Prosecutors allege that the US$25 million invested in the rice venture was obtained illegally. Ostreicher maintains he is innocent.
COMMENT: A Bolivian agency in charge of liquidating seized goods has said that the rice will be sold in mid-January so it doesn't go bad. The proceeds will reportedly be put in an escrow account for Ostreicher until his case has been resolved. The sale of the rice is expected to bring in more than US$1 million.
Ostreicher's attorney, Jerjes Justiniano, has characterized the sale as illegal, saying the authorities had not notified him of the plan or given him an opportunity to appeal.
There were conflicting accounts of how much rice was seized. Justiniano said the authorities had held about 18,000 metric tons (20,000 tons) — or about 5,000 metric tons (5,500 tons) more than the amount cited by officials.
Ostreicher's unusually lengthy detention has prompted US officials to intercede on his behalf with senior Bolivian officials. A Bolivian human rights groups also supports him, accusing prosecutors of violating established legal principles.
A judge in September ordered Ostreicher's release on bail, then six days later revoked that decision. His next court hearing is scheduled for next week.
Also jailed in connection with the money laundering investigation is Claudia Liliana Rodriguez, of Colombia, who had worked as the local manager in the rice-growing investment. Ostreicher and a Swiss associate, Andre Zolty, had entrusted the venture to Rodriguez, but now accuse her of stealing millions of dollars from them.
As I said in my September posting, Ostreicher failed to conduct adequate due diligence on the business venture from the very beginning; from all indications he did not seek out the assistance from the US Department of Commerce's staff at the US Embassy in La Paz or US-based legal advice before embarking on the plan. Doing so might well have prevented the predicament in which Ostreicher finds himself.
To make matters worse, bi-lateral relations between the US and Bolivia are not good, which also limits the efforts of the US Department of State to intercede on Ostreicher's behalf.
A final thought. Ostreicher never should have traveled to Bolivia without talking first to the US Department of State, US Department of Commerce and independent legal counsel experienced in Bolivian law and business practices.