BELGRADE -- Snaking around a soccer stadium, thousands of Serbs waited in line for an appointment to retrieve their funds -- stoic bit players in a classic bank scam with a Balkan difference.

The patient depositors had to wait hours just to secure a date and time for access to their branch of the tottering Dafiment private bank owned by Dafina Milanovic. Pressure to get their money out of Dafiment rose dramatically last month when another, similarly high-flying private bank, Jugoskandik, stopped payments and its president, Jezdimir Vasiljevic, fled -- first to Hungary, then to Israel.

The run over the past several weeks has led Dafiment to limit payments and appeal to depositors to slow their panicky withdrawals -- another chapter in the long-predicted unraveling of a major, if unconventional, pillar of Yugoslavia's increasingly shaky economy.

By offering sky-high interest rates, "Gazda {Boss} Jezda" Vasiljevic and Dafina Milanovic coaxed what financial and diplomatic sources estimated was more than $1 billion in hard currency from Serbs eager to make their personal savings grow. Once in the banks, the hard currency became part of the government-controlled banking system, available for use by President Slobodan Milosevic's Serbian government.

This source of hard currency was crucial for the government. In 1991, Milosevic in effect had seized some $4 billion in foreign exchange accounts at official state banks, seriously undermining depositors' confidence.

Dafina and Gazda Jezda, as Belgrade residents call them, thus played essential roles for Milosevic's regime by attracting private hard currency into the official banking system at a time of desperate need. According to Western diplomats in Belgrade, the two banks also helped Milosevic's government launder money, concealing the source of funds used to purchase oil, arms and other goods that Yugoslavia was barred from buying because of the international sanctions imposed by the United Nations last spring.

Even in the murky universe of wartime Serbia, the Jugoskandik and Dafiment bosses occupied a special niche. They used hundreds of agents in the streets, in addition to bank branches, to sop up hard currency on the promise of extraordinarily high interest rates.

The two bankers' personal lives were as fast-moving as their banking tactics. Both born in 1948, they gloried in speedy cars, regal generosity to charities, high-profile sponsorship of sports teams and quasi-pop-star notoriety. Before long they became wartime icons, sharing, in a former cabinet minister's words, "very pronounced entrepreneurial talents as well as courage, imagination and a love of money."

Offering up to 16 percent-a-month return on hard currency deposits and 280 percent a month on the hyperinflated Yugoslav dinar, they were long seen by many Serbs as part sorcerers lining their depositors' pockets with gold, part Balkan Robin Hoods helping the poor -- and the war effort -- by busting the U.N. sanctions against Yugoslavia.

But the public's confidence in the banks' classic pyramid scheme -- using capital from fresh clients to meet high interest payments to previous investors -- sooner or later was destined to run out.

"We all know it's a miracle, too beautiful to last," said a Dafiment customer, Miriana Lukic, a 30-year-old unemployed Serb refugee from Bosnia. "Nowhere in the world do banks pay this much."

Nowhere else in the world, perhaps, would someone with Milanovic's record as a convicted embezzler be allowed to open and operate a bank. Equally curious was Vasiljevic's success in operating a bank without in fact owning one.

For it turned out that Jugoskandik was operating from the legal shell of a bank in Yugoslavia's second republic, Montenegro, called the Private Enterprise Bank. As such, Jugoskandik was not legally entitled to engage in foreign exchange operations, which financial specialists claim provided the lion's share of its profits.

According to Stevan Protic, the Jugoskandik lawyer who took over after Vasiljevic fled, the bank finally came to terms with reality when a Montenegrin court, acting at the behest of Private Enterprise Bank, impounded a consignment of oil imported in defiance of U.N. sanctions.

The court acted, alleging that Jugoskandik had failed to make promised payments to Private Enterprise, including those for the leasing of Sveti Stefan, the resort where Vasiljevic staged the opening games of the chess match between Bobby Fischer and Boris Spassky last September.

With that began a run on Jugoskandik involving as much as $37.5 million, enough to prompt Vasiljevic to head for Budapest with an undisclosed amount of money. There he accused Montenegro's President Momir Bulatovic and Prime Minister Milo Djukanovic of corruption and offered to have them "liquidated," according to press reports.

In an across-the-board condemnation of politicians in Montenegro and Serbia that spared only Milosevic himself, the absconding banker said of those in authority, "They asked me for 2 million {German} marks," worth $1.25 million, "then for 10 million" marks, or $6.25 million.

In an interview in Jerusalem with Washington Post correspondent David Hoffman, Vasiljevic denied any wrongdoing and said he would eventually repay his customers the principal, if not the interest, on their deposits. He said the government of Montenegro had seized his property, including 503 pounds of gold and 16 million gallons of gasoline, which if recovered would be sufficient to pay back the depositors.

Vasiljevic portrayed himself as a free-market advocate who had started trading in foreign currency and later in commodities, including cooking oil, gasoline, leather clothing, bottles and other scarce items. He said he could pay his depositors high interest rates because he made big profits in rapid turnaround of his commodity trades at a time of skyrocketing inflation. He denied that he was engaging in a pyramid scheme or that he was smuggling goods in violation of U.N. sanctions.

Vasiljevic, who lives in a Tel Aviv hotel with his family, said he brought some money and lives off his credit cards. Vasiljevic, who said he is in Israel on a tourist visa, earlier donated 50,000 Swiss francs to an Israeli school that has cared for Serbian children who lost parents in the war.

So far the Belgrade government has announced no plans to prosecute Vasiljevic or request his extradition.