LeT was designated as a terrorist organisation by the United States in December 2001.
Since the original designation occurred, LeT has repeatedly changed its name and created front organisations in an effort to avoid sanctions, said the State Department.
"To that effect, Al-Muhammadia Students (AMS) is the student wing of LeT," it said.
Founded in 2009, AMS is a subsidiary of LeT and has worked with LeT senior leaders to organise recruiting courses and other activities for youth, it added.
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"These two Lashkar-e-Taiba leaders are responsible for raising and moving funds to support the terrorist group's operations," said John E Smith, Acting Director Office of Foreign Assets Control.
"Today's action not only aims to expose their activities, but also disrupts Lashkar-e-Taiba's financial network and ability to carry out violent terrorist attacks," he added.
Treasury said Sarwar has been a senior LeT official in Lahore for over 10 years and has held various leadership roles in the group, including his current position as LeT's emir for Lahore, a position he has held since at least January 2015.
In his capacity as LeT Lahore emir, Sarwar has been directly involved in LeT fund raising activities and uses the formal financial system in Pakistan to raise and move funds on behalf of LeT, the Treasury said.
For example, in 2008, he led delegations of businessmen to LeT facilities for the purpose of soliciting donations for the group, and as of mid-2009, Sarwar was one of two officials who headed LeT's finance wing in Lahore, it added.