Families of victims of the Hamas-led terrorist attack on Oct. 7, 2023, sued a prominent Palestinian American businessman on Monday, accusing him of supporting Hamas by developing properties that were crucial to the terrorist group’s operations.
According to the lawsuit, Bashar Masri, a wealthy developer, operated hotels and an industrial site in Gaza to “construct and conceal” a labyrinthine network of tunnels that allowed Hamas to “store and launch its rockets at Israel.”
“The properties defendants developed with Hamas were not only part of the infrastructure Hamas used in connection with the Oct. 7 attack itself,” the lawsuit added. “Their development deliberately advanced Hamas’s false narrative that it was interested primarily in the economic development of Gaza and a grudging coexistence with Israel.”
The lawsuit was filed in Federal District Court in Washington, where Mr. Masri has a home. It does not say that Mr. Masri and the companies he controls knew about the attack in advance but does assert that they were aware of the Hamas military infrastructure at their properties.
Mr. Masri, a respected entrepreneur, denied the allegations.
Mr. Masri “was shocked to learn through the media that a baseless complaint was filed today referring to false allegations against him and certain businesses he is associated with,” a statement from his office said. “Neither he nor those entities have ever engaged in unlawful activity or provided support for violence and militancy.”
The complaint comes at a politically sensitive time for Mr. Masri, who has been linked to the hostage envoy for the Trump administration who has been involved in efforts to free the remaining captives being held by Hamas in Gaza. Mr. Masri is expected to play a role in the reconstruction of Gaza.
President Trump has taken a hard line with Hamas, saying there will be “hell to pay” if the organization, designated as a terrorist group in the United States, does not release all of its remaining hostages, which includes an American-Israeli.
On Oct. 7, Hamas terrorists breached Israel’s border, took control of major roadways and invaded neighborhoods and kibbutzim, in the deadliest day for Jews since the Holocaust. The devastating assault on southern Israel left about 1,200 dead and hundreds more hostage.
The lawsuit names his businesses — Palestine Development & Investment Company, Palestine Real Estate Investment Company and Palestinian Industrial Estate Development Company — as defendants.
The lawsuit was filed on behalf of about 200 plaintiffs, including Eyal Waldman, a former business partner of Mr. Masri whose youngest daughter was killed in the Nova music festival. An Israeli billionaire, Mr. Waldman is a peace activist. The family of Hersh Goldberg-Polin, the Israeli American who was taken hostage and later killed, also joined the lawsuit, as did Yechiel Leiter, the Israeli ambassador to the United States.
Mr. Masri is a well-known real estate developer in the Middle East, conceiving of ambitious projects like Rawabi, the West Bank’s first planned city. The development has received $5 million from the U.S. Agency for International Development. According to a 2019 interview with “60 Minutes,” Mr. Masri took park in the first intifada, or uprising, which began in 1987, but later supported the Oslo Accords.
His statement pointed to his years of humanitarian work and said he would seek the dismissal of the lawsuit: “His continued efforts to promote regional peace and stability have been widely recognized by the United States and all concerned parties in the region. He unequivocally opposes violence of any kind.”
According to the lawsuit, Mr. Masri made major financial investments in Gaza that benefited Hamas through the companies he controls.
Before Oct. 7, 2023, businesses and organizations investing in major projects in Gaza were most likely forced to cooperate with the Hamas authorities to facilitate their work. Hamas’s government ruled the enclave with an iron fist and wanted to keep a close eye on businesses whose headquarters were based outside the territory.
Hamas’s military wing spent years building a vast network of tunnels running under homes, hospitals and schools. Businesspeople from outside Gaza regularly struggled with whether to invest in a territory run by a militant group.
The lawsuit says that Mr. Masri developed and operated three properties that played a role on Oct. 7. One was an industrial park near Kibbutz Nahal Oz, an Israeli border community a few hundred yards from Gaza that was overrun by Hamas terrorists. The industrial park — known as the Gaza Industrial Estate — was developed with funding from the U.S. Agency for International Development. Mr. Trump has moved to dismantle the aid agency in all but name.
Among the allegations in the lawsuit: The industrial park had an “elaborate subterranean attack tunnel network” and “siphoned off electricity from their World Bank-funded solar project” to power the subterranean fortifications. It was later destroyed by Israeli forces.
The lawsuit claims that a new solar project in 2022 masked tunnel excavations while an anti-tank battery was installed on a water tower near the entrance of the industrial park.
The other two properties in Gaza were the adjacent Blue Beach Resort and Ayan Hotel, both of which were badly damaged after Oct. 7. In 2014, Israel accused Hamas of firing rockets from the Ayan Hotel.
The lawsuit, citing the Israeli Army, said that Hamas was using the Ayan Hotel and that its soldiers found tunnel shafts and weapons. The lawsuit said a Hamas tunnel network ran under the hotels, accessible from guest rooms and other facilities.
The Blue Beach Resort, the lawsuit said, had a tunnel complex that connected to a Hamas training base, where it trained naval commandoes. In January 2024, the Israel Defense Forces said Hamas “exploited the hotel as a shelter from where they planned and executed attacks both above and below ground.”
The lawsuit seeks compensatory damages under the Anti-Terrorism Act. It was filed by a group of lawyers, led by Gary M. Osen, who once represented Nazi victims, and Lee Wolosky, who in the Obama administration served as the State Department’s special envoy for negotiating the transfers of detainees from the prison at Guantánamo Bay, Cuba.
“This lawsuit results from a year of investigation that revealed a mountain of evidence about how the defendants’ properties are riddled with Hamas terror infrastructure, including attack tunnels and rocket-launching facilities in, under and next to their properties,” Mr. Wolosky said.
Last year, the men sued Iran on behalf of Oct. 7 victims, accusing the country of supporting the attack.
