August Hanning, the former head of Germany’s federal intelligence service (BND), was arrested on Tuesday on suspicion of espionage and treason, authorities confirmed. The 80-year-old is alleged to have sold classified information to a foreign power, a case that has drawn significant attention given his previous senior role in German intelligence.

According to investigators, Mr. Hanning obtained sensitive documents through Manfred Dankesreiter, a former BND chief of staff who remained with the agency after Hanning’s retirement. The exact nature of the information allegedly passed on has not been disclosed.

Reports indicate that Mr. Hanning had been facing substantial financial challenges prior to his arrest. These difficulties arose following the insolvency of PNB Banka, a Latvian bank where he served on the supervisory board. Alongside Anders Fogh Rasmussen, the former NATO secretary-general who also held a board position, Mr. Hanning was held responsible for oversight failures connected to the bank’s collapse.

In 2021, the insolvency administrator for PNB Banka sought nearly €32 million in damages from Mr. Hanning and eight other individuals involved. Investigations surrounding the bank’s failure have raised questions about potential mismanagement and irregularities, although no formal findings of wrongdoing have been publicly finalized.

As a consequence of the financial fallout, two-thirds of Mr. Hanning’s pension were reportedly seized. In early 2022, he reached out to Olaf Scholz, who was then the German chancellor, requesting assistance. In a letter dated February 6, 2022, Hanning urged Scholz to address Krišjānis Kariņš, Latvia’s prime minister at the time, during a diplomatic visit. He called for an independent investigation into the bank’s insolvency and accused Latvian authorities of corruption and impeding inquiries into the matter. No independent investigation has been confirmed to have taken place following this appeal.

On PNB Banka’s supervisory board, Mr. Hanning was responsible for compliance issues and received a monthly remuneration of €12,000 for his role. His arrest was carried out at his home in Steinfurt county, near Germany’s border with the Netherlands, and he is currently in custody as the investigation into his alleged espionage activities continues.