When psychiatrist Scott Nelson took over at St. Elizabeths Hospital, alarms were sounding. The FBI was investigating allegations of abuse, one of which involved a patient with a broken jaw. Leather restraints were being used on patients in some wards with alarming frequency, hospital officials said. And some staff members were suspected of covering up physical abuse.

"I was appalled to hear of the number of incidents, and some of the severity of the incidents of abuse, and that some managers did not take swift action," Nelson said. "There were just too many patients who were injured that appeared to be from staff handling of the situation."

In response, Nelson and his top administrators said, they have fired several employees for abuse at the District's 680-patient psychiatric facility and dramatically reduced the use of restraints and seclusion rooms. The hospital, he said, has added 118 staff positions, gotten funding for costlier, more effective medications, invited the FBI to train staff members this month in how to deal with aggressive patients, and worked on plans for more intensive staff training.

Nelson became the court-appointed receiver for the city's mental health system in November 1997, after the city failed to make court-ordered improvements for more than two decades.

"I think we've made some considerable progress," Nelson said. "I am very hard-line about people who abuse or are accused of abusing."

Lawyers and advocates for patients say that the situation has improved but that problems remain. On May 24, a 22-year-old patient alleged that two staff members put him in restraints during a confrontation, then kicked him and punched him in the mouth. Last week, a 16-year-old accused a staff member of punching him twice in the mouth while he was being put in restraints, said a lawyer for the group that serves as the hospital's outside advocate for patients.

The hospital said it is investigating the allegations.

Advocates complain that restraints can injure patients. And they say that they sometimes still are used as punishment or treatment, contrary to national standards.

"A lot of people will come to us and say they were harmed while being put in restraints," said Kelly Bagby, managing attorney for University Legal Services Protection and Advocacy Program, the hospital's designated outside patient advocate. "But the majority of allegations of abuse are less serious in nature than in the past."

In October 1997, a nurse bit a patient and was fired, authorities said.

Last year, a mother said she saw staff members slug her 21-year-old daughter in the head and pull her hair as they tried to usher her out of the hospital after she had been discharged but refused to leave, according to a hospital report.

Elizabeth Jones, director of the hospital's noncriminal division, sent the patient a letter of apology and reprimanded four staff members, who denied wrongdoing.

Statistics on abuse allegations before 1997 are not available. In 1997, the hospital's in-house patient advocate received about 20 abuse complaints and confirmed about six cases of physical abuse, Nelson said. Similar numbers were recorded in 1998. So far this year, one allegation of abuse has been confirmed.

Bagby said she gets about one abuse complaint a month, mostly from patients who say they were roughed up while being put in restraints. Some restraints, she said, have been put on so tightly that they cause bleeding.

But she said many patients ask her office not to report abuses to the hospital because they fear retaliation from staff members. Others simply don't bother to report, she said.

Nelson acknowledged the difficulty of proving some allegations because of coverups or conflicting statements between staff members and patients, some with serious illnesses including schizophrenia. Some accusations wind up being false.

"There have been instances where there have been coverups by employees for each other and non-reportings," he said. Few of the allegations ever surface publicly. Even fewer cases evolve into lawsuits. And many of those that do are resolved quietly.

Lawyers said the city often poses an ultimatum: Accept a nominal out-of-court settlement or have the patient risk losing any court award to pay for care. The cost of care is billed at an average of $450 a day. Special Deputy Corporation Counsel Walter Smith said D.C. law mandates that the city go after money awarded patients in lawsuits to cover the cost of their care.

"That is the reason St. Elizabeths doesn't get its butt sued," said John Fatherree, who won a $7,500 out-of-court settlement last year for patient David Heck.

Small settlements, lawyers said, keep lawsuits out of the public eye.

Like many other institutions nationwide, St. Elizabeths has moved to reduce the use of restraints and seclusion rooms. They should be used only after all other methods, including medication, have failed to control patients who pose an immediate danger. Some restraints are put on patients' wrists or ankles, allowing them to move about. In other cases, patients are strapped to a bed. Policy forbids the use of restraints for punishment.

Nelson said he soon will ban the use of restraints as treatment and require a psychiatrist's authorization every four hours, instead of every 24 hours, to keep a patient in restraints or seclusion.

His administrators say that when they arrived, some patients were in seclusion for days, and in restraints for weeks or months. Now, restraints usually are used for hours or days, and seclusion for hours, they said.

Psychiatrist Ray Patterson, the mental health system's director of forensic services since March 1998, oversees John Howard Pavilion, which houses about 230 patients convicted of crimes, or those -- such as John Hinckley, who shot President Ronald Reagan -- found not guilty by reason of insanity. By adding staff members and encouraging alternative methods, Patterson said he has reduced the use of restraints and seclusion rooms by 80 percent in the unit.

The noncriminal unit of the hospital, which used restraints less, has had a decline of about 20 percent, Elizabeth Jones said.

Sidney Brooks, a psychiatrist who was acting medical director at John Howard from November 1997 to March 1998, said staff-on-patient abuse was part of the hospital culture during his tenure.

"It was used as a method of controlling patients and for the staff to exert power over patients," he said.

Brooks said he was "forced out" last year after reporting patient abuse and other improprieties to hospital officials and the FBI. Nelson disputed that but declined to comment further.

"There were circumstances where staff would attempt to provoke patients into physical altercations," Brooks said.

When Nelson arrived at St. Elizabeths in late 1997, the FBI was probing six allegations of abuse. Last spring, the Justice Department, without public explanation, concluded there was insufficient evidence to file criminal charges.

In the midst of the probe, in October 1997, an internal hospital memo, written by an administrator and obtained by The Post, raised concerns about possible coverups. "The inconsistencies in staff reporting suggests a `cohesiveness' that clearly is meant to obscure external review," the memo said.

One of the six cases involved patient JC Womack, who alleged in a lawsuit that a nurse's aide tossed a sheet over his head and punched him in the mouth, breaking his jaw in two spots, during a 1996 incident in which his legs and one hand were tied to a bed with black leather restraints. The punch came, the lawsuit said, after Womack had thrown his lunch on the floor and spat at the aide, who Womack said had kicked him the day before.

Womack, who was convicted of murder in 1973, settled the lawsuit out of court for $10,000. The aide denied breaking Womack's jaw, saying only that as he restrained him, he slipped a sheet over his head to shield himself from Womack, according to a lawsuit document. The hospital moved to suspend the aide without pay for 30 days, according to a court document, but the suspension was reversed on appeal.

In another case investigated by the FBI, patient David Heck alleged in a lawsuit that a staff member slugged him repeatedly in the face on July 6, 1996, as he was escorted to an isolation room after striking another patient. Heck, who was found not guilty of robbery by reason of insanity, lost two lower teeth.

The hospital cleared the staff member of wrongdoing, according to the lawsuit, which alleged the case reflected a pattern of coverups at John Howard Pavilion. Attorneys for the hospital disputed that in a court brief, saying that from June 1995 through June 1998, administrative or disciplinary action was recommended in 12 of the 19 complaints filed.

Nelson said he's pleased with progress in preventing physical abuse, but added: "I wish I could say it's completely gone. We've got 2,200 employees, and not everybody is up to speed. My goal is that everyone who works for us knows what patient abuse is and is not doing it and not covering it up."

CAPTION: Scott Nelson, receiver for the D.C. mental health system, said he was appalled by evidence of abuse of patients.