Federal prosecutors are continuing the investigation of a Prince George's County bank following the bank fraud conviction last week of a former top officer at the politically connected institution, according to informed sources.

The prosecution of Thomas C. Pulliam Jr., Jefferson Bank and Trust Co.'s former executive vice president, was seen by federal investigators as a first step in their probe of the bank's past lending practices.

In the months before Pulliam's trial, the government tried to strike a deal with him in return for his help in determining whether other bank officials or directors had misused the institution. Pulliam refused to plea bargain and went to trial instead.

However, the trial ended when Pulliam withdrew his not guilty plea and pleaded guilty to a conspiracy charge. The government is now hoping that the added threat of a possible prison sentence -- Pulliam could be jailed for up to five years -- will finally convince him to cooperate. No sentencing date has been set.

If Pulliam remains quiet, investigators plan to focus their attention on others less prominent than he who had dealings with the bank, sources said, possibly including borrowers who benefited from several Jefferson loans that state and federal bank regulators found to be unacceptably risky.

"If Pulliam is not going to help, [the government] will go to the small people, to see if they're willing to give somebody else up," said one source familiar with the investigation.

Bank officials have maintained that Pulliam, who was fired a year ago, was chiefly responsible for Jefferson's problems.

"The [loans] I'm aware of that were the biggest problems were the ones made by Tom Pulliam. Whether he was in collusion with anybody else [other borrowers] or it was bad judgment, I don't know," said Raymond G. LaPlaca, the Jefferson board chairman, who is a politically active Prince George's businessman.

Jefferson, a small Capitol Heights bank that opened two years ago, has among its stockholders several prominent Prince George's businessmen and politicians, including County Executive Lawrence Hogan, county Planning Board Chairman Charles A. Dukes Jr., county liquor board member Gerard F. Holcomb, and developer Kenneth H. Michael.

LaPlaca, Holcomb and Dukes, Jefferson's general counsel and former chairman, have been part of Hogan's inner circle in his various campaigns and have helped make him Prince George's most successful Republican politician.

Dukes and Holcomb also are connected to another financial institution, John Hanson Savings and Loan. Dukes is chairman of John Hanson's board. Holcomb also sits on the John Hanson board and is the president of a John Hanson subsidiary.

Jefferson was founded on the premise of being an aggressive bank eager to make loans, which would bestow power and influence to the directors and officers and provide the bank with its chief source of revenue. At his trial, Pulliam summed up the bank's financial ambitions with the words: "Our philosophy was to try to make any and all possible loans."

An investigation by The Washington Post earlier this year found that nearly half the loans criticized by state and federal bank examiners -- about $1.5 million -- went to friends and associates of stockholders and directors, including county political figures such as state Sen. Tommie Broadwater Jr. and County Council member Floyd Wilson. In addition, numerous loans weren't being repaid and the bank suffered from poor internal controls and incomplete loan records.

LaPlaca said last week that the bank has corrected its problems, tightened its loan procedures and hired a new chief executive officer. "We've stopped licking our wounds and we're going forward," he said. "The bank is now operating at a profit again."

Charles R. Georgius, deputy Maryland bank commissioner, said last week that Jefferson is "substantially in compliance" with improvements ordered by the state in April. The state had taken the unusual step of accusing the bank of operating in an "unsafe and unsound" manner. Jefferson then signed an agreement with the state promising to correct the problems.

"We'll continue to monitor it," Georgius said.

In the months following his dismissal from Jefferson, Pulliam, 37, had told friends and authorities that he was being made a scapegoat. But at his trial, which lasted for a week before he changed his plea, Pulliam's defense, which including 3 1/2 hours of testimony from him, was primarily an attack on the credibility of the government's chief witness, a longtime Pulliam friend. The defense made no mention of the strong criticism of the bank by federal and state regulators.

At the trial, it appeared Pulliam was on friendly terms with his former associates at the bank. Holcomb testified for him as a character witness. A Jefferson director, Riley B. Carter II, was also scheduled to be called as a defense witness, but Pulliam pleaded guilty before Carter could testify.

