The two principal owners of Boss & Phelps Inc., a D.C. real estate company, were charged yesterday in an alleged bank fraud scheme in which they obtained nearly $1 million from two of Washington's leading banks by writing hundreds of worthless checks over nearly three years.

According to papers filed yesterday in U.S. District Court here, Owen N. Cummins, 50, and Edward B. Ballow Jr., 44, carried out a complex financial maneuver in which they overdrew checking accounts at three banks, but hid those overdrafts with worthless checks drawn on 'paper balances' at the other banks.

The alleged scheme, known in financial circles as "check kiting," went undetected until last July, when one of the banks became suspicious and stopped honoring checks from others, according to court papers.

"It's like a house of cards: When you pull one card out, all the cards fall down," one banking official said yesterday.

Federal prosecutors said yesterday that it may have been the largest check-kiting scheme ever to be uncovered here. In addition to the banks, dozens of prospective homeowners and apartment renters lost thousands of dollars in security deposits that had been paid to Boss & Phelps, a 74-year-old real estate company that went out of business shortly after the investigation began.

Bank records showed large amounts of cash flowing into the company's accounts, creating the impression that business was booming. But, prosecutors said yesterday, most of the company's monetary assets existed only on paper.

During the nearly three years the alleged scheme took place, from December 1978 through July 27, the company's income was never greater than $30,000-a-month. But on some occasions, the firm's bank records would indicate as much as $5 million in monthly revenues deposited through apparently worthless checks, according to a criminal information filed yesterday in U.S. District Court here.

"You're talking about hundreds of checks each month," said Assistant U.S. Attorney Raymond Banoun. Most other check-kiting schemes involve only two or three worthless checks for much smaller amounts drawn over several weeks, he said. Boss & Phelps sometimes deposited as many as 75 such checks a day at the three banks, according to the government's complaint.

The National Bank of Washington lost $609,000 through the alleged scheme. First American Bank lost $302,469, according to the court papers. A third bank, Riggs National, discovered the scheme first in late July and alerted the FBI and the other two banks. Riggs has not reported any losses, according to the government.

Cummins, of Vienna, who was chairman of the board and treasurer of Boss & Phelps, is charged specifically with depositing a $19,949 worthless check at First American on June 19 and a $20,755 bad check at NBW on July 16.

Ballow, of Gaithersburg, vice-chairman and secretary of the firm, is charged with giving a $19,734 bad check to First American on June 26 and a $20,419 worthless check to NBW on July 14.

The government's complaint alleged that of the $911,000 obtained through worthless checks, about $600,000 was used to operate the real estate company, and the remainder used by Cummins and Ballow for personal expenses.

Each man could receive up to four years in prison and fines of up to $10,000 if convicted on both of the two felony charges filed against each one.

Brian C. Shevlin, the attorney for Cummins and Ballow, was out of town yesterday and could not be reached for comment, according to his secretary. Shevlin has previously said that his clients deny any wrongdoing.

Banking and law enforcement sources said that the alleged scheme went undetected for so long because bank officials regarded Boss & Phelps as a trusted customer with a good reputation.

"It's one of the trials and tribulations of the banking business," said Luther H. Hodges Jr., NBW's chief executive officer.