Former Houston police chief Carrol Lynn was sentenced to 12 years in federal prison and five years' probation for his conviction in a bizarre extortion scheme against a local oilman.

U.S. District Court Judge Carl Bue also assessed a $10,000 fine against Lynn, to be paid during the probationary period. Lynn's attorney promised a "lengthy appeal" of the conviction.

"I'm not afraid," Lynn calmly told reporters after the sentencing. "I'm an innocent man and this is still America."

Lynn, who had been heralded as a "reform" police chief just five years ago, was arrested by FBI agents last April 11 outside the home of Houston oilman John Holden with $25,000 in marked bills in his pocket.

Federal prosecutors contended that Lynn had asked for the money in exchange for his influence in persuading local U.S. Attorney J. A. Canales to drop a federal mail fraud investigation of Holden.

Lynn's arrest came just a few days after Holden's attorney, Gerald Birnberg, was slightly wounded by gunfire as he fled from two men who attacked him at his front door. The gunmen have never been identified.

Holden testified Lynn told him the day after Birnberg's shooting that the assailants were "hit men" in the employ of Leonel Castillo, director of the U.S. Immigration and Naturalization Service and the former Houston city controller.

Six months before Birnberg's shooting, Lynn had told Holden and Birnberg that he had used his friendship with Castillo to persuade Canales to drop the securities investigation of Holden, the oilman said.

At that time, Holden said, Lynn had asked him for "45 big ones," or $45,000, to be paid to the go-between he and Castillo had used to persuade Canales to drop the investigation.

Castillo, who has denied any involvement in the alleged extortion plot, said he told Canales about the story after a friend of attorney Birnberg's confronted him with it. Canales, in turn, took the matter before a federal grand jury last January.

Oilman Holden said that police chief Lynn told him Castillo had ordered lawyer Birnberg shot because of the grand jury investigation and because he and Holden were dragging their feet in paying Castillo's go-between.

Holden and Birnberg testified they arranged for the FBI to tape-record subsequent conversations with Lynn in which they agreed to give Lynn $25,000 in exchange for his influence in calling off Castillo's "hit men."

Lynn, a 22-year veteran of the Houston police force, tesified he concocted the story about Castillo's "hit men" as a cover for his investigation of Birnberg's shooting.

He said he suspected that Holden had ordered the shooting and hoped to draw Holden into an admission by using the false story. He denied ever offering to help quash the securities investigation of Holden.

The foreman of the jury that convicted Lynn of extortion, perjury and two counts of obstructing justice called Lynn's testimony "ridiculous."

The sentencing is the latest episode in Lynn's slide from power. In June 1975, he resigned after 18 rocky months as police chief and was appointed an assistant chief by his successor.

That fall from power came during a near-mutiny by the officers in his command, who were angered over his use on them of secret tape-recording equipment to gather evidence of alleged illegal wiretapping within the department.

Lynn continued to serve as an assistant police chief until his arrest, last April, when current chief Harry Caldwell removed the badge from the handcuffed Lynn's suitcoat.

His arrest shocked former mayor Fred Hofheinz, who had appointed Lynn police chief over the heads of a number of ranking officers.

If the charges against Lynn were true, Hofheinz said, "it clearly indicates to me that the man does not have all his sanity. I don't remember the man who served as my police chief as a man of that character."

During the trial, J. L. Patterson, an electronics expert and former associate of Lynn's, testified that Lynn had attempted to involve him in a plot to burglarize the police property room in late 1976.

Patterson was subsequently indicted for plotting the burglary, which never occurred, but the indictment against him was later dropped.

Patterson said that Lynn planned to use the proceeds from the buglary to finance assassination attempts against his enemies.

Although the names on the alleged "hit list" were never disclosed, sources close to the case said the list allegedly included local Sheriff Jack Heard, with whom Lynn had clashed while chief, and B.G. (Pappy) Bond, who succeeded Lynn as police chief.

Lynn testified that both the burglary and the "hit list" were Patterson's ideas, and that he never plotted any burglary nor planned to kill his "enemies."