Lawyers for Maryland attempted to show today that former top officers at Community Savings & Loan tried to shield one of the thrift's subsidiaries, the EPIC real estate syndication group, from the state's efforts to marshal the thrift's assets for depositors.

The Maryland Deposit Insurance Fund, the state agency acting as conservator of the Bethesda thrift, has alleged that in August -- two weeks before the foundering thrift was taken over by MDIF -- Community officials transferred EPIC stock that belonged to a Community subsidiary to the thrift's parent company, EPIC Holdings Inc.

According to testimony today from Dennis Sweeney, a deputy attorney general, the stock transfer was not mentioned by Community officials during the court hearing Sept. 5 when the thrift was placed in conservatorship. The Community officials reversed the transaction the following day.

The testimony today came in a hearing before Baltimore City Circuit Court Judge Joseph H.H. Kaplan. The state is suing former EPIC chairman Tom J. Billman and former EPIC president Clayton C. McCuistion, charging that they and eight other defendants used Community's assets to fund their real estate empire.

Lawyers for MDIF are asking Kaplan to bar the defendants from removing or transferring any of their assets in EPIC, Community or any of their subsidiaries, beyond funds needed for normal business and living expenses.

Today's testimony was meant to bolster MDIF's claim that action by Kaplan is needed because in the past the defendants have tried to "manipulate assets." MDIF maintains that there is reason to fear that the defendants will engage in further complex transactions to hide assets that could eventually go to the state if it wins its suit.

Sweeney testified that state officials did not know that on the day of the conservatorship hearing in Montgomery County, the defendants placed 341 of EPIC's real estate partnerships in bankruptcy in a court in Alexandria. Lawyers for the defendants told state officials of the bankruptcies only after the hearing in Montgomery was over, Sweeney said.

Lawyers for the defendants have argued that the partnerships were placed in bankruptcy to protect them, not to keep them at arm's length from the conservator. While questioning Sweeney, they suggested that state officials had expressed relief when they learned about the bankruptcy petitions Sept. 5.

In August those partnerships defaulted on $1.4 billion in mortgages, jeopardizing funds of thousands of investors. A group of major EPIC creditors is working on a plan for reorganization of EPIC and hopes to have the bailout plan set by an April 30 deadline.