London
His sidekick sat the owner of Norvik bank down, scribbling the sum on a piece of paper: $125,000 a month.
An international complaint filed by Latvian bank Norvik alleges that a “Senior Latvian Official” repeatedly sought “to extort monetary bribes” and retaliated against the bank when its owners refused to pay up.
The 39-page claim, filed before a World Bank arbitration body, did not name the Latvian official. However, Norvik bank officials told The Associated Press that person is Ilmars Rimsevics.
Rimsevics, the country’s top banking official and a key member of the European Central Bank, was detained on Saturday amid swirling accusations of bribery and money laundering schemes in Latvia that reach back to Russia.
He was released on bail on Monday, and said he “rejects everything” about the allegations, Latvian state TV reported. The country’s anti-corruption agency said it suspects Rimsevics of “seeking a large-scale bribe” and has started a criminal investigation.
The high-stakes drama unfolded on Saturday, when Rimsevics was detained upon arriving for questioning at the office of Latvia’s anti-corruption agency, and was interviewed for eight hours into the night, his lawyer told state TV. His office and a property were raided, the channel said.
The looming criminal charges against the man who has overseen the country’s banking sector since 1992, in the wake of the Soviet collapse, has plunged the small Baltic nation into turmoil.
Rimsevics’ detention is particularly sensitive as he sits on the top policy making council of the ECB, Europe’s most powerful financial institution, and is privy to the state secrets of Latvia, NATO and the European Union.
Any connections to money laundering would raise concerns of the risk of blackmail from Russia’s secret services or organized crime, and come at a time when Latvian security services warn that Russia is actively trying to obtain state secrets from Latvian state officials to weaken the United States and the European Union.
Latvia, a Baltic state of only 2 million people on the eastern fringes of the EU, is trying to cope with the latest development in a history of banking scandals.
The president called a meeting of the National Security Council. The finance minister said Rimsevics should step down from his position for the good of the country while the investigation proceeds, but noted that lawmakers do not have authority to remove him since the central bank is politically independent.
The Bank of Latvia and the ECB declined to comment on Rimsevics’ arrest.
Latvia has become infamous for money laundering since the high-profile Magnitsky scandal, in which $230 million in Russian taxpayers’ money was siphoned off, largely through Latvian banks, according to U.S. and European authorities.
Whistleblower Sergei Magnitsky was imprisoned in Russia in 2008 and allegedly beaten and denied medical care, leading to his death. The U.S. and EU sanctioned Russian individuals over the case.
In 2014, a trove of leaked documents, the so-called Laundromat reports by the Organized Crime and Corruption Reporting Project, detailed how $20 billion were sent from Russia, largely through Latvia, in 2010-14. Latvian banks then went through an independent audit last year, after which Latvian regulators levied fines against three banks for a total of 640,000 euros.
Barely one week later, France fined Latvian bank Rietumu 80 million euros for money laundering. Major global banks, meanwhile, have stopped making dollar transactions with Latvian banks after the Laundromat’s leaked documents illustrated how dirty money had reached firms like Deutsche Bank by way of Latvian banks.
Last week, the U.S. Treasury singled out one of Latvia’s biggest banks, ABLV, for having “institutionalized money laundering” and the ECB on Monday blocked ABLV from making any payments amid concerns about its finances.