JUSTICE : Defense Probe Gathers Steam : The Ill Wind investigation so far has collected $24 million in fines and penalties. More indictments are expected.

The government’s Ill Wind investigation of Pentagon procurement fraud, responsible so far for convictions of 39 defense executives and consultants, former government officials and corporations, is on the verge of another spurt of activity.

As soon as next month, some individual and corporate targets are expected to decide whether to plead guilty or face indictment and full-scale trials. Meantime, a spinoff investigation dubbed Upwind that involves Armand D’Amato, brother of Sen. Alfonse M. D’Amato (R-N.Y.), is picking up steam before a federal grand jury in Brooklyn.

BACKGROUND: Launched several years ago, Ill Wind focuses on efforts by U.S. defense firms to obtain classified government documents that helped them win lucrative contracts. In many cases, the companies paid fees to consultants and Pentagon officials to obtain the information.

Ill Wind already has set new standards for scrutiny of white-collar crime, including an unprecedented number of FBI agents fanning out across the country to conduct near-simultaneous searches as the investigation moved from covert to overt status in June, 1988.

So far, the effort has generated $24.4 million in fines, jail terms, forfeitures, civil penalties and other recovery. More important than the “cost effectiveness” of the searches and surveillance, prosecutors believe the convictions, penalties and disclosure of shady dealings have sent a clear message to the contracting community.

OPPOSING FORCES: Critics contend that investigations such as Ill Wind at most have a transitory impact, because the cases have not led to barring of defense contractors from doing future business with the Defense Department. The Pentagon believes debarment could injure national security by disqualifying key weapons suppliers and that punishment should be left to the courts.

With 10 to 12 federal prosecutors working full time on Ill Wind, the investigation eventually could achieve the 100 convictions that Henry E. Hudson, U.S. attorney in Alexandria, has long predicted.

Two key targets of the probe--Melvyn R. Paisley, a former assistant secretary of the Navy, and Victor D. Cohen, a former senior Air Force procurement officer--appeared to be heavily implicated when a defense consultant pleaded guilty to bribing them to help his clients win lucrative military contracts.

The consultant, William M. Galvin, was praised by prosecutors for his “extraordinary cooperation” and drew a 32-month prison sentence--at least 19 months less than that recommended by federal sentencing guidelines.

CURRENT SITUATION: But eight months have passed since his guilty plea, and no charges have been filed against Paisley and Cohen.

Paisley’s lawyer, E. Lawrence Barcella, acknowledged that he has had discussions with Joseph J. Aronica, the lead prosecutor, but said Paisley continues to maintain that he did not abuse his office.

Cohen’s lawyer, Julian Greenspun, discounted the prospects for any kind of plea bargaining, saying he has not talked recently with prosecutors.

Sen. D’Amato’s brother Armand, a Mineola, N.Y., attorney, is under scrutiny for $70,000 in consultant fees paid to his law firm by Unisys, a leading corporate target of the Ill Wind investigation.

Investigators suspect that the payments were compensation for Armand D’Amato’s help in getting Sen. D’Amato’s office to urge that Unisys be awarded a contract.

Armand D’Amato did not return a reporter’s calls. Sen. D’Amato heatedly denied the allegation, calling it “a retread” and saying the appeal from his office on behalf of Unisys was made “in the normal course of business.” He noted that Unisys is an employer in his state and that he has been willing to fight for any constituent company.