Marc Rich, the billionaire trader and onetime fugitive who received a controversial pardon from Bill Clinton, has died aged 78 in Switzerland.

The trader died on Wednesday morning from a heart attack at his home in Lucerne, Switzerland. He will be buried in Israel.

Rich is credited with inventing the spot oil market and went on to found the international commodities conglomerate Glencore, earning a billion-dollar fortune in the process.

He was also on the FBI's most wanted list for almost two decades, after being indicted on charges described by the then US attorney for New York, Rudolph Giuliani, as "the biggest tax evasion case in United States history". According to the original 1983 indictment, Rich had bought millions of barrels of oil from Iran during the 1979-81 hostage crisis flouting a ban on "trading with the enemy". Along with his business partner, he was also accused of "classic criminal fraud" by avoiding £48m in taxes, as well as wire fraud and racketeering. Rich, who always maintained he had done nothing illegal, fled the US in 1983 to avoid the charges, although his companies later paid £200m in fines.

In 2001, by then living in a Swiss mansion bursting with fine art, Rich was pardoned by Clinton on his last day as US president. Clemency came even though White House intelligence files had flagged Rich as an alleged arms trader, suggesting he had supplied weapons and spare parts to the Iranian regime of Ayatollah Khomeini.

The outcry intensified as it emerged that Rich's ex-wife Denise had given $450,000 (then £314,000) to the Clinton Library and $1.2m in donations to Democratic party campaigns, including Hillary Clinton's bid for the Senate.

Rich always maintained that the Iranian trades were legal, because they were done through a Swiss company.

In a rare interview in 2007 Rich said he did his "most important and most profitable" trades by breaking international embargos and doing business with apartheid South Africa, an admission made to Swiss journalist Daniel Ammann, author of The King of Oil: the Secret Lives of Marc Rich.

"He had no regrets whatsoever," Ammann told the Guardian. "He used to say 'I deliver a service. People want to sell oil to me and other people wanted to buy oil from me. I am a businessman, not a politician.'"

"He went where others didn't go or didn't dare to go," said Amman. "He became rich because he was able to profit from boycotts. He profited from the embargos against Iran and South Africa."

Ammann, who described Rich as witty and charming in person, said he was a "once-in-a lifetime trader", who flourished by developing long-term relations with countries, such as Iran and Cuba, rather than on short-term speculation.

His business interests thrived across ideological faultlines. "He told me that he did business with the Ayatollah Khomeini and the Ayatollah regime knew he was going to sell it to Israel."

The oil trade with Israel became a lifeline for the young state after the 1973 Arab-Israeli war, Ammann said.

"Marc Rich at one time in the mid 1970s was crucial to Israel's survival because after the Yom Kippur war they were cut off from the oil supply," said Ammann. "Israel really had to fight for their oil and they bought it from Marc Rich."

The Israeli state never forgot this his help. With a lobbying campaign underway to scratch him off America's most wanted list, the then Israeli prime minister Ehud Barak, and former prime minister Shimon Peres made personal pleas to Clinton on his behalf to secure the controversial pardon.

Rich also financed Israeli intelligence service Mossad, funding non-military operations that helped Jews leave Yemen and Ethiopia during the 1970s and 80s. The Mossad connection would also prove useful, as Rich later had an ex-Mossad officer in charge of his security.

His life can read like a "James Bond spy story," said Ammann. Rich was nearly captured by US authorities at airports in Switzerland and Finland. "When I read about [whistleblower Edward] Snowden, I often thought of Marc Rich," he said.

Rich was born in Antwerp in 1934, but his family fled to the United States in 1941 to escape the Nazis. He went on to study at New York University, but dropped out and started working in the mail room of commodity trader Philipp Brothers in 1954. He would go on to turn the business into the world's largest trader of oil, grain and metals, before founding part of the company that is now Glencore Xstrata. Known as "the king of commodities", he broke the cartel of the major companies who controlled the oil business, and at one point in the 1980s controlled 40% of the aluminium market.

People who worked with Rich described him as secretive and this persona was embodied at Glencore, which for many years as a private company did not publish sales or earnings figures and had a one-page website that merely listed its address.

Rich sold his interest in the Marc Rich Group in 1993, when the company (renamed Glencore) was doing $30bn of business a year in 125 countries. This came one year after a record-breaking divorce settlement, when he paid out $365m to his ex-wife.

Ivan Glasenberg, chief executive of Glencore Xstrata, said the group was saddened to hear of the death of Marc. "He was a friend and one of the great pioneers of the commodities trading industry."

Despite Clinton's pardon, Rich never dared to return to his adopted country, fearing that American officials would pin another charge on him. He regretted his exile, said Ammann. "He loved America, he loved the way of life."