An invitation to the monthly open house at the Croy Thoroughbred Syndicate office in downtown Rockville was billed as a chance to rub elbows with an exclusive circle of investors, sip wine and perhaps own a piece of a sleek four-legged dream.

The company's president, James Alden Croy, was a smooth talker in cowboy boots, according to one of his guests, and Croy told investors they could amass fortunes by buying shares in his prize-winning stable of Kentucky thoroughbred breeding horses.

It sounded too good to be true, and, according to Montgomery County police, it was.

Friday night, Croy, 48, was arrested for allegedly bilking 150 people out of at least $400,000 over the past six months in what police said was a phony thoroughbred investment deal.

Although the breeding horses -- Enchanting Flair, Final Rinse, Rash Miss, Candy Maid and three others -- are real, Croy was not their owner, police said.

Police said they arrested Croy after searching his office, his leased 1986 Mercedes-Benz, and safe-deposit boxes and bank records. He was charged with six counts of felony theft, conspiracy to commit theft, and making a false statement to a police officer.

Croy, who declined to comment yesterday, was being held at the Montgomery County detention center in lieu of $205,000 bond.

A police source said Croy has a criminal record dating to 1960 that includes 22 arrests on charges ranging from check and securities fraud to counterfeiting money and postage stamps. Croy has served time in Florida, Kentucky, Kansas, Georgia and Texas, according to police sources.

Croy opened his thoroughbred syndicate in February, a week after being released early on "good time" after serving most of a three-year sentence in federal prison in Kentucky on counterfeiting charges, police said.

Detective Dom Fazio of the county police vice unit, who attended one of Croy's open houses in June as an undercover officer, said Croy's venture used the allure of the sport of kings to attract unsuspecting investors.

According to Fazio, Croy told potential investors that for $3,000 each they could become part owners of one of his world-class mares. The mares were guaranteed to produce one foal a year that would be sold for at least $100,000, Fazio said Croy told potential clients.

Investors were told that the sale of each foal would increase the mare's value and would bring $103 per share in monthly returns and as much as $1,000 a month if the foal became a champion racehorse, Fazio said.

Police said that each investor was asked to pay $1,000 per share as a down payment and to sign a promissory note for $2,000 that was payable in full when the horse died. Also, investors allegedly were obliged to pay a small monthly interest charge on the promissory note.

Fazio said investors were reassured that they would earn back their $3,000 investment because Croy said each horse was insured for $1 million with Lloyds and investors would receive a share of insurance money when the horse died.

For several months, Croy paid dividends to his investors on schedule, using money collected from new investors, Fazio said.

Many of Croy's investors were clients of Almacy, Osterman & Stultz, a Bethesda accounting firm, according to Fazio. But he said police are not sure of Croy's relationship with the firm.

None of the employes of the accounting firm or of Croy's firm has been charged in the alleged scheme, Fazio said. The partners in the accounting firm, John Almacy, James Osterman and Jeffrey Stultz, did not return telephone calls yesterday.

Fazio said police do not know if the unsuspecting investors, whom he described as "upper middle class to wealthy," will get their money back.

"A lot of them said they were shocked, surprised and disappointed, to say the least," Fazio said.