The Jefferson Bank and Trust Co. has faced one serious problem after another since it was formed 21 months ago by a group of financially aggressive and politically influential businessmen in Prince George's County.

First, federal examiners reported that nearly 40 percent of the bank's $8 million in loans were unacceptably risky.

Then, state examiners charged that the bank was operating in an "unsafe and unsound" manner with "intolerable" violations of banking laws. They recently ordered it to shape up or face court action, a government ultimatum that has been delivered to only a handful of Maryland banks in the last 10 years.

Agents from the FBI entered the bank last fall and carted away all its loan files. Their probe led to the indictment last week of the bank's former top loan officer on charges of benefiting from a fraudulent loan. A second bank official resigned from the Capitol Heights bank after it was discovered that he had improperly altered loan records.

Internal disputes led to the resignation of five of the bank's 18 original directors, some of whom reportedly quit over their concerns about the Jefferson's loan policies.

Jefferson's directors believe they can overcome their difficulties, as they promised in an agreement they signed with the state last week. Maryland's banking commissioner, J.R. Crouse, said after the agreement was signed that the state's actions against the bank were simply to correct operational weaknesses. Crouse said the bank had adequate capital to operate.

Still, the events at Jefferson reveal how a bank--holding a community's earnings and confidence but cloaked from public view by the code of secrecy that surrounds financial institutions--can get into trouble when directors and stockholders use it for their own purposes.

Founded by a group of Prince George's political figures and businessmen, Jefferson's problems have emerged from a style of banking typified by board chairman Charles Dukes' statement: "Any bank that isn't making bad loans isn't making enough loans."

The original investors, including board chairman Dukes, Prince George's Executive Lawrence Hogan, and liquor board member Gerard Holcomb, who were stockholders, not directors, left another bank because they felt the board was too conservative in its loan policies. Jefferson was launched, and its organizers were soon boasting about how fast its assets had risen from $2 million to $14 million.

But beneath the surprising growth there were problems.

A two-month investigation of Jefferson by The Washington Post found that nearly half the problem loans, some $1.5 million, went to friends and associates of stockholders and directors. In addition, large numbers of loans weren't being repaid and the bank suffered from poor internal controls and incomplete loan records.

The people and companies with connections to the bank who received loans from it included:

* Two small construction companies that used the loans in part to buy land from board chairman Dukes and his former law partner Stephen J. Troese. The two firms received a total of $383,000, nearly 5 percent of all the money loaned by the bank. Land records show that Dukes and Troese sold the land to the two companies for $100,000. Dukes' indirect interest in the loan was not clearly disclosed to the full board, according to several directors.

* Bank director Riley B. Carter II, Pulliam and Holcomb, who received a $25,000 loan to help finance a closed-circuit broadcast of a fight. The loan was made without disclosure to the full board, in apparent violation of banking laws.

* A close business associate of Holcomb, JoAnn Chiacchieri, who received a $70,000 loan without providing the bank with credit information or security after Holcomb introduced her to bank officials.

State Sen. Tommie Broadwater Jr., who obtained a $150,000 loan from Jefferson and was delinquent on the loan almost immediately. In addition, County Council member Floyd Wilson, a Dukes client, got a $3,500 unsecured loan, which he did not repay on time, and several other political figures received loans from the bank, sparking charges by some directors that Jefferson was attempting to curry favor with politicians.

* The developers of a major urban renewal project in the District, Bates Street, who obtained $75,000 despite an earlier decision by the board against lending money to the developers. The turnabout occurred without the full board being notified and after the developers became partners with two longtime clients of Jefferson's chairman of the board.

* Marcus Dasher, the District government official responsible for overseeing fund disbursements to Bates Street, who received $6,000 from Jefferson. The bank was forced to file suit when he did not make any loan payments.

* Gamblers, convicted felons and several possibly nonexistent people, according to loan lists and a bank audit report.

Jefferson's problems first surfaced publicly last October when bank officials accused Pulliam, the top officer below Dukes, of improperly getting $10,000 of a $25,000 loan he made to a friend and business associate. The bank called in the FBI and bank examiners to investigate.

The allegations against Pulliam sparked an intensive review by the bank's three-member audit committee of all transactions, and within days they had found problem after problem buried in the maze of confidential bank files.

A combined audit by state and federal examiners uncovered even more severe trouble. The number of loans with problems was so high that if none of them could be collected, an unlikely outcome, the bank might not have enough money left to pay off all its depositors and Federal Deposit Insurance Corporation funds would have to be used.

Alarmed by what they found, the bank regulators unleased some of the strongest weapons they possess to force the bank to operate properly. Last week Jefferson's directors signed an agreement to comply with bank laws and correct all problems. In addition, the bank has brought in new professional management that is working to improve things.

