If the allegations are true, hopefully one of the biggest holes in the anti-money laundering banking world will be plugged. It involves the small European country of Latvia and the head of its central bank, Ilmars Rimsevics, who has been detained for allegedly soliciting a bribe of 100,000 Euros from a bank in the country. The U.S. Treasury has alleged that the country’s third largest bank, ABLV, has institutionalized money laundering on truly a global scale, including money laundering linked to financing North Korea’s nuclear weapon program.

As head of the country’s banking system, Rimsevics is accused of soliciting bribes from multiple banks in the country to look the other way when allegations of Russian or other sanctioned countries’ money flowed through the country’s banking system. With the scrutiny put on Cypress, many regulators believe that Russians transferred their banking relationships to Latvia, both for the physical proximity to Russia and the looseness of it banking regulators, particularly as overseen by the head of the central bank, Rimsevics.

Rimsevics for his part claims it is all a made-up case of going after a tough regulator, as he has pushed for greater transparency in the country’s banking sector and full U.S.-style banking audits. This has damaged certain corrupt bank’s business models, and Rimsevics claims the allegations are designed to simply forestall his reforms.

In addition to reforms to the Latvian banking sector, such as relying less on foreign account, the European Central Bank may actually sit up and take notice. The ECB does not have (or has and doesn’t use) the right to investigate claims of money laundering in banks of member states. U.S. banking regulators have long understood the connection between bribery, corruption, money laundering. and security. It will be interesting to see if the ECB and European countries are willing to become as aggressive as their U.S. counter-parts in fighting the global scourge of money laundering.