NEW YORK, JAN. 11 -- Federal agents last month raided the offices of a New Jersey investment firm seeking evidence of an alleged tax and securities fraud scheme involving the Wall Street firms Drexel Burnham Lambert Inc. and Merrill Lynch & Co. Inc.

The raid was described by sources as a new turn in the widespread corruption investigation of Drexel and others being conducted by the Manhattan U.S. attorney and the Securities and Exchange Commission.

The targets of the search, which was conducted Dec. 17, were several investment partnerships headquartered in Princeton, N.J. The partnerships -- Newport Arbitrage Partners, Englewood Partners, and a related entity, Oakley-Sutton Management Corp. -- were described by Wall Street officials as aggressive investors in domestic and foreign stocks, bonds and other securities.

Search warrants on file in New Jersey federal court state that the government is seeking evidence of "parking" of securities and a "scheme to generate false and inflated federal income tax deductions."

Other court documents indicate that the government agents seized dozens of boxes of trading, accounting and administrative records during their search.

In a parking scheme, an investor may seek to hide his ownership of stocks or bonds by transferring the securities to someone else while making an illegal oral agreement to take the securities back later. In the Newport search warrants, parking was defined as "the purchase or sale of securities subject to oral repurchase agreements."

As previously reported, the government is probing allegations of a stock parking scheme involving Drexel executive Michael Milken, who heads the firm's Beverly Hills junk bond department, and former speculator Ivan F. Boesky, according to sources familiar with the investigation. Sources said stock parking was allegedly used to facilitate corporate takeovers and avoid rules governing the amount of capital an investor must keep on hand.

In the alleged scheme involving the Newport partnerships, as described in the search warrants and by sources familiar with the government's investigation, the government is probing whether Newport parked securities to receive favorable tax benefits, while at the same time profiting from trading strategies related to corporate takeovers.

While much of the evidence in the government's continuing investigation of Drexel, Milken and others was originally provided by Boesky, sources described this latest turn in the probe as an indirect offshoot of the former speculator's cooperation.

Boesky was sentenced to three years in prison on Dec. 18. He had earlier pleaded guilty to one count of securities law violations and paid the government $100 million to settle charges that he made illegal, insider stock trading profits in connection with corporate takeovers.

Four individuals connected to the Newport and Englewood partnerships were named in the search warrants. They are James Sutton Regan, Jack Rabinowitz, Charles Zarzecki and Paul Berkman. Phone calls to the offices of Oakley-Sutton were not returned.

In addition to records maintained by those four individuals, federal agents sought evidence of Newport's relationship with Barbara Geary, an employee of Merrill Lynch, and Bruce Newberg and Lisa Jones, employees in Drexel's Beverly Hills office, according to the warrants.

Reached at her New York office, Geary declined comment. Newberg and Jones could not be reached. Newport has been a client of Merrill and Drexel.

A Merrill Lynch spokesman acknowledged that the firm had been subpoenaed in connection with the probe. "We have received a subpoena for information in connection with this matter and of course we are cooperating fully with the authorities," the spokesman said.

Drexel spokesman Steve Anredder declined to respond to questions about Drexel subpoenas or the firm's possible role in the alleged scheme. "You're telling us it's before a grand jury, and if that's so, we don't comment," he said.

Since the massive SEC-Justice Department probe of Drexel was launched late in 1986, Drexel executives repeatedly have said they know of no wrongdoing by anyone at the firm.

Court documents stated that the government was seeking records reflecting the alleged tax and parking scheme maintained between Jan. 1, 1984, and the present. Federal agents seized reams of trading records, personnel records, telephone records, Rolodexes, calendars and personal diaries during their search, according to the court records.

Written affidavits describing evidence previously accumulated by the government about the alleged tax and parking scheme have been filed under seal in federal court.

Government officials declined to comment on the probe.

Wall Street sources said the probe appeared to focus on possible efforts to reduce income taxes by generating artificial bond-trading losses. These sources described Newport as a highly sophisticated arbitrage firm that traded in various types of securities but specialized in recent years in bonds convertible into common stock and in warrants, securities carrying the right to trade certain common stock in the future. Sources said Newport traded both domestic and foreign convertible bonds and warrants as part of its regular strategy.