implement stronger processes to prevent potential exploitation by criminal organisations.

'This case highlights the pervasiveness of sanctions risk across a wide variety of sectors and institutions,' OFAC said. 'Even for entities operating largely domestically, the presence of international touchpoints creates opportunities for impermissible dealings with sanctioned actors, inadvertently or otherwise.'