Richard W. Gartin, 42, of Timonium, Md., a former Chessie System executive, pleaded guilty in Baltimore yesterday to embezzling nearly $3 million from the railroad.

Gartin, former director of freight claims, admitted submitting bogus vouchers for more than seven years that claimed that freight was damaged by the Baltimore & Ohio Railroad, one of the companies operating under the Chessie name.

Gartin entered guilty pleas to charges of theft and taking property under false pretenses.

Assistant State's Attorney David Palmer said he will recommend, under a plea bargaining agreement, that Gartin be sentenced to five years in prison and make full restitution to the railroad system.

Circuit Judge Edgar Silver set sentencing for Sept. 10.

Palmer, reading a statement of facts after Gartin's plea, said the defendant was able to use his position to bypass normal channels of validating claims.

All claims for damages against the railroad from $5,000 to $100,000 went through Gartin, the prosecutor said, noting that all the bogus vouchers fell in that range.

Gartin, who was fired Feb. 11, confessed to prosecutors on the night of his arrest, authorities said. The embezzlement allegedly occurred from 1977 through last February. Court records showed he spent $628,000 on race horses, and purchased condominiums in Florida and Hawaii, a $17,000 diamond ring for his wife, a 1983 Mercedes Benz and a 1984 Porsche.

Prosecutors documented $2,983,429 in stolen B&O funds.