Families of American victims killed in the Hamas-led assault on Israel on October 7 have filed a civil lawsuit in a US federal court against Palestinian American billionaire Bashar Masri. The complaint accuses Masri of helping Hamas develop the tunnel infrastructure used in the attack, which killed more than 1,200 people—including 46 Americans—and resulted in the abduction of over 250 hostages.
Filed under the US Anti-Terrorism Act, the lawsuit alleges that Masri, a naturalized US citizen and prominent business figure, knowingly enabled Hamas to misuse international development funding, including American taxpayer money. According to the plaintiffs, projects such as the Gaza Industrial Estate (GIE)—originally established with US Agency for International Development support—were repurposed by Hamas to conceal tunnels that facilitated cross-border attacks on Israeli civilians.
Masri is the chairman of the Palestine Development and Investment Company (PADICO) and the CEO of Massar International. He is best known for spearheading Rawabi, the West Bank’s first planned city, and for launching the Siraj Fund, a $90 million equity fund for Palestinian startups and small businesses. Through these ventures, he has cultivated an image as a modernizer and economic bridge-builder in Palestinian society.
But the lawsuit paints a starkly different portrait. According to the complaint, Masri allowed Hamas to use the GIE as a front for its tunnel-building operations and presided over a 2022 signing ceremony with a senior Hamas official, Abdel Fattah Zrai’, to expand operations at the site. Zrai’ is alleged to be part of Hamas’ weapons production division.
The terror tunnels that played a central role in the October 7 massacre were not just rebuilt—they were powered and protected by international development projects that were hijacked by Hamas, with the cooperation of Bashar Masri
“The terror tunnels that played a central role in the October 7 massacre were not just rebuilt—they were powered and protected by international development projects that were hijacked by Hamas, with the cooperation of Bashar Masri,” said Gary M. Osen, managing partner at Osen LLC, one of four law firms representing the plaintiffs.
The lawsuit also claims that PADICO-owned properties in Gaza, such as the al-Mashal Hotel, were used by Hamas leadership for planning meetings and diplomatic engagements, including visits from foreign dignitaries. These businesses are described as “dual use” in the complaint—operating publicly as commercial venues while allegedly serving Hamas’ military and propaganda efforts behind the scenes.
Masri has not commented on the allegations in public appearances, and no criminal charges have been filed. But his office issued a statement responding to the lawsuit:
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He will seek the dismissal of these false allegations in court
“Bashar Masri is a successful and respected Palestinian American entrepreneur and business leader.
“He 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. Neither he nor those entities have ever engaged in unlawful activity or provided support for violence and militancy.
“Bashar Masri has been involved in development and humanitarian work for the past decades. 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.
“He will seek the dismissal of these false allegations in court.”
Beyond his business credentials, Masri has long been involved in broader regional economic projects. Massar International, his flagship holding company, has managed ventures in Morocco, Jordan, Egypt, and Serbia, with a focus on real estate, technology, and financial services. His vision for Rawabi—a city that has already housed thousands and generated thousands of jobs—has drawn support from US officials and some Israeli companies, despite criticism from pro-Palestinian activists for his cooperation with Israel.
Masri’s efforts to engage with both Israeli and international partners have also sparked political controversy. He has voiced support for Arab countries that have normalized relations with Israel, suggesting those ties could benefit Palestinians. At the same time, he has criticized both Israeli occupation policies and what he calls a lack of initiative from Palestinian leadership.
While Masri has never held political office, his name surfaced in diplomatic reporting early this year due to his reported advisory role to Adam Boehler, the special presidential envoy for hostage affairs appointed by President Donald Trump in December 2024. According to Israeli media, Masri advised Boehler during negotiations to secure the release of hostages held in Gaza.
Boehler made headlines in January 2025 after holding direct talks with Hamas representatives in Qatar—an extraordinary step for a US envoy. His approach quickly became controversial, particularly after a string of public interviews in which he appeared to downplay the threat posed by Hamas. In one interview, Boehler described Hamas officials as “pretty nice guys,” later insisting he had been misunderstood. In another, he referred to Israeli hostages as “prisoners” and Palestinian detainees—some of them convicted of mass murder—as “hostages.”
Pressed on his language, Boehler told CNN that his goal had been “to identify with the human elements” of the Hamas leadership. Facing mounting backlash, he issued a clarification on social media, writing in capital letters that “Hamas is a terrorist organization that has murdered thousands of innocent people. They are BY DEFINITION BAD people.”
Days later, Boehler was removed from his role in the direct negotiations, though he continued to support a parallel track led by Trump ally Steve Witkoff. In March, Boehler withdrew his formal nomination as special envoy, though the White House said he would continue assisting on hostage affairs as a special government employee.
The Palestinian American businessman’s alleged involvement with Boehler’s mediation efforts adds another layer to the lawsuit, which argues that Masri’s influence and business network provided Hamas with cover and resources. The plaintiffs say they hope the case will reveal how aid and investment programs were exploited by Hamas with help from collaborators embedded in development and commercial sectors.
Masri’s family has long played a prominent role in Palestinian and Jordanian political and economic affairs. He has been named one of Fortune magazine’s “World’s 50 Greatest Leaders” and sits on the board of Harvard University’s Kennedy School.
The lawsuit also names infrastructure projects backed by the World Bank’s International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), which allegedly provided power to Hamas’ tunnel system. Both IFC and MIGA are funded in part by the US and other donor countries.
The plaintiffs’ legal team includes Osen LLC, Willkie Farr & Gallagher LLP, Stein Mitchell Beato & Missner LLP, and Motley Rice LLC—firms known for litigating terrorism-related civil suits. They argue that Masri’s companies knowingly provided material support to Hamas, which has been designated a Foreign Terrorist Organization by the US State Department since 1997.
This is a developing story.