Some claimed he had taken over land in Bolivia without paying for it.
But members of Bolivia's Jewish community said Ostreicher, an Orthodox Jew from Brooklyn, had been unjustly accused. Some of them held signs in Hebrew.
"He is one more Jew who is the victim of persecution," one man said. "We hope justice is done. We hope he is freed. Being free, he can defend himself. We hope that all of his property which has been seized, practically robbed, is returned to him."
Word of Ostreicher's release was posted on the "Free Jacob Ostreicher" Facebook page Tuesday.
Below a series of news reports, there were photos of crestfallen children posted last week.
"Hanukah without our grandfather - second year that we spend it without him," one caption said.