From his 21st-floor suite of luxury offices atop the twin towers of the Brasilinvest building, Mario Bernardo Garnero enjoyed a panoramic view over this city's booming new financial district, which acknowledged him as its most charismatic financier.

At the peak of his investment banking career, the 47-year-old Garnero was untouchable. In 1982, he had been chosen to welcome President Reagan on a visit here that Garnero had in large part arranged. He boasted of his business associations with New York financier William Simon, a former secretary of the Treasury, and Secretary of State George P. Shultz, when Shultz was an executive of The Bechtel Group (but in fact, the two Americans had no role in the management of Garnero's businesses, according to informed sources).

And he was named 1984's "Man of the Year" by the Brazilian-American Chamber of Commerce last May at a glittering New York reception.

Now Garnero has been toppled from his perch in a sudden upheaval this month, a casualty of a powerful anticorruption campaign launched by Brazil's new civilian government.

On his first day in office, March 18th, Finance Minister Francisco Dornelles ordered the liquidation of Garnero's companies and began legal moves to have him arrested for alleged financial frauds totaling $68 million. The government also alleges that Garnero owes $5.4 million in unpaid taxes, and the financier is reportedly in hiding. "There are strong indications of a prosecution under the criminal code," said Jose Paulo Cavalcani, Brazil's secretary general of justice.

If convicted, Garnero would be the first Brazilian banker ever to go to jail for financial crimes, despite what government prosecutors say was a long-standing, pervasive pattern of financial fraud and corrupt relationships between bankers and government officials. The new government of president-elect Tancredo Neves has replaced a 21-year-old military administration unable to account for billions of dollars of missing state funds, and Neves has called the financial corruption "one of the most hated symbols of the abuse of power."

"Nobody went to jail in the last 20 years. Now we're going to change that routine and apply the law," said Cavalcanti. "It's more an ethical question than a financial one," said Planning Minister Joao Sayad, who heads a commission proposing new laws and jail terms for company directors who gamble irresponsibly on financial markets with investors' funds.

But Garnero haughtily ignored this fundamental shift in values now pervading Latin America's largest nation, according to government prosecutors. In the final weeks of military rule, Garnero allegedly committed "numerous illegalities," principally the siphoning of funds from his investment bank into phantom companies he had set up, the government charges.

Brasilinvest also traded unsecured bonds on financial markets, in defiance of local banking laws, officials say. The Finance Ministry wants Garnero held in preventive detention until a criminal case against him is prepared; Garnero's lawyers say such detention is ridiculous before formal charges are laid.

Garnero's flagship was the holding company Brasilinvest Investimentos Participacoes e Negocios, the nation's 61st largest financial organization. Its strongest arm was the investment bank BBI, set up 10 years ago to bring in over $1 billion of loans from overseas. The bank was launched following an international business seminar held in Salzburg, Austria, to encourage investment in Brazil. It was here that Shultz and Simon first became involved as unpaid advisers to the Brasilinvest board.

Shultz cut his relationship with Garnero's businesses in 1982, when he joined the Reagan administration, but Simon, a friend of Garnero's, is still associated with him. There is no suggestion that either Shultz or Simon was aware of Garnero's activities, but authorities say Garnero used their international prestige to help him obtain credit inside Brazil.

The Justice Ministry has issued a restraining order freezing the assets of Garnero and 10 Brasilinvest advisers, including Helio Smidt and Wolfgang Sauer, the presidents of Brazil's international airline Varig and of Volkswagen's Brazilian subsidiary, respectively. Both have declared they were innocent victims in the scandal. So has Mauro Salles, new federal cabinet secretary for extraordinary affairs, whose assets were frozen though he resigned from the Brasilinvest board in October.

"I lament that the dishonesty of a few has brought the institution to collapse. Whatever discomfort I have to suffer is a cheap price to pay for cleaning up the markets," Salles said, applauding the central bank's decision to liquidate BBI. The new Commerce and Industry Minister Roberto Gusmao also resigned last year from the board of governors, thus narrowly escaping a similar fate.

A tireless self-promoter whose fortune was launched by his former wife's 22 percent stake in Volkswagen's Brazilian subsidiary, Garnero earned a seat on the car company's board and eventually amassed a fortune of $52 million.

His maneuvers were based on the belief that Brazil's economy would continue to grow and that government would always prefer to bail out losers rather than publicly admit any financial instability. He was wrong on both counts.

"He started out small . . . but got more and more ambitious -- and overreached himself," said one Brazilian financial journalist.

Garnero was not the first big-name victim of both the debt crisis that has gripped Brazil and the change in government attitudes toward free-wheeling investors. Rio shipyard owner Paulo Ferraz committed suicide in February after foreign creditors had threatened to foreclose on the state shipping agency Sunamam's $545 million loans. Sunamam insisted that responsibility for the borrowings rested with the shipyards, not the government, and that Ferraz' shipyard was carrying $291 million in debts.

The central bank intevened against two leading private banks in January: Sulbrasilero, the nation's 17th-largest bank, which also controls Habitasul, the third-largest privately owned savings and home loan bank. Both institutions had become inextricably tangled with Garnero in what one banker described as a "marriage of the poor and the desperate."

Aware of Brasilinvest's impending collapse, Garnero bought into the Sulbrasileiro group using $33 million worth of paper from his own bank. His idea, according to one prevalent theory, was to create a "critical mass" of failing companies too large for the central bank to ignore. But he was outflanked last month by the central bank, which swiftly closed Sulbrasileiro.

The administration has also struck at former central bank governor Carlos Geraldo Langoni, reopening the file on Brazil's most sordid and costly corruption case, that of the Coroa-Brastel finance house.

Its June 1983 collapse took with it almost $400 million of private investors' funds -- along with an ill-advised $30 million of central bank bailout money (which former finance minister Ernane Galveas had minimized as "peanuts"). Despite mass rallies and protests, investors' losses were not reimbused. Ironically, one of the causes of Brasilinvest's collapse was that it held 10 percent of the worthless Coroa-Brastel paper.

Langoni, who resigned in September 1983 alleging differences with the International Monetary Fund, now faces criminal charges of extending allegedly illicit help to Coroa days before it collapsed.

"We're not interested in a witch hunt or revenge," said prosecutor Cavalcanti. "The great change is that now we are going to apply the law."