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Bolivia arrests 6 in case of jailed U.S. businessman

By the CNN Wire Staff
November 28, 2012 -- Updated 0331 GMT (1131 HKT)
STORY HIGHLIGHTS
  • Among those reported arrested are a judge and various other government officials
  • They are accused of trying to extort and steal from Jacob Ostreicher
  • The American busineessman has been in prison since June 2011 without formal charges

(CNN) -- Authorities in Bolivia have arrested six government officials on suspicion of trying to extort and steal from an American businessman imprisoned there, state news reported Tuesday.

Jacob Ostreicher, a flooring contractor from Brooklyn, New York, has been held since June 2011 on suspicions of money laundering tied to a rice-growing operation. He has not been formally charged.

Among those arrested were a judge involved in Ostreicher's case and employees of a government group in charge of seized assets, according to the state-run ABI news agency, which cited Bolivian Interior Minister Carlos Romero.

Since Ostreicher's arrest, authorities have seized some 20,000 tons of rice, and the illegal sale of that rice is what landed some officials in hot water, the minister reportedly said.

The judge was alleged to have been involved in a plan to extort $50,000 from Ostreicher in return for his release from jail.

"The investigation will move forward -- fall who may -- because we cannot allow this," Romero said, according to ABI.

The events leading to Ostreicher's arrest are complex. They start with an investment that he made in 2008 in a rice operation in Santa Cruz, Bolivia. A group of investors saw opportunity in growing rice, and though Ostreicher didn't put down a lot of money, he began traveling to Bolivia to look after the project, his supporters say.

Ostreicher told CNN in a telephone interview from prison last year that he discovered that the investors had been swindled by the woman whom they had hired to run the project, who had ties with a Brazilian drug trafficker. Ostreicher fired the woman and tried to set things straight, but the ownership of the land was tied to the drug trade, and he found himself a suspect.

Prosecutors have told CNN that they are suspicious of Ostreicher because of the lengths he went to to try to recoup the investors' losses and his continued negotiations with the landowner.

His case has gotten some attention in Washington. U.S. Rep. Chris Smith, a New Jersey Republican, traveled to Bolivia in June to meet with Ostreicher in prison and accompany him to a hearing.

"Justice delayed is justice denied, and justice has been delayed for a long time. Jacob has tried to work through the legal system and has been patient beyond reasonable expectations. There simply is no evidence offered against him. The rule of law must prevail in Bolivia," Smith said in a statement.

Under Bolivian law, a suspect can be held on preliminary charges for 18 months, at which time the state has to file formal charges or release the suspect.

CNN's Mariano Castillo contributed to this report.

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