BUENOS AIRES, AUG. 13 -- President Carlos Menem is scrambling to distance himself from a widening scandal in which several of his in-laws and close aides are accused of smuggling suitcases full of cash into the country as part of an international conspiracy to launder drug profits.

The scandal threatens Menem's prestige at a time when he needs international credibility to attract investment for Argentina's depressed economy. The president who once proposed the death penalty for drug dealers now finds members of his wife's powerful family accused of greasing the flow of narcodollars.

Recently, the president was accused of having met with the prosecuting judge in the case, a charge Menem initially denied and later acknowledged -- while contending that the session involved other matters exclusively.

Menem has been asked to testify in an investigation of the judge's handling in the case, according to local news agencies. Rather than appear in a courtroom, Menem may be able to give his testimony in writing, they reported.

Menem is scheduled to visit President Bush in Washington later this year. Vice President Quayle, during a brief stop in Argentina last week, told Menem that the administration has "great faith in you personally."

Simmering for several months, the scandal erupted July 24 with the indictment of Menem's sister-in-law, Amira Yoma, on money-laundering charges.

For most of Menem's two-year tenure, Yoma served as his appointments secretary, a kind of gatekeeper with immediate access to the president. She was eased into an extended "vacation" earlier this year when the allegations first surfaced, and she resigned last month after being indicted.

Free on $40,000 bail, Yoma recently completed a stay in a psychiatric clinic that local published reports have attributed to a suicide attempt.

Also charged in the scandal are Ibrahim al Ibrahim, Yoma's ex-husband, whom Menem appointed as head of the customs service at Ezeiza international airport, just outside Buenos Aires, and Mario Caserta, a supporter of Menem's 1989 presidential campaign whom Menem appointed to head a federal water board.

Yoma's brother Karim was named as a suspect by the judge who first investigated the case.

Amira and Karim Yoma are siblings of Menem's estranged wife, Zulema, who since separating from the president last year has become one of his most strident critics. The Menems and the Yomas hail from the dusty northwest province of La Rioja, two large, dynastic families that came from Syria around the turn of the century.

Last month, Zulema Menem issued a statement implying that her husband and Vice President Eduardo Duhalde knew more than they were letting on. "If you want to know about drugs, go ask Duhalde and Carlos Menem," she said, reacting angrily to a police raid on an apartment owned by her mother.

The case is a complicated web of charges and countercharges that stretch from Madrid to Miami to Montevideo, Uruguay, but the focus essentially is on one image: suitcases of cash being brought into Argentina on flights from the United States, through Ezeiza airport, no questions asked by customs or police.

The money allegedly was taken to a clearinghouse apartment downtown before being shipped across the Rio de la Plata to Uruguay, where it easily disappeared into the most secretive, no-questions-asked banking system on the continent. The Argentine-Uruguayan border is porous.

This scenario was first described by Andres de la Cruz Iglesias, an accused drug smuggler imprisoned in Spain who for months has been telling anyone who will listen about the so-called "Argentine Connection." He told of instances in which Amira Yoma allegedly entered the country with suitcases full of cash, which Ibrahim -- as head of customs at the airport -- arranged to have passed through without inspection.

The ring was allegedly headed by a man known as Mario Anello, currently a fugitive. Also allegedly involved was a man known by various aliases -- Ramon Puentes Patino seems to have been one of them -- who currently is in custody in Uruguay.

Menem at first defended his in-laws, as the administration described the charges as little more than an attempt by a suspected drug trafficker to win himself a lighter sentence by dropping famous names.

But a judge named to go to Madrid and investigate the charges, Maria Servini de Cubria, came back and began a full-scale local probe. She maintained for months, however, that Amira Yoma was simply "named," not "accused" in the investigation. And although Servini de Cubria eventually ordered Yoma's indictment, the delay helped fuel charges of a coverup.

Last week, the judge's secretary dropped a bombshell, alleging that Servini de Cubria had met with Menem at the presidential residence to discuss the case, and that she had shown secret prosecution documents to lawyers representing Yoma and Ibrahim.

At first, Menem said he did not remember any such meeting. But Justice Minister Leon Arslanian said Monday that an examination of records showed Servini de Cubria did go to the residence to meet with Menem, but that they discussed only "electoral questions" and not the Yoma case.

Servini de Cubria has been yanked off the case and accused by judicial authorities of "serious irregularities" that include secretly recording conversations she had with the Spanish prosecutor who started the whole investigation. She has denied wrongdoing.

Meanwhile, at least two other witnesses have come forth to support the allegations of money laundering.

A police officer who served as Ibrahim's guard at the airport reportedly recognized photographs of Yoma and two others and described having seen all of them at Ezeiza.

More explosively, a Perry Mason-style surprise witness named Khalil Hussein Dib -- a Lebanese national who has spent the last four years in Argentina on the fringes of monied society -- went to another judge and described instances in which Yoma and Ibrahim arrived at the airport from trips to the United States with mysterious sets of suitcases that did not match any of the rest of their luggage.

Hussein Dib described himself as a former friend of Ibrahim and Yoma. He said Ibrahim asked him to help out informally around the airport because Hussein Dib had a better working knowledge of Spanish. Although Menem considered Ibrahim worthy of an important post, he has little command of the language.

Hussein Dib said that on at least two occasions, Yoma and Ibrahim were met at the airport by other suspects in the money-laundering scheme. He said the odd suitcases -- four of them on one occasion, five on another -- were taken to an apartment downtown.

Ibrahim told him, Hussein Dib said, that the suitcases contained cash. On another occasion, he said, he saw Ibrahim at the airport counting stacks of $20 bills.

Asked why he had gone to another judge instead of Servini de Cubria, who at that time was in charge of the case, Hussein Dib testified that he "felt nervous because {Ibrahim and Yoma} knew the judge from before the trial started and they had made an arrangement."

Authorities are taking Hussein Dib's story seriously, because it dovetails almost exactly with what Spanish authorities were initially told. But subsequently Hussein Dib has made an erratic -- and, so far, completely uncorroborated -- string of statements, at one point saying he believed Yoma was uninvolved, at another point saying he had held several meetings with advisers to Menem to tell them his tale of money-laundering and intrigue.

Now that Ibrahim, the water board's Caserta and Yoma all have left his administration, Menem is taking the position that the "abuse of confidence," if it indeed happened, is behind him.

"The government is now completely detached from this question," he told the newsmagazine Gente last week. "The officials supposedly involved . . . no longer belong to the government. I feel relieved."

About Yoma, he said: "Because of the way she is, the way she worked, I never thought she could be involved, or accused, or mixed up in this." And about Zulema, he told Gente: "Well, my ex-wife evidently is not my political friend."