William C. Sibert who is accused of stealing more than $850,000 from the federal government and spending it lavishly over a 10-week period, was released from jail yesterday on the promise that he will pay the government $50,000 if he fails to show up for future court proceedings.

U.S. Magistrate Henry H. Kenndy Jr. released Sibert over the objection of federal prosecutor Robert W. Ogren, who had asked that a high bond be continued on the GS-5 Transportation Department financial assistant.

Sibert's release came after he spent nearly two days helping the government account for the money he spent between May 16 and his arrest two weeks ago.

The government said yesterday it can verify where all but between $30,000 to $80,000 of the money was spent Sibert said the unaccounted for sum was spent in a Prince George's County card game, in which he lost $30,000, and on other general cash expenditures.

"Mr. Sibert was a very good tipper," said his attorney, Ed Wilhite. "Suddenly Mr. Sibert had a lot of friends willing to go to dinner with him or on trips with him."

Ogren said however, that Sibert's account of how fast he spent the money was "inherently incredible" and that he still could have large sums of money stashed away.

Ogren said a review of bank records showed, for example, that on June 16 and again on June 17 Sibert withdrew $6,000 in cash from his account. "How can you spend $6,000 a day in cash? That inherently incredible," Ogren said.

Wilhite replied that Sibert "was virtually spending money as fast as he could get ahold of it."

The attorney said his client had "a fair amount of debt" when he began the alleged fraud scheme, since his $10,000-a-year job gave him only "enough money to get himself in financial difficulty."

Wilhite portrayed his client as a latter-day Robin Hood who, as well as spending lavishly on himself, gave money to numerous other persons to pay off their debts. He said these "loans," which Sibert said he did not expect to be repaid, ranged from $1,000 to $5,000.

Sibert, who had $59,000 in cash on him when he was arrested Aug. 5 in Las Vegas, has said in court that he is penniless because the government has filed civil actions against him to seize his property. Wilhite is a court-appointed attorney.

During his alleged 10-week escapade, Sibert reportedly spent the money on at least 14 luxury cars costing up to $35,000 each, real estate transactions including the purchase of a $60,000 house that he had refurnished for another $30,000, a topless bar and, on one occasion, a $1,000 tip to a babysitter.

Arrested with Sibert in Las Vegas was a woman with whom he reportedly had been living in three rooms at the Capital Hilton Hotel.

Yesterday the government announced it was dropping charges against the woman, Lois A. Benson. Charges against Sibert's wife, Eva, had been dropped earlier.

Sibert's wife and parents were in the courtroom yesterday, and he said he will live with them pending further court proceedings.Neither the family nor the family's attorney, Warren Miller, would comment on the charges against Silbert.

Sibert, who served about six years in a Maryland prison for housebreaking and who has been charged with a firearms violation in Virginia, was released by Kennedy after the magistrate said: "I'm not going to incarcerate Mr. Sibert any further because he can't account for the money. It redounds to his credit that he appears to be accounting for it."

Sibert, 30, allegedly sole the money from the government by altering vouchers ordering payments of transportation funds to the Atlanta subway system now under construction.

Sibert had the checks sent to himself instead of Atlanta and according toe the charges against him, opend a bank account in which the checks were deposited. The alleged scheme was discovered after federal agents were alerted to his spending sprees and his banking transactions at the uburban Trust Co. branch in Hyattsville.