George A. Underwood pleaded guilty yesterday to the misdemeanor charge of "false pretenses," and the U.S. Attorney's Office, in exchange, agreed to drop its original felony charge of "uttering," or passing forged documents.

Behind that plea, according to police, prosecutors and D.C. Department of Environmental Serves (DES) officials, lies an elaborate scheme executed by some two cranes drivers commissioned to remove junk cars from the streets and alleys of the District of Columbia.

By terms of his contract with the District government, Underwood or his agents were supposed to report each morning to the DES "Alert Center" at 1341 Maryland Ave. NE, pick up a list of abandoned vehicles and their locations and deliver the vehicles directly to one of two large scrap processors in the Maryland and Virginia suburbs.

What Underwood was actually doing much of the time, Assistant U.S. Attorney Mary Ellen Abrecht told the court yesterday, was transporting the cars to his own private lot, removing valuable parts, and selling off the remains. Not only would he pocket the proceeds, Abrecht said, but he would report back to DES that the vehicles had been "Gone on Arrival" and collect $2 per car from the D.C. government for his time and trouble.

Underwood came under investigation after Beverly G. Wallace, the abandoned auto clerk at the Alert Center and her boss, Paul Leake, contacted police in January, 1976. Wallace and Leaks were concerned about the large number of cars logged on "GOA."

In several cases, Wallace recalled yesterday, citizens had called in to complain about the disappearance of their cars, and had subsequently located those cars on Underwood's lot.

A special police task force under Sgt. Ronald L. Kingston of the fourth district was put in charge of the case, and in April, 1976, Underwood's fleet of tow cranes and flatbed trucks were placed under surveillance.

During that month, according to police, Underwood or his agents were observed handing approximately 30 cars that had been marked with a sticker as "Abandoned," but only four of these cars were delivered to Joseph Smith and Sons, a Kenilworth, Md., scrap dealer, on behalf of the District. The remaining cars were logged as "GOA," and in at least some cases, police say, were sold to Smith and Sons in Underwood's name.

All told, Underwood received DES forms identifying 188 junk cars in April, 1976, but reported finding only 10, according to police.

Underwood's contract was terminated in JUne, 1976, leading him to file a civil suit against the District Government, which responded with a counter claim for $10,000 compensatory damages, $50,000 punitive damages, and court cost. Both cross actions are now scheduled to be heard in February, 1978.

Although Underwood has been barred from further contract work for the District, police officials involved in the junk-car program argue that the system encourages fraud. The contract is let by competitive bidding, and for the last two years the winning bid has been in the rang of $10 per car.

According to Lt. Douglas Cissel of the D.C. police property division, it is virtually impossible to make a profit under those terms.

"I would say to really make money, I'd have to have around $18 or $19 a car," says Eugene Johnson, whose Indian Head, Md., firm had the contract from June, 1976, through June, 1977 Johnson, who received $13.50 per car from the D.C. government and another $5 from the scrap dealers for removing tires and gas tanks, says he has generally been able to locate about 50 per cent of the vehicles on the DES list.

Other local tow-crane operators agree that $10 is a very low figure for towing vehicles to Maryland and Virginia, particularly since some abandoned cars have had wheels removed and require the use of flatbed trucks as well as ordinary tow cranes. Call Carl's a large areawide auto repair chain and two service, is now collecting $10 per car from the D.C. police merely for towing vehicles to the nearest police station.

"We figure that we should get at least $15 an hour to compensate us for putting a tow trunk on the street and towing cars," says Albert Branson, Call Carl's treasurer. Call Carl's did not bid on the junk contract, he says, because of the expense of acquiring the necessary flatbed trucks.

The current contract crane operator, at $9 at tow, is Jerry's Used Auto Parts, of Laurel. Jerry Aldrich, the proprietor and a former business associate of Underwood's, complains that he is losing money because "I'm lucky if I can find 10 of 25 cars . . ." But if the cars were there, he says, he could turn a profit from the $9 he is paid by the District and the $5 he receives for removing gas tanks and tires.

Aldrich blames his problems on the yellow stickers that D.C. police affix to the windshields of abandoned cars at least 72 hours before towing. "That sticker is like saying, 'Here I am, take me,'' says Aldrich. "By the time I get there, somebody else has been there first . . . If theres any way possible I would like to get out of it tomorrow morning." His contract expires June 30, 1978.

Police, towing contractors and D.C. government officials propose varying alternatives to the present program, under which the District pays the tow crane operator a fixed sum of money per car, and the scrap dealer pays the District.

"George Underwood and me were towing these cars for 15 or 18 years for nothing," says Aldrich, who urges a return to the system of letting the tow crane operator realize whatever he can for each vehicle, without compensation from the D.C. government.

Lt. Cissel would like to have the police buy a few cranes and a flatbed truck, hire some drivers, and do the whole job themselves. "Being policemen," he says, "there are certain things that we like to hold near and dear."

Before yesterday's plea, court records show, Underwood had been convicted in 1956 and 1960 of burglaries, and in 1968 of armed robbery. There is no bar to the District's letting a contract to a convicted felon, according to Howard Schwartz of the D.C. procurement office, beyond a general requirement that the contractor should be "responsible."

"It's a gray area," Schwartz said.