The case of an American jailed in Bolivia without trial for more than a year is gaining increased attention from human-rights groups and members of the U.S. Congress, adding to frictions between the U.S. and Bolivia over the country's antidrug efforts.

On Wednesday, the case of Jacob Ostreicher, a Brooklyn native jailed on money-laundering charges in Bolivia, is due to be taken up by a House subcommittee that is chaired by Rep. Chris Smith, a New Jersey Republican.

holding Mr. Ostreicher for political reasons. "Mr. Ostreicher is being investigated for presumed crimes of money laundering and links to people involved in drug trafficking," said Fernando Rivera, the lead prosecutor in the case.

The case comes as Bolivian President Evo Morales's government is scrambling to defend itself against allegations that it protects drug traffickers.

Concerns about Bolivia's role in the international cocaine trade have risen in recent months. A U.N. study released in June showed the cultivation of coca, the raw material in cocaine, has risen more than 20% since Mr. Morales took office in 2006, and Brazilian federal police report a rise in drug trafficking to Brazil from Bolivia.

Brazil recently granted asylum to a leading Bolivian opposition senator, who claimed to be the victim of death threats and trumped-up criminal investigations after denouncing on the Senate floor what he said were Bolivian government links to drug traffickers.

The Bolivian government denies any connection to traffickers, saying it has intercepted a record number of drug shipments to Brazil this year and destroyed hundreds of drug labs.

The Bolivian government is accusing Mr. Ostreicher of laundering money for an alleged Brazilian kingpin, Maximiliano Dorado, who lived in Bolivia for eight years before his 2010 extradition to Brazil, where he is in jail awaiting trial on drug charges.

Mr. Ostreicher said he came to Bolivia on August 2010 to check into reports that the company that he co-owns, Coliagro SA, a Bolivian agriculture venture that produces mainly rice and soy, had been swindled in land deals by its local administrator.

Bolivian police arrested the administrator in April 2011 based on Mr. Ostreicher's complaints, and she is now in a Bolivian jail awaiting trial on charges of "illicit enrichment." She has pleaded innocent.

One of the administrator's deals was a land purchase from Mr. Dorado. Bolivian prosecutors viewed the link as evidence against Mr. Ostreicher and arrested him. Attempts to contact three lawyers in Brazil who were named in court documents as recently as 2011 as representing Mr. Dorado were unsuccessful.

Mr. Smith, the congressman, said he witnessed a June 11 bail hearing in Bolivia in which the prosecutor, Mr. Rivera, threatened to penalize the presiding judge if the hearing was held. The judge backed down and suspended the hearing, the 22nd time in which a bail hearing has been postponed since Mr. Ostreicher's arrest more than a year ago, his defense lawyers say.

Mr. Smith said he was "shocked by how a clearly innocent man was being sent back to jail by a judge who was clearly intimidated."

Mr. Rivera has said the government needs time to compile its case and that Mr. Ostreicher is considered a flight risk.

Bolivia's leader, who headed the nation's powerful coca-growing union, took office in 2006 vowing to ease regulations on coca planting, legal in Bolivia as part of the country's cultural heritage, while cracking down on traffickers who turn the leaves into cocaine under a policy called "Coca yes, Cocaine, no."

The Bolivian government has had an increasingly fraught relationship with the U.S. government over drug policy.

Mr. Morales expelled U.S. antidrug agencies from Bolivia in 2008 after accusing them of interfering in Bolivia's political affairs. Relations sank further after Gen. Sanabria was sentenced.

Mr. Ostreicher, 53, recently declared himself on hunger strike. His lawyers say he has lost about 44 pounds and his health is failing. Doctors who examined him last week recommended his immediate transfer to a hospital. He says that prison officials have refused to move him, his lawyers say.

—Matthew Cowley in São Paulo contributed to this article.

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