Fayyad, a politically independent economist, served as prime minister from 2007 to 2013, when he resigned amid a falling out with President Mahmoud Abbas. Fayyad enjoyed strong Western support, and focused on repairing Palestinian finances and on development projects.
Fayyad currently runs the “Future for Palestine” development institute. Its funds have been frozen over the money laundering lawsuit.
Fayyad said the funds were for projects in Jerusalem and the West Bank. He denied any wrongdoing.
The Palestinian attorney general’s office confirmed the existence of the lawsuit but declined further comment.
Critics say Abbas, in power for more than a decade, is trying to sideline potential political opponents.