WASHINGTON – An attorney for Texas oil mogul Oscar Wyatt Jr. said Friday that a pending lawsuit accusing Wyatt of indirectly funding Hamas terrorists could have wide-ranging ramifications for the U.S. oil industry.

Wyatt, 85, who spent a year in prison for his role in an oil-for-food scandal that rocked the U.N., is now facing a lawsuit from more than 50 Israeli citizens. The Israelis claim that bribes Wyatt paid to Saddam Hussein's government make him liable for the deaths or injuries of their family members who fell victim to Hamas suicide bombings.

If "buying oil from Iraq makes you an accomplice in terrorism, then we're all in a world of hurt," said Carl Parker, Wyatt's attorney. "If my clients are stuck, then all oil companies in the United States are stuck."

The case was moved this week from U.S. District Court in Washington to Houston, where the financial transactions took place.

The case is being brought against Wyatt under the Alien Tort Claims Act of 1789, which allows foreign citizens to have their cases heard in U.S. courts.

The plaintiffs in the case are asking for $1 billion in damages from Wyatt and his company, NuCoastal Corp., claiming that Wyatt was aware that such money was used as a "financial reward and incitement program which rewarded the families of martyrs and suicide bombers in an effort to incentivize acts of terrorism."

Wyatt's troubles with the law began in 2004, when he was named by the CIA for having been awarded vouchers by the Saddam Hussein regime to secure lucrative contracts for Iraqi oil.

In 2007, the Texas businessman pleaded guilty for paying kickbacks to Hussein under the oil-for-food program, which was shut down in 2003 after revelations of collusion among oil companies, U.N. officials and the Hussein regime came to light. Wyatt spent a year in prison before being released in fall 2008.