The settlement between the Department of Justice and the families marks the latest step in a long-running case over ties between the Manhattan building at 650 Fifth Avenue and Iran.
The skyscraper was majority owned by the Alavi Foundation, a non-profit organization that promotes Islamic culture and the Persian language. The 36-story, 382,500 square-foot building stands at the corner of Fifth Avenue and West 52nd Street, near Rockefeller Center and St. Patrick's Cathedral.
In a 2009 lawsuit, the Manhattan US Attorney's office claimed the Alavi Foundation was controlled by Iran. It also said two minority owners, Assa Corp and Assa Co Ltd, were shell companies backed by Iran's Bank Melli.