Details released by the Israel Security Agency said Maher Abu Jabah, 41 ,who imports and markets iron in the Gaza Strip and has a permit to enter Israel, was arrested Sept. 6 at one of the Gaza border crossings.
Abu Jabah admitted during questioning he transferred large sums of money to Hamas and sold large quantities of iron to the Hamas military wing to construct tunnels, bunkers and military posts, Shin Bet said.
Israel restricts the amount of construction material entering Gaza, fearing Hamas will use it to strengthen its military capabilities.
Abu Jabah allegedly told investigators due to the difficulty Hamas encountered in receiving funds, his business was used as a front to transfer millions of dollars in cash to the group.
One of the methods used by the Hamas leadership abroad, was to transfer millions of dollars to Abu Jabah's family in Egypt supposedly for the business. Abu Jabah would then hand over cash to Hamas representatives in Gaza.
Abu Jabah told investigators since Egyptian President Mohammed Morsi took office, Hamas has been able to transfer funds to Gaza far more easily.
Hamas officials traveling to Egypt return to Gaza via the Rafah border crossing, carrying suitcases packed with cash, Abu Jabah said.
Abu Jabah was indicted Sept. 30 in Beersheba, Shin Bet said.