I believe the answer is B Japan
The phrase from the excerpt that suggests that Krogstad is prone to engage in crime and may, in fact, be a criminal is the following one:
diseased moral character
It is the only option that talks about somebody being a bad person, which is what Krogstad is. The other options do not show that moral ambiguity this option does.
A man wandering near a flowing river started a miser weep
