Bolivia judges balk at setting NY man free

LA PAZ, Bolivia (AP) -- A two-judge appeals panel on Tuesday refused a plea to immediately release a New York businessman who has been jailed for 18 months without charge despite strong evidence he was fleeced and extorted by corrupt prosecutors.

Instead, the two judges sent the money-laundering case of Jacob Ostreicher back to the trial judge, ordering her to reconsider favorable evidence she previously threw out at the urging of a powerful judicial official who is now under arrest.

"This is all a joke. This is literally a circus," Ostreicher, 54, told The Associated Press by phone after Tuesday's hearing, the 28th in his case. "They are talking about this investigation as if it were a real investigation. But the whole investigation is illegal."

One of his lawyers, Jerjes Justiano, said the judges "washed their hands," though empowered to throw out the case. Instead there will be another hearing, in as early as five days.

Ostreicher is weakened from a liquids-only hunger strike and was moved to a private clinic on Halloween after the actor and activist Sean Penn intervened on his behalf.

Penn accompanied Ostreicher, in a wheelchair and wearing a bullet-proof vest, in a packed courtroom in the eastern city of Santa Cruz, capital of the state where Ostreicher was trying to salvage a rice-growing venture when he was arrested in June 2011.

The evidence that the judges on Tuesday ordered the trial judge to reconsider include a Swiss report that Ostreicher says affirms the legitimacy of millions invested by his Swiss partners in the venture.

Ostreicher was never charged with any crime, and the people who led his prosecution, including the No. 1 legal adviser in the Interior Ministry, are now themselves in jail, accused of belonging to a shakedown ring that authorities say preyed on people deemed to have deep pockets.

The Orthodox Jew, who has a flooring business in Brooklyn, N.Y., complained from the start that he was being fleeced. His case had come to light after he accused the venture's original manager, a Colombian woman who is also jailed, of defrauding investors and falling in with a Brazilian drug trafficker.

Ostreicher says prosecutors and government employees illegally sold 18,000 metric tons of the venture's rice and stole equipment and demanded $50,000 to get him out of jail.

The AP drew attention to the case beginning last year and a U.S. congressman, Chris Smith of New Jersey, began this year to lobby for Ostreicher's release.

But the U.S. government has little clout with Bolivia's leftist leaders. Only after Penn interceded with President Evo Morales on Halloween eve did authorities move vigorously against the extortion ring.

Eight people, including two prosecutors, are among eight alleged members of the ring arrested in the past two weeks.

Penn was at Tuesday's hearing but did not comment.

Ostreicher said he'd been granted an eight-day extension in the private clinic.

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Frank Bajak reported from Bogota, Colombia