Con Men of the Year Masters of Deceit.

By S.C. GWYNNE

THEY WERE BOTH SELF-MADE MEN WHO BUILT THEIR empires on the ill-placed confidence of lenders and investors. One of the con men was a Pakistani banker who exercised influence from Washington to Beijing but was in fact running a financial supermarket for criminals. The other was a 300-lb. tabloid tycoon whose fatal plunge into the Atlantic was one of the most bizarre finales in business history. When their empires came crashing down in 1991, the debacles raised pointed questions about the laxity of financial regulations around the world.

Agha Hasan Abedi, founder of the Bank of Credit & Commerce International, ranks as one of the great criminal minds of his time, a man who built a financial web that is unlikely ever to be completely understood. In fact, B.C.C.I. might have endured longer had Abedi not fallen gravely ill in the late 1980s. The frail 68-year-old could only watch from his estate in Karachi when the branches of his bank were seized in 69 countries last July.

Of B.C.C.I.'s $20 billion or more in assets last year, less than $2 billion is recoverable, the bank's liquidators say. Most of that money disappeared in outright theft, uncollectible loans, bribes and losses on trading. The bank's collapse has meant disaster for more than 1 million depositors.

Abedi made connections with power elites worldwide, from corporations like BankAmerica to officials like former President Jimmy Carter, whose charitable foundations received $10 million in donations. On its darker side, B.C.C.I. provided services for Panamanian leader Manuel Noriega, the Medellin cocaine cartel and terrorist organizations around the world. The most nefarious aspect of B.C.C.I. was its "black network," which engaged in terrorism, intimidation and paramilitary actions.

The most prominent victim of Abedi's flimflam operation was the man whose wealth helped finance B.C.C.I.: Sheik Zayed bin Sultan al-Nahayan of Abu Dhabi, President of the United Arab Emirates. Investigators say approximately $2 billion of Zayed's own money, along with $7 billion in Abu Dhabi state funds, has disappeared into the bank's black hole. In the U.S., B.C.C.I.'s secret ownership of Washington's largest bank, First American, implicated former Defense Secretary Clark Clifford. As chairman of First American, Clifford had denied that B.C.C.I. controlled the Washington bank; he and his partner, Robert Altman, now face possible criminal indictment. On Dec. 19, prosecutors and liquidators reached an agreement for B.C.C.I. to plead guilty to U.S. racketeering charges; it will also forfeit $550 million to shore up American banks it owned and reimburse depositors and creditors in other countries.

The Robert Maxwell case was stranger than most tabloid tales. The Czechoslovak-born press baron had created an empire financed largely through illusion, yet his holdings included the London Daily Mirror, New York City's Daily News and Macmillan, the U.S. book publisher. In assembling his web of 400 companies, Maxwell piled up debts, apparently without unduly alarming the dozens of banks and other lenders that let him borrow a sum now estimated at $7 billion.

Suddenly, just as creditors were beginning to wise up, Maxwell disappeared from his 180-ft. yacht and was found floating near the Canary Islands. An autopsy ruled that he died of either a heart attack or drowning, or a combination of the two. But as investigators sifted through the mess he left behind, the suspicion grew that "Cap'n Bob" had deliberately abandoned ship. The most shocking discovery was that he had secretly and improperly "borrowed" $1 billion from worker pension funds to keep his companies afloat. While Maxwell's son Kevin struggles to manage what's left of the family holdings, most of the legacy is likely to be liquidated.

How could the financial cops have allowed two such blatant scandals to take place? Part of the answer is that the international financial system is rife with offshore tax havens, secrecy laws and virtually unregulated banking zones. Maxwell's family trusts were incorporated in Liechtenstein, and B.C.C.I. was incorporated in Luxembourg. Both countries are known for their lax regulation. In each case, the con men made billions of dollars disappear through the world's cracks and loopholes.