The former president of Richmond's Union Federal Savings and Loan Association pleaded guilty yesterday in federal court here to embezzling more than $139,000 from the financial institution. Union Federal failed two years ago and was taken over by Bay State Savings Bank of Newport News.

Melde Rutledge Jr., 36, of 905 Navahoe Dr., Silver Spring, pleaded guilty to a single count of interstate transportation of property obtained by fraud, in this case a check for $71,854.67 that he used as a down payment for a house at 606 Sixth Place SW.

According to court documents, the check represented part of the proceeds of a $100,000 certificate of deposit that Rutledge cashed in without the permission of its owner.

In addition, Rutledge acknowledged that he used $17,000 of Union Federal funds to purchase furniture and a personal computer for his home, used another $39,000 of Union Federal's money to pay expenses of his private venture capital firm, and used $11,500 of the association's money to purchase a printing business for himself.

Rutledge, who was also president of Union Federal's Washington subsidiary and a venture capital firm here, faces a prison term of up to 10 years and a $10,000 fine when he is sentenced by U.S. District Judge Gerhard Gesell.

Two weeks after Rutledge was replaced as president of Union Federal, it was placed under receivership by the Federal Savings and Loan Insurance Corp. and the insured accounts were transferred to the Newport News institution.