Dukes, a portly man with a soft North Carolina accent who recently was appointed chairman of the Prince George's County Planning Board, has said that the audit committee and bank regulators were being overzealous. "The impression is that this is a wild little bank doing strange things," said Dukes, adding that the impression was false. The fact that the loans were criticized, he said, does not mean the bank will lose any money. In fact, Dukes said, most of the problem loans will be brought up to standard or collected.

Dukes and his associates have said that Pulliam, 37, is the primary cause of Jefferson's troubles. "No one has ever raised the issue to me that anyone used the bank for themselves other than Pulliam," said Dukes.

Pulliam has told friends and authorities that he is being made a scapegoat.

A close look at several of the major problem loans indicates that the troubles at Jefferson have involved more than the actions of one official.

The Land Deal

Dukes and Troese had owned dozens of lots in an area of Oxon Hill known as Tor-Bryan Estates since 1977. They had been unable to sell them off to builders as quickly as they had hoped, however, and were thus forced to pay interest on what was intended as a short-term development loan. "We've been living with that nightmare down there for six years," Troese said.

In late 1979 and early 1980 Troese, Mark S. Morgan, a 27-year-old builder, and Andre Michaud, a local businessman, set up two construction companies. The two companies, A.M.S. Development Company and Mark III Contracting Company, decided to develop Tor-Bryan. Needing loans, they turned to Jefferson, where Dukes was chairman and Troese at the time held stock, and to John Hanson Savings and Loan, where Dukes was also chairman.

The companies had limited assets, but over the next eight months they were given $383,000 by Jefferson, most of which went to buy and build Tor-Bryan. The amount was above the legal limit for the bank, a point later criticized in the bank audit.

Morgan, president of both companies, said that part of the money from Jefferson was used to purchase the land from Dukes and Troese. According to land records, A.M.S. and Mark III paid Dukes and Troese $100,000 for the Tor-Bryan property. The full board was never informed of Dukes' interest in Tor-Bryan, nor was it told that the loans to Mark III and A.M.S. would in part go to buy the Tor-Bryan land from Dukes and Troese, according to several directors.

Dukes said he does not remember whether he told his board about his relationship to the development in Tor-Bryan. He said he relied on Pulliam, the bank's top full-time banker, to let him know when to disclose. Dukes said he recalled little about the loans except that Pulliam had consulted him before making the loans. He said he felt that if Troese was involved the bank's investment would be sound.

After the loans were made, Mark III and A.M.S. had trouble making all their payments. Nearly half of the money given to the two companies--$141,176--ended up on the FDIC's problem loan list. Morgan said the late payments were caused by a sluggish housing market. He added that he is now closing out the Jefferson loans.

The Fight Broadcast

A loan to bank director Riley Carter, Pulliam and Holcomb raised questions within the bank because disclosure requirements were not followed.

In late 1980, Carter, a Washington nightclub owner, Pulliam and Holcomb, the president of John Hanson Service Corporation, received a $25,000 loan guarantee from Jefferson to help finance a closed-circuit television broadcast of the Sugar Ray Leonard-Roberto Duran fight.

The guarantee was in the form of a letter of credit to the fight promoters stating that Jefferson would pay them $25,000 on demand. The letter of credit permitted Carter's group to make a down-payment on paper only without having to put up cash until the fight actually took place.

The loan was approved by Pulliam and never went to the board of directors for their approval as required by state law, according to directors, who said they only found out about it months later. State banking laws require a majority of the board to evaluate and give prior approval to all loans to directors and officers.

Other investors in the fight broadcast were Prince George's Executive Lawrence J. Hogan and his wife Ilona and Richard A. McCaleb, a convicted gambler who served time in prison after pleading guilty to a cocaine smuggling charge in 1977. The Hogans bought $2,500 of Holcomb's interest in the unsuccessful business deal. They and Holcomb said they were unaware of the involvement of McCaleb, who bought his share from Carter.

When the promoters of the fight used the letter of credit to get the required $25,000, Jefferson was immediately reimbursed by Carter from a savings account he had at the bank.

The Restaurant Loan

In the $70,000 loan to Holcomb's business associate, JoAnn Chiacchieri, Jefferson abandoned accepted banking practices by granting her credit without first obtaining necessary financial information or security.

Chiaccheri had been trying for three years to start an Italian restaurant, Filomina, in Georgetown and had obtained an SBA-guaranteed loan from American Security Bank. Still, a year ago Chiacchieri found she needed more money and turned to Jefferson at the suggestion of Holcomb, who had advised her in the past, and would later become involved with her and Riley Carter in a Washington bar, Bronco Billy's Good Time Saloon.

