A retired policeman testified today that a robbery suspect at a High's Dairy store staked out by members of the so-called police "death squad" in Prince George's County in 1967 had "almost a sadistic look" as he aimed his pistol at another officer, prompting the first officer to shoot and kill the suspect.

As the suspect raised his pistol toward an officer posing as a clerk in the store, retired Capt. Lawrence R. Wheeler told a federal jury, his facial expression "changed. . . It was a smile, but it was a weird type smile, almost a sadistic look. . . That's when I believed he was going to shoot."

Wheeler, hidden in the rear of the store with a 12-gauge shotgun, said he shouted an order to halt and the suspect, later identified as William H. Matthews, 18, turned toward him.

Both he and Matthews fired, he said. "Either he fired first or I fired first or we fired simultaneously."

When it was over, Matthews was dead on the floor of the High's store at 9101 Riggs Rd. in Adelphi.

Wheeler and other officers staked out in the store were not hit.

Wheeler's testimony came as three police defendants in a $9 million civil rights trial here continued efforts to show that two fatal shootings and several arrests made in a series of stakeouts in 1967 were justified.

Families of the two slain suspects as well as two men arrested in the incidents are suing three members of the alleged "death squad," including Joseph D. Vasco Jr., currently the second highest ranking official in the county police department.

The three are accused of directing police informants to recruit participants for the series of five robberies and burglaries and then lying "in ambush" for them, in violation of their 14th Amendment right to due process.

The three, along with other members of the police department's Hyattsville detective bureau in 1967, were known among some in police circles as the "death squad."

Police have denied the allegations, maintaining the informants came to them with tips about planned crimes and that police then routinely staked out the targeted stores. They contend they fired in self defense in the Matthews shooting on June 8, 1967, as well as in the shooting of William C. Harris, 25, at a 7-Eleven store holdup on Nov. 26, 1967.

Under cross examination today by plaintiffs' attorney Barnet D. Skolnik, Wheeler acknowledged that he could not know "for sure" what Matthews' strange smile indicated and that it might have been in response to a comment by another suspect in the holdup.

Also, said Skolnik, "You don't know, do you, if the one shot that Mr. Matthews did fire was the result of an intention by him or by his right forefinger jerking convulsively from the impact of Wheeler's shotgun blast?"

"I don't know," said Wheeler. ". . . There's no way of knowing."