Wachsman's mother and six brothers filed the lawsuit in 2006 against Iran and its ministry of information and security, saying Tehran was responsible for the death because it provided training and support to Hamas. Iran has refused to respond to the lawsuit, resulting in a default judgment in favor of Wachsman's family.
US District Judge Ricardo Urbina awarded $5 million to Wachsman's mother and $2.5 million to each brother for their emotional distress, and $5 million to Wachsman's estate for his potential lost earnings and the pain and suffering he endured for six days while he was held hostage before being executed.
The court also ruled that Iran should pay 6 percent annual interest from the date of Wachsman's murder nearly 15 years ago.
It is unclear if the family will get any of the money, said Michael Jacobson, a former senior adviser in the Treasury Department's office of terrorism and financial intelligence.
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"It's been historically pretty difficult to collect against those types of cases," said Jacobson, now a senior fellow at The Washington Institute for Near East Policy.
But he noted that the courts could seize any assets of Iranian entities in the United States to help pay a judgment.
Pleaded for life on video
Wachsman was abducted by four members of Hamas on October 9, 1994, as he waited on the side of a public street near the central Israeli city of Lod for a ride to visit a friend.
They demanded the release of the jailed Hamas leader and 200 other Muslim fundamentalist prisoners by Oct. 14, 1994, in exchange for Wachsman's life.
On video, Wachsman urged Israel to meet the kidnappers' demands. "If not, they will kill me," he said. "I ask you to do all you can so I get out of here alive."
Prime Minister Yitzhak Rabin ordered the commando unit Sayeret Matcal to raid the house in which Wachsman was held, and as they attempted to blow down heavily fortified doors with explosives, the kidnappers shot Wachsman. An Israeli soldier and all three remaining kidnappers were killed in an ensuing fire fight.
The Wachsman family details in court filings how they have struggled with his violent and public death, with his mother diagnosed with post traumatic stress disorder and on medication and one brother having attempted suicide three times in his grief.
The court found that several of the Hamas members instrumental in Wachsman's abduction and execution either received terrorist training by Iran's Revolutionary Guard or were related to those who received the training.