In October 1980, Chiacchieri was given a $70,000 letter of credit--a loan guarantee that the bank is forced to honor--by Tom Pulliam after Holcomb called Pulliam on her behalf. A year later, after Pulliam was forced to leave the bank, Jefferson paid the $70,000 to Chiacchieri's bank, American Security.

At this point, bank officials discovered that key documents were not in Chiacchieri's file; there was no financial statement and no security for the loan in case she did not repay it. Pulliam also violated bank policy by not getting prior approval from the board --the $70,000 was almost three times more than Pulliam was allowed to authorize on unsecured loans on his own. But the directors only learned about the Chiacchieri loan after the bank was out $70,000.

While the bank attempted to build a loan file for Chiacchieri, Holcomb, who according to bank records said he had put $350,000 into the restaurant enterprise, agreed to personally sign as a guarantor for the $70,000 debt. At the same time, Chiacchieri submitted the required personal financial statement.

Dukes said that Jefferson is in the process of being reimbursed.

The Broadwater Loan

Jefferson made its loan to Prince George's Sen. Tommie Broadwater Jr., a Democrat who represents the county's predominantly black Glenarden area, despite reservations by several board members.

Broadwater had had little success trying to finance his Chapel Oaks Farmer's Market before he came to Jefferson in early 1981. "I was shopping for money," Broadwater said. "Jefferson was a new bank and I went there."

The state senator also knew several directors of the new bank, including Dukes, developer Kenneth Michael and zoning attorney Russell Shipley. Among the stockholders, Broadwater knew both Holcomb and Hogan. In 1981, when Broadwater approached Jefferson, he made his request for a $150,000 loan directly to Dukes. "I had to meet with him. He's the one who took me through," Broadwater recalled. When the loan went before the board of directors, objections were raised by some directors who felt the loan was too risky, and that Broadwater's ability to repay such a large loan was not certain.

"This is a black. This is politics," one director recalled being told at the board meeting. "He Broadwater wouldn't 've gotten it if he wasn't who he is."

Broadwater, who was delinquent on the loan but is now repaying it, said he was not given special treatment by the bank. Dukes said that the Broadwater loan, which was on the FDIC's problem list, was not too risky. "We attached everything we could get our hands on," he said.

The Bates Street Loan

The developers of Bates Street, George Holmes Jr. and Jack W. White, approached Jefferson for a $150,000 loan for the downtown urban renewal project. The bank's board of directors turned it down because of concerns about Holmes and White's ability to repay the money.

Five months later, Holmes and White came back to the bank, looking for $75,000. In the intervening months the two developers had formed a partnership with two long-time clients of Dukes--Clinton real estate investors John Haley and Dennis Makielski.

Holmes and White got the loan this time. The full board was not consulted. Pulliam, after conferring with Dukes, approved the loan.

The board did not learn of the $75,000 loan until months later when it became delinquent and the bank had to file a court suit against White and Holmes to collect. Dukes said he knew about the loan before it was made because Pulliam had called to tell him about it. "He Pulliam wanted to know if it was all right to make the loan ," Dukes recalled. He said he told Pulliam to make the loan once he heard that Haley would guarantee it. He also noted that Haley and Makielski had added financial strength to the Bates Street project.

Dukes said he later learned that Pulliam had failed to get Haley's guarantee in writing, but that the omission was not of major concern since Haley is a man of his word and has subsequently promised to honor his verbal commitment to the bank.

As it turns out, the D.C. Housing Department, as overseer of the Bates Street project, has agreed to repay the debt, according to Dukes. City officials recently said no final decision had been made.

A city official who supervised the project, Marcus Dasher, got an unsecured $6,000 loan from Jefferson a year ago. According to a court suit filed by the bank, Dasher has not made any payments on the loan. Dasher could not be reached for comment, but Dukes said he talked to Dasher and the city official has agreed to repay it.

Official Resigns

Stephen B. Modly III, the 25-year-old brother of Hogan's wife, Ilona, had been hired when the bank opened and had moved up quickly from teller to branch manager.

Last fall the bank auditing committee found that Modly had altered a loan document to cover up a late payment. The payment on an SBA-backed loan for a District restaurant owned by bailbondsman Mickey Lewis, had come in late. Modly altered the records to make it appear the loan had been paid on time, thus helping Lewis avoid potential problems with the SBA.

The bank directors decided to allow Modly to go on paid leave and then resign. A few weeks later he was hired as a branch manager by John Hanson Savings and Loan at Dukes' suggestion and began appearing on a television advertisement for the savings association.