Intelligent, belligerent and pompous, Conrad Black built a media business spanning three continents. He saved the Telegraph group from collapse, and was given a peerage for his achievements. He acquired a glamorous second wife in the writer Barbara Amiel, and together they bulldozed their way onto the social and political stages of London and Washington. He acquired political figures such as Henry Kissinger and Margaret Thatcher as confidants, advisers and employees. But with a stew of alleged financial irregularities coming to the boil, and the bouquet of a Maxwellian disregard for the rules, Black and his wife are fighting for their reputations.

Sued by his former company Hollinger in Delaware in February, Black lost control of his newspaper company and his reputation was further tarnished in testimony. The judge deemed him "evasive and unreliable". Writs worth hundreds of millions of dollars are flying; two more writs were served on him as he dined with his lawyers and another as he headed for the court's toilets.

Worse is to come.

Regulators are now awaiting an internal company audit of Black's conduct before deciding what action to take against him. It is, said sources, damning, and paints Black as a man with the "morals of a shark". Jail is a possibility, and the couple who coveted greatness with a billionaire lifestyle and soaring egos may end up broken, and broke, by their lavish expectations.

"It was always going to end like this," says Henry Jackman, a former lieutenant general of Ontario. He has known Conrad Black for 30 years and the two are close. They have a tendency to play rough but, with friends like this, it's no wonder Black made so many enemies. He wanted his part in history and to be regarded as a colossus. Not content with being a successful businessman, he saw himself as an authority on the world's political stage, and a military historian, writing extensively on issues such as Napoleon and the Middle East, and even authoring a gargantuan biography of Franklin Delano Roosevelt. Perhaps Conrad Black saw himself as a burgeoning hero of history; he certainly lectured all and sundry as if he was. He once favoured Vatican robes at a fancy-dress party — he appeared to believe in his own infallibility, but as a historian he should have known every empire designs its own demise, including his own.

"There is something very self-destructive about Conrad," says Jackman. "Why, I don't know. It's his central mystery." A mystery why he has squandered his talents, fortune and his reputation. He believes he is the subject of an underhand vendetta by lesser mortals, but even his friends believe he personally pressed the self-destruct button. Black is battling on several fronts against overwhelming odds, but he's not known to shy away from a scrap. In the rise and fall of Conrad Black and his elegant wife, it was always thus.

In Canada, a country whose citizenship Black swapped for a peerage, it is insightful that it was the former premier Bob Rae who coined the phrase "Conradenfreude". Black has never been afraid to offend people in power, at least not those who weren't impressed by him. In his office in Toronto, Henry Jackman keeps a photo of the two of them meeting the former president Ronald Reagan. He has another picture cut from a newspaper of the press baron in his ermine robes after becoming Lord Black of Crossharbour. He has nobody to blame but himself, says Jackman. "I think what we see is a pattern that caught up with him. He was a little too arrogant, too careless. He thought he was above all this pedestrian stuff, all these bloody lawyers. But he has a great sense of history — he should have known all this was predictable."

"All this" amounts to one of the most dramatic business collapses in recent years. Black can't blame the global turndown, or the banks; he brought it all on himself — spectacularly. Once a "paper tiger", architect of one of the world's premier newspaper groups, Black has been ousted as chairman of its controlling parent, Hollinger, the company he founded; his former colleagues at Hollinger are suing for $200m that they claim Black, his wife and his aides have misappropriated; shareholders have filed suit against him for $300m. Half a billion dollars that Black believes he, his wife and friends owned or earned.

With the loss of his power base, another front has opened up in the war on Black.

America's top financial watchdog, the Securities and Exchange Commission (SEC), is aggressively investigating his management of Hollinger. The SEC can push for criminal charges to be brought after an investigation and does not shirk from its responsibility to police big business and collect famous scalps. The SEC is believed to have enlisted the FBI's help in its investigations. For more than eight months, Richard Breeden, a former chairman of the SEC, has been conducting an internal review of Hollinger that was due at the end of March, and it seems certain Black will face serious censure.

The most immediate result of Black's difficulties is the fragmentation of his empire. To his credit, he had built it with guts and panache. Hollinger's crown jewels are the Daily and Sunday Telegraph newspapers — now up for auction and coveted by the Barclay brothers, owners of The Scotsman, and, among others, the Daily Mail's parent company. Other assets, including The Spectator, The Jerusalem Post and the Chicago Sun-Times, are also for sale. With them has gone Black's lavish lifestyle, funded and supported by Hollinger money. The boards are up outside Black's homes in London and Palm Beach, said to be worth £12m and $20m. The company has cancelled payments for his staff of servants, and axed his monthly tab at New York's exclusive dining club, Le Cirque 2000. The company's private jets, which he and his wife employed like company cars, have been grounded.

Sucked into the wake of scandal are Barbara Amiel Black and his friends, including Henry Kissinger. Board members of Hollinger, they are accused of rubber-stamping Black's alleged excesses, and face years of litigation from shareholders. Not since the sinking of Robert Maxwell's Mirror group has a captain of industry been so swamped. "It's an odd thing to say," says Jackman, "but Conrad has all the characteristics of a parvenu. He needs to impress the people he is impressed by; everybody else can go hang. That, I think, is what has brought him down. Very odd, because, you know, he was not born above a shop."