Thursday's action blocks all property of those targeted that is subject to US jurisdiction and prohibits American citizens from engaging in transactions with them.
But Treasury Secretary Steven Mnuchin was unequivocal in saying that Thursday's action by his department "counters Russia's continuing destabilising activities, ranging from interference in the 2016 election to conducting destructive cyber-attacks".
But congressional critics called the administration's action a woefully inadequate retaliation for Russian Federation interference in the 2016 US election and other actions.
Russia's military intelligence organisation, the Main Intelligence Directorate, was also sanctioned.
"In his campaign rally in Crimea today, President Putin reiterated Russia's false claims to Ukrainian territory in another open admission that the Russian government disdains the worldwide order and disrespects the territorial integrity of sovereign nations", Nauert said.
The Trump administration has denied that it colluded with the Russian group on the campaign.
The sanctions are the first use of the powers that Congress passed a year ago in retaliation for Moscow's meddling.
Russian President Vladimir Putin met Thursday with young scientists and entrepreneurs, promising to encourage new talent three days before the presidential vote he is certain to win.
US President Donald Trump signed CAATSA into law in August after Congress passed the measure in response to allegations that Russian Federation sought to influence the 2016 US presidential election. He suggested the Trump administration had timed the sanctions to come ahead of this weekend's presidential election in Russian Federation, in which President Vladimir Putin is expected to win an overwhelming victory.
Known as "Putin's chef", Prigozhin was indicted by special counsel Robert Mueller earlier this year for his involvement with the Russian troll farm.
Affected individuals include Yevgeniy Prigozhin - a businessman with close ties to President Putin, and who is said to have funded the Internet Research Agency.
According to Mueller's indictment, the IRA and its employees were responsible for a disinformation campaign on various social media sites in the lead-up to the election, as well as organizing real-world protests and activists in an attempt to sway public opinion in the US.
Today's announcement is in contrast to President Trump's reluctance to blame the Kremlin for its interference in the 2016 presidential election.
"Today's action, using authorities provided by Congress, is an important step by the administration".
But there's more we didn't know...
Brian O'Toole, a senior fellow at the Atlantic Council think tank and a former senior adviser at the Treasury Department's Office of Foreign Assets Control echoed that sentiment. But it could help inoculate the president from persistent claims he's afraid or unwilling to stand up to Russian President Vladimir Putin or to fight back against efforts to undermine America's democracy and domestic affairs.
The United States and two major European allies on Thursday formally backed Britain's claims that Russian Federation likely was responsible for a chemical toxin attack against a former spy living in England, calling it the "first offensive use of a nerve agent" in Europe since World War II.
Trump has only reluctantly acknowledged Russian interference, saying it could have been other countries or individuals as well.
UK Prime Minister Theresa May had given Russian Federation a deadline of midnight Tuesday to explain how the chemical attack occurred.
On Thursday, the leaders of France, Germany and the USA stated, "We share the United Kingdom assessment that there is no plausible alternative explanation, and note that Russia's failure to address the legitimate request by the United Kingdom government further underlines its responsibility".
However, Senate Democratic leader Chuck Schumer criticised a lack of retaliation.
Officials from multiple US agencies discussed next steps at a meeting on Thursday, with one aim being to avoid personally attacking Putin and taking in-your-face steps that could prompt retaliation.