LIMA, Peru (AP) — On paper at least, growing rice in Bolivia's fertile eastern lowlands seemed like a terrific investment. The land was a bargain, the labor dirt cheap.
Jacob Ostreicher, a New York City businessman, and his Swiss partners figured they could double their $25 million investment in less than five years. And they could run it remotely.
Or so they thought. The woman they entrusted to manage the investment turned out to be a Colombian con artist who was involved, amorously and financially, with a murderous Brazilian drug trafficker, they say.
Now Ostreicher is sitting in an overcrowded, notoriously unruly Bolivian prison, while authorities have spent more than two months investigating him for money-laundering.
He is the victim, he and his associates say.
Ostreicher is backed by a local human rights group that says prosecutors have behaved suspiciously in the case, including in their apparent decision to seize and sell millions of dollars' worth of the rice.
New York police say Ostreicher has no known criminal record and U.S. diplomats, who have regularly visited him in prison, have raised his case with Bolivian ministers to express concerns about possible judicial abuses.
The prosecutor who had Ostreicher placed in preventive detention said the American had failed to prove the investors' money was obtained legally.
"At no time were his rights ever violated," Roberto Acha told The Associated Press. However, it is unclear when Ostreicher will get his next day in court.
Ostreicher, 52, and his wife, Miriam Ungar, say prosecutors never requested proof of the money's legitimacy. They suspect unscrupulous officials are trying to send them home penniless.
Ungar is at her wit's end, she said, with all the conniving she's seen. "It gives hell a good name," was her take on Bolivia, a poor, landlocked South American nation with a history of corruption.
Ostreicher, who owns a Brooklyn flooring company, said he cooperated fully with Bolivian authorities, even when they cautioned him that doing so could incriminate him.
Beyond his safety in a prison whose interior is largely ruled by its 3,200 inmates, they are worried about losing the more than 30,000 acres the investors bought and 20,000 tons of rice that authorities confiscated.
The investors' farm manager, Ronny Suarez, said the state agency in charge of seized drug assets was calling transport companies Wednesday to ask them to pick up the rice.
"They want to confiscate everything so they can make it theirs and sell it," he said.
A woman who answered the phone at the agency's local office told the AP that officials were not authorized to discuss active investigations. She would not give her name.
The venture was launched in 2008, just as U.S. relations with President Evo Morales began to seriously deteriorate.
Morales' leftist government expelled the U.S. ambassador that year, accusing him of inciting the opposition, and began moving to confiscate big farms and ranches from major landholders, including an American rancher named Ronald Larsen who authorities claimed was exploiting his workers.
Neither Ostreicher nor the principal investor, a Swiss associate named Andre Zolty, speaks Spanish or had been to Bolivia when they took the plunge, they said.
They entrusted the venture to Claudia Liliana Rodriguez, who had gained Zolty's trust years earlier when as a business student in Switzerland she did some work for him. She claimed to come from wealth, they said.
Ostreicher and Zolty say Rodriguez stole millions from them. Whenever they pressed from afar for documentation, they said, she threatened to quit.
After several trips to Bolivia to try to sort things out, with Rodriguez constantly evading him, the investors said, they finally learned the disturbing details of how she operated.
She pocketed their money while buying machinery and supplies on credit and putting land titles in her name, they said.
Meanwhile, Rodriguez planted rice on land she claimed to have purchased for the investors but that actually still belonged to a Brazilian drug trafficker named Maximiliano Dorado and his younger brother, the investors said.
Rodriguez paid for the land with a $3.5 million personal check that bounced, they said, never telling them she was getting them involved with a dangerous criminal.
"Max" Dorado had escaped in 2001 from a Brazilian prison where he was serving a 15-year sentence for drug trafficking, murder and money laundering, according to Brazilian police.
Soon after the investors learned they had rice growing on Dorado's land, he was gone. And so was Rodriguez.
Dorado was captured by police and deported to Brazil in December. Ostreicher and his wife say Rodriguez had betrayed him after a quarrel over the ranch.
When Bolivian counternarcotics police raided the ranch, Ungar said, "they asked the workers on the farm, 'Who do you work for?' And they said they worked for us."
Ostreicher, a loquacious man described by his Brooklyn rabbi friend Saul Klein as tough but good-hearted, had by then fired Rodriguez and filed civil and criminal complaints against her. The investors took out a full-page ad in the biggest newspaper in Santa Cruz, the eastern provincial capital, in March to announce the news.
Ostreicher said by phone from prison that when Bolivian prosecutors first came calling, they were courteous and friendly, even if they did keep asking him to buy them lunch.
In May, Rodriguez returned to Santa Cruz and was arrested on money-laundering charges. She was later transferred to a prison in the capital, La Paz, and the AP was unable to locate her lawyer. A secretary for the judge handling her case said she did not know the lawyer's name.
Less than a week after Rodriguez's arrest, prosecutors raided his office, hauling away computers, cell phones and hundreds of documents. On June 3, he was arrested and thrown into a cell that he said reeked of feces and urine.
Acha and another prosecutor told the judge who ordered Ostreicher jailed that Zolty, the principal investor, was being investigated by Swiss authorities for money-laundering, according to a transcript of the hearing obtained by the AP.
That claim was disputed by Swiss federal police, who confirmed on Tuesday the authenticity of a document they issued June 6 at Zolty's request. It said neither Zolty nor his firm are under police investigation.
The Santa Cruz chapter of the respected, independent Permanent Committee for Human Rights has been assisting Ostreicher. Its vice president, Carlos Cortez, is persuaded that Rodriguez "used and defrauded" them.
Miriam Ungar, meanwhile, has been running her insurance business from Santa Cruz while taking her husband all his meals, because they are Kosher and no one else at Palmasola prison shares their special religious diet.
"I have to take double of everything," Ungar said, "because the guards take half of whatever I take him."
He's not just the only observant Jew at Palmasola, Ostreicher said. He's the only American.
Rabbi Klein said local rabbis have been trying to figure out how to help Ostreicher but recognize that Washington's leverage in Bolivia is weak.
"He is a well-loved person," Klein said. "What is this? It's a horror movie."
Associated Press writers Frank Jordans in Geneva, Switzerland, Colleen Long in New York, Cesar Garcia in Bogota, Colombia, Carlos Valdez in La Paz, Bolivia, and Stan Lehman in Sao Paolo, Brazil contributed to this report.
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