A 17-year-old Chicago high school student using a personal computer in his bedroom broke into AT&T's computer systems around the country, stole $1 million worth of sophisticated software and was "on the verge" of being able to disrupt the company's telephone network, according to federal prosecutors.

The youth also appears to have gained access to AT&T computers at two military bases: the NATO Maintenance and Supply Headquarters in Burlington, N.C., and Robins Air Force Base in Georgia, an Air Force logistics command center, according to prosecutors. The computers did not store classified or sensitive material, they said.

The Chicago Tribune reported that records of long-distance phone calls from the youth's phone showed that attempts were made to gain access to computers at the accounts payable department of The Washington Post, a hospital in South Bend, Ind., and computers in Columbus, Ohio, Rye, N.Y., and Pipe Creek, Tex.

An AT&T spokesman said that the incident was "certainly one of the more serious" cases of unauthorized computer access that the telecommunications firm has yet encountered.

"We view this as a kind of Yuppie vandalism that is quite costly to us," said Burke Stinson, an AT&T spokesman said.

According to Stinson and a federal prosecutor in Chicago, At&T security officials first discovered late last April that an unidentified outsider had broken into some of its computers. Following up on information supplied by the company, a team of agents from the Secret Service, the FBI and the Defense Criminal Investigative Service obtained a search warrant Sept. 4 and raided the north side Chicago home of Herbert Zinn.

Among the material seized from Zinn's bedroom were three personal computers, an AT&T 7300 and two Ataris, as well as computer discs containing copies of software he had transferred into his computers. The case was first reported in yesterday's Chicago Tribune.

Assistant U.S. attorney William Cook said yesterday that his office is evaluating whether to prosecute Zinn under a new federal law that prohibits computer theft or to turn the case over to the Cook County State's Attorney's office. He said that while Zinn's status as a juvenile is a factor in the case, the government nevertheless viewed this as a "very serious violation."

Kaaren Plant, a lawyer for Zinn, said yesterday that the youth "categorically denies doing anything that he should not have been doing. I can assure you that my client had absolutely no sinister motives in terms of stealing property. ... Right now, we're very much in the dark as to what this is all about."

According to Cook, Zinn had used a "computer hacker's billboard" -- which distributes the phone numbers and access codes of various computer systems -- to help break into AT&T's Bell Labs computers in Naperville, Ill., and New Jersey.

Operating under the code name of "Shadow Hawk," Zinn then transferred sophisticated Bell Labs software, including "artificial intelligence" programs, to his personal computer, Cook said. Bell Labs has valued the software at about $1 million, he said.

Cook, citing an affidavit filed by a Secret Service agent, also said that Zinn was close to tapping into the "internal operations of the telephone system itself," including AT&T's central switching system.

"He was knocking on the door to being able to gain the kind of access that would have allowed him to disrupt the {telephone} system," said Cook. "He was on the verge of being able to alter, manipulate or halt the telephone system."

But Stinson said Zinn could not have created nationwide havoc with the phone system.

"I'm not sure what kind of knowledge the Secret Service people have about the telephone network," he said. "Our system is designed to that a mishap in one location is not going to blow out the entire network."

Nevertheless, several persons familiar with the case yesterday said the incident was highly embarrassed AT&T and showed potentially serious lapses in its security.

Most institutions have established elaborate security for their computer systems, requiring authorized outsiders to know numerous access codes and passwords -- as well as the proper phone numbers.

Stinson said that AT&T security officials believe the incident does not demonstrate flaws in the company's security system but in the failure of its employes to follow proper procedures.

Asked what steps the firm will take to improve security, he replied: "What we're doing is continuing to remind people of the need to follow the proper security steps. We're saying the locks are pretty damn good, but we need to remind people to close the door."

Gary Lucke, assistant director of computer services at the Post, said the newspaper was unaware of its computers being compromised. While it would be possible for outsiders to gain access to the accounts payable computers, that person would need to know a lengthy series of codes and passwords.