Assistant U.S. Attorney Albert Murray yesterday vigorously defended the Justice Department's decision not to seek indictment of individuals responsible for E.F. Hutton & Co.'s check-overdraft scheme.

In response to tough questioning yesterday from members of the House Judiciary Committee's subcommittee on crime, Murray passionately argued that the risks in trying a complicated criminal case against individuals responsible for the check-overdraft scheme outweighted the benefits.

After expressing skepticism about the Justice Department's ability to win such a case, Murray said the decision to settle the case on May 2 with E. F. Hutton enabled the Justice Department to outline new rules governing the way corporations manage cash.

On May 2, Hutton pleaded guilty to 2,000 felony fraud counts, agreed to pay a $2 million fine, reimburse the government for the $750,000 it spent on the investigation and make restitution to the banks. The government had said Hutton regularly wrote checks in excess of the amount it had on deposit as part of a complex system of transferring funds among banks.

"I made the decision, along with the department, that a corporate plea was in the best interest of the United States," Murray said. "To set guidelines for corporate cash management systems was more important than to indict two low level employes of E. F. Hutton."

Murray, assistant U.S. attorney for the middle district of Pennsylvania, denied that the decision to accept a plea bargain by the corporation and not to indict any Hutton employes individually resulted from pressure placed upon him by his superiors at the Justice Department or anyone else. He said that a lunch meeting between E. F. Hutton Chairman Robert Fomon and then Attorney General William French Smith in November 1984 had not influenced his decision in any way.

Instead, Murray said, that meeting was a catalyst that strengthened his case against Hutton because Fomon was "so scared the corporation was going to be indicted, he ignored Hutton attorneys and propriety and tried an end run," Murray said.

"The Fomon thing helped my case," Murray said. "The chairman of the board goes and talks to the attorney general of the United States. That was the first time we had champagne. That was a catalyst for us to prosecute the case."

Assistant Attorney General Stephen S. Trott sat beside Murray throughout the hearing yesterday. Trott said he wanted to show that the Justice Department stands behind Murray.

Both Murray and the Justice Department have been criticized by some for not indicting any of the individuals responsible.