William C. Sibert, described by his coworkers and neighbors as a heavy-set, "very likable" GS-5 who reviewed grant applications for the Department of Transportion, began showing up for work in new suits about two months ago.

Next, he began bragging about his new Lincoln Mark V Continental and the new Mercedes he had bought his wife. Then, he began inviting everyone in his office to go to lunch with him - his treat - at restaurants along the wharf in Southwest Washington.

That was too for his superiors, who began an investigation into Sibert's sudden affluence. Unknown to them, the Secret Service and the FBI already had begun a similar probe based on tips from informants about Sibert's spending sprees.

Last Friday the 30-year-old Sibert, who lives in Clinton Md, was arrested and charged with embezzlement of government funds when he arrived in Las Vegas with $59,000 in cash. He is currently being held in Nevada on $100.000 bond but has agreed to return to the District voluntarily to face prosecution.

Federal agents are attempting to determine the exact amount of money Sibert allegedly stole from the government. The agents say they have accounted for $850.000, which Sibert is alleged to have spent over the last two months on a fleet of at least 12 luxury cars. A new house with a swimming pool and the purchase of a topless bar about one block from FBI headquarters here.

Investigators said they also had impounded a 30-foot houseboat Sibert had purchased recently, and had also learned of extensive recent real estate purchases by Sibert here and in the Western United States. "We're finding more property by the hour," one agent said.

Arrested with Sibert in Las Vegas Friday was Lois A. Benson, 30, of 4703 Health St., Capitol Heights, Md. She was released on personal recognizance and ordered to report to D.C. to face charges.

Also arrested Friday was Sibert's wife, 23, who lives at the family home in Prince George's County. Charges against Mrs. Sibert were dropped yesterday, however.

Detailed affidavits filed in support of Sibert's arrest outlined a scheme in which he would divert to his own personal band account Urban Mass Transit Administration money allegedly intended for the Atlanta subway system.

Another affidavit filed after the arrest and authorizing a search warrant for three rooms rented by Sibert at the Capitol Hilton Hotel at 16th and K Streets Nw stated that Sibert admitted the embezzlement scheme to FBI agents after he was arrested in Las Vegas.

Sibert reportedly told the agents that he had about $20,000 in negotiable securities, including ITT and IBM stock and bonds, in the hotel's safe deposit box, and that there was additional cash and jewelry in the three rooms there.

In addition, the affidavit said, Sibert told the agents he had three automobiles parked in the hotel garage and that the cars - including a Lincoln convertible - had been purchased with stolen money. FBI agents said yesterday they were still rounding up additional cars Sibert had purchased recently.

Sibert, who began working with UMTA about four years ago as a G-2 clerk, is alleged to have stolen at least the $850,000 since May 19.

He reportedly would use his position to generate vochers by which the Treasury Department would be authorized to issue checks to the Metropolitan Atlanta Rapid Transit Authority.

His supervisor would approve the vochers and return them to Sibert, federal sources said.

The federal sources said Sibert would then use razor blades and tape to alter the approved vochers so the checks issued by Treasury would be mailed to Sibert in his name instead of to MARTA.

The checks, one of which was for $300,000, would then be deposited in a bank account he had opened at the Suburban Trust Co. branch in Suitland, where he had told bankers he was a self-employed contractor who received grants from DOT, agents said.

William Boswell, UMTA's associate administrator for administration, said yesterday that "a lot people had respect for Sibert's knowledge" and abilty to do his job as a contract review officer. Basically, Sibert's job was to review awards of UMTA money to state and local goverments and make sure the underlying contracts were mathematically correct and met goverment standards, UMTA officials said.

Boswell, who said he had talked to Sibert only three or four times over the past four years or so, said Sibert had the reputation of very "very impressive, very likeable, a pretty sharp guy."

But, Boswell said coworkers became suspicious a few weeks ago when Sibert began showing signs of sudden wealth.

"I said, "That's enough for me. Let's start an investigation', " Boswell said. He said he had no doubt but that the alleged fraud scheme would have been discovered "sooner or later, " see how the scheme was able to work as long as it did.

Sibert reportedly told a neighbor that he had won a large settlement in a lawsuit Sibert claimed to have filed against two security guards who he said beat him. The amount of the settlement reportly varied from $100,000 to $1 million, depending on whom Sibert was describing it to.