The Russian tycoon Leonid Rozhetskin was last seen alive in the pretty seaside town of Jurmala, on the Baltic coast of Latvia. That was five years ago. Detectives found ominous clues inside his villa, including blood on the floor, but no body.

Then last summer police discovered human remains 25 miles away in a forest. Inside a pocket was Rozhetskin’s credit card. So far officials have been unable to say for sure that the corpse is that of the missing multi-millionaire.

The Guradian writes that the presumed murder is a vivid example of how Latvia – a small Baltic nation of 2 million people on the doorstep of Russia – has become a playground for Russian interests: business, political and, above all, criminal. Or often, as in the Rozhetskin case, all three. Like many rich Russians he had numerous enemies. The Guardian has even been told the name of the hitman who allegedly killed him.

Another version suggests Rozhetskin faked his own death, and is alive and well in the US living under a false name. Either way his house, next to Jurmala’s cemetery, was eerily empty last week. There was no sign its owner will return any time soon.

The Guardian reminds that two decades after Latvia declared independence from the Soviet Union, joining the EU and Nato in 2004, Russian influence is growing again.

It is most visible in Jurmala, the picturesque resort of pine forests and wooden dachas from where Rozhetskin is thought to have disappeared. Every summer Russia’s fashionable super-rich gather here for the New Wave pop festival. They meet, socialise and party. A table in the VIP lounge of the town’s concert hall costs £25,000. It is joked that their combined wealth exceeds Latvia’s budget.

The guests are a who’s who of Vladimir Putin’s Russia – oligarchs, Duma MPs, crooners and spies. According to Leonid Jakobson, an investigative journalist based in the capital, Riga, Jurmala also attracts another clientele: the Russian mafia.

“Jurmala isn’t really a music festival. You don’t need to go to Latvia to listen to Russian pop stars. You can do that in Russia,” Jakobson said. “In reality Jurmala is an important moment. The Russian mafia and Russian government are together in one place. They discuss common problems, global problems and how to move money through the Baltics.”

Some including Jakobson believe the Kremlin’s agenda in Latvia is to slowly reverse the country’s strategic direction from pro-west to pro-Moscow. This is not as far-fetched as it may seem. Ukraine, Kyrgyzstan and, arguably, Georgia have all recently returned to Russia’s geo-political fold following unsuccessful revolutions, The Guardian says.

Latvia has the biggest proportion of ethnic Russians of the three post-Soviet Baltic states, accounting for about 25% of Latvia’s population. Some 37% speak Russian as a first language, the highest figure for any EU country. The charming capital Riga is effectively bilingual, with Russian and Latvian spoken on its art nouveau streets.

There is also growing evidence the country has become a haven for dubious Russian money.

In a report last week the European commission praised Latvia’s post-2008 economic recovery. But it said the authorities had not done enough to stop Latvia’s banking system being used for “complex economic, financial, money laundering, and tax evasion crimes”.

In recent months wealthy Russians have abandoned Cyprus, which is seeking an EU bailout, and moved their company registrations to Latvia.

Half of all money now invested in Latvia – $10bn – comes from non-resident depositors. Most live in Russia and former Soviet republics such as Ukraine, Kazakhstan and Turkmenistan. The US state department has expressed concern that this reliance on outside money creates a “systemic money-laundering risk”.

“Latvia seems to be the first point of call for money launderers to get their cash into the EU,” said Tom Mayne, of the campaign group Global Witness. “Once you get money into the EU there are close relations between EU banks, and you can move it around easily. Latvia is one of the main hubs. It’s a point of weakness.”

Latvian financial regulators say they have introduced tough measures to clamp down on money-laundering and suspicious transactions. They say Latvia, with its large financial services industry, is not the only European country that does business with Russia. “The EU is still buying gas from Russia. We are part of the west,” said Kristaps Zakulis, the head of Latvia’s bank regulator, FKTK.

Moscow, meanwhile, has staged military exercises on Latvia’s border, while the ultra-nationalist Duma MP Vladimir Zhirinovsky has called on Russia to annex the parts of eastern Latvia dominated by ethnic Russians.

The Kremlin has also sought to bolster its influence via Latvia’s Russian language press. An anonymous offshore company owns many newspaper titles; their real owner is suspected to be a pro-Kremlin businessman. All portray Putin favourably. Pro-Putin Russian state television is widely viewed; Russia has also distributed history textbooks to schools that portray Latvia’s post-1944 Soviet occupation as “liberation”.

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