BALTIMORE, NOV. 17 -- Four former owners of Merritt Commercial Savings & Loan Association went on trial today on federal fraud and racketeering charges, as a defense attorney blasted the case against them as a "collection of cheap shots, half-truths, misstatements and utter nonsense."

Gerald S. Klein, Baltimore real estate dealer and principal owner of Merritt, and three others are charged with conspiring to defraud Merritt depositors by luring them with nationally advertised promises of high-interest accounts but concealing that much of the money was being used to "invest in highly speculative insider transactions."

According to a 91-page indictment against the men, millions of dollars worth of loans were made by Merritt to various projects, including grain and pig farms on the Eastern Shore controlled by Klein and an associate, Robert V. Gibbs, but the loans were issued without adequate collateral, accurate appraisals or standard documentation.

Merritt's financial woes helped trigger Maryland's savings and loan crisis in 1985. The 40-count indictment is the first brought by federal authorities in continuing state-federal investigations of the S&L industry's collapse.

Federal prosecutor Robert J. Mathias told the jury in an opening statement that Klein and his three codefendants "looted the savings and loan" of $45 million for their own benefit and kept their actions a secret from Merritt's depositors.

Lavishing "insider loans, exorbitant fees . . . and expensive perks" on themselves, Mathias said, the four men drained depositor accounts, "finagling, cheating . . . and lying to make it appear that Merritt was financially healthy, whereas in reality it was nothing more than a black hole."

Klein's attorney James P. Ulwick, blasted the prosecution's case and said that lending money "to make a profit is not a crime."

If convicted, the four face stiff prison sentences, plus possible forfeiture, under a special racketeering law, of some or all the $45 million in alleged "ill-gotten gains" from Merritt.

The trial before U.S. District Judge Frederic N. Smalkin is expected to last up to three months.

In addition to Klein, 46, the defendants are Gibbs, 45, a New Jersey resident who sold his 50 percent interest in Merritt to Klein in late 1984; Eugene Hettleman, 64, a Baltimore lawyer, who acted as legal counsel to Merritt until he sold his 10 percent interest in the S&L to Klein and Gibbs in 1982, and Milton Sommers, 62, of Baltimore, former president of Merritt who also sold his 10 percent to Klein and Gibbs in 1982.

Today, Mathias told the jury the prosecution will show that the flow of money simply went "from the depositors to Merritt to the defendants," and the depositors were never given accurate information in required financial condition reports about the "negative net worth" of the S&L.

Ulwick and Gibbs' attorney, Gerald Houlihan, countered that Merritt was financially healthy until the collapse of the state savings and loan industry in neighboring Ohio in January 1985 and other events triggered a silent run and then a public panic in Maryland, throwing Merritt and other state-insured S&Ls into chaos.

Merritt entered into voluntary conservatorship in May 1985 and was later bought by Chase Manhattan Bank. Merritt depositors' accounts were frozen for some time. While they recovered their accounts after the Chase Manhattan purchase, they lost money in dalayed and reduced interest payments.

Ulwick said Klein and the other defendants cannot be convicted unless it can be shown that information they reported about Merritt's financial condition was false and that the four men knew it was false.

Old Court and First Maryland Savings & Loan of Silver Spring were ordered into receivership. Their assets are being sold to help recover depositors' funds, and several Old Court officers, including former president Jeffrey A. Levitt, have been convicted in state court of stealing millions of dollars from the S&L.