Carter, who is a partner in a Washington night club with Holcomb, initially recommended Pulliam for the Jefferson post. Wearing sunglasses and a sport coat, Carter chatted amicably with Pulliam outside the courtroom the final day of the trial.

Carter received a Jefferson loan that was criticized by the bank's auditing committee for being approved by Pulliam without getting board approval. State bank laws require a majority of the board to give prior approval to all loans to directors.

In the case of a $70,000 loan Pulliam approved to a Holcomb business associate, bank officials later discovered that key documents normally required before a loan is made, including a financial statement from the borrower, were not in the bank file. Holcomb ultimately guaranteed the loan, which was later repaid.

On the witness stand at the trial, Holcomb testified that Pulliam was a "very competent" and "very thorough" banker.

Also subpoenaed as a defense witness was former Jefferson branch manager Stephen B. Modly III, the 25-year-old brother of Hogan's wife, Ilona. Pulliam pleaded guilty before Modly, who appeared in court accompanied by his lawyer, was to be called to testify.

Modly now works at John Hanson Savings and Loan, where he was hired by board chairman Dukes.

Two Jefferson employes testified at the trial that Modly often functioned as Pulliam's chief aide while at Jefferson. "Mr. Pulliam . . . always seemed to talk to me through Mr. Modly," testified bank secretary-treasurer Charlotte Hall.

In pleading guilty, Pulliam admitted to conspiring with Gordon R. Butler, a friend and private investigator, to obtain a $25,000 loan by making it in the name of a fictitious person, "Robert L. Baker."

Butler, who became the government's chief witness, testified that he and Pulliam prepared a phony financial statement showing that the fictional "Baker" had a net worth of about $300,000.

Assistant U.S. Attorney James P. Ulwick told the jury that Pulliam used $10,000 from the $25,000 loan and $12,000 from an earlier $15,000 Jefferson loan he made in Butler's real name to help finance Pulliam's interest in a satellite antenna business he was starting.

The $25,000 "Baker" loan was made in May 1981. The scheme was uncovered four months later when another employe checked the loan at Hall's suggestion.

Hall testified that she first became concerned about the $25,000 loan shortly after it was made. She said she noticed that a delay in processing it resulted in no interest being charged for 11 days. Normally, she said, interest charges begin accumulating the day the loan is issued.

"I reported the transaction to Mr. Dukes then Jefferson's chairman because I felt the transaction was out of the ordinary," Hall testified.

"Mr. Dukes . . . told me he would look into the matter," she said. Hall testified that nothing was done to the loan after her conversation with Dukes.

A week later at a staff meeting, Pulliam, according to Hall's testimony, "told me I was not living up to his expectations."

"This was the first time he had brought to my attention that he was not satisfied with what I was doing," Hall testified.

Dukes could not be reached for comment on Hall's testimony. His secretary said Friday that he was out of town for the weekend.

Besides obtaining two Jefferson loans for his share of the satellite antenna business, Pulliam also got the bank to guarantee a loan that was used to finance a share for his partner, Clinton businessman Andre Michaud.

Michaud testified at the trial that he was rejected in his first effort to obtain a $30,000 unsecured loan from a bank to which Pulliam had sent him, the First Commercial Bank in Arlington. But the loan was finally approved after Michaud went back to Jefferson and got a letter from Pulliam guaranteeing it.

The prosecutor said Pulliam acted improperly because he did not have the authority to guarantee a $30,000 unsecured loan. The maximun Pulliam was authorized to loan without collateral was $25,000. So, the prosecutor said, he should have obtained approval from the bank's board of directors.

Michaud invested the money with Pulliam in the satellite antenna business. The loan was later repaid without Jefferson's assistance. During Pulliam's cross-examination, the prosecutor contented that it was a "conflict of interest" for Pulliam to have Jefferson guarantee a loan that helped finance a business he co-owned.

"I don't think that it was," Pulliam testified.