A 54-year-old Silver Spring man, who in the early 1970s was described by prosecutors as one of the two largest drug dealers in Washington and one of the largest dealers on the East Coast, was arrested yesterday and charged with heroin distribution after he allegedly sold seven ounces of highly potent heroin to an undercover FBI agent.

William E. (Dog) Turner of 225 Hermleigh Rd., Silver Spring, was arrested in the driveway of the Margaret M. Amidon Elementary School at Fourth and I streets SW.

He was charged with distributing drugs within 1,000 feet of a school. The charge carries a mandatory minimum prison sentence of 20 years and a fine of up to $8 million upon conviction. The maximum sentence is life in prison.

An FBI spokeswoman said D.C. police officers helped FBI agents arrest Turner, a longtime figure in heroin trafficking here. Turner was convicted of tax evasion in 1973 in Baltimore and of narcotics conspiracy charges in New York in 1976.

During the Baltimore trial, prosecutors linked Turner to a massive heroin importation ring that, during the closing years of the Vietnam War, brought large quantities of the drug into this country in the body bags of dead servicemen.

The heroin ring was believed to be one of the largest in the world, with more than 100 servicemen or persons impersonating servicemen who worked in the worldwide military transportation network.

Three other Washington area men who were linked to that heroin ring were arrested here last year after they were indicted in New York in connection with a new drug ring that was allegedly importing large quantities of heroin from Thailand.

Prosecutors said during Turner's Baltimore trial that he was to have been the recipient in 1970 of a nine-kilogram shipment of heroin that arrived at Walter Reed National Army Medical Center in a medicine container from a hospital in Thailand.

Also, Turner was convicted of heroin possession in federal court here in 1970 after he and two other men twice sold heroin to federal undercover narcotics agents in a downtown motel.

According to evidence presented at the trial, the heroin operation in which Turner was involved had been selling as much as 40 kilograms of heroin a week to dealers in Northwest Washington.

According to the criminal complaint filed yesterday in U.S. District Court, Turner met undercover FBI agent John W. Brown III at the Amidon school about 11:30 a.m. Turner gave the agent about 200 grams of a white powder, which later tested positive for heroin, according to court papers.

Turner was arrested while he sat in Brown's car as the undercover agent went to the trunk of the car to get $56,000 he was to pay for the heroin. Sources said the heroin is believed to be more than 80 percent pure.

Few additional details of Turner's arrest or his recent activities were available last night. Sources said Turner's house was searched yesterday after his arrest, but details of items seized were not available.

Turner, who is on parole until 1991 from the D.C. conviction, told court officials that he is unemployed. U.S. Magistrate Jean F. Dwyer ordered Turner held without bond pending a pretrial detention hearing set for Friday.

The FBI spokeswoman said the investigation is continuing, and sources said more arrests are expected.