Ex-House Aide to Plead Guilty in Bank Scandal : Congress: Jack Russ, former sergeant-at-arms, admits cashing bad checks. Prosecutors may seek his help in other inquiries involving lawmakers.

The former House sergeant-at-arms has agreed to plead guilty to three felony charges of embezzlement, fraud and filing a false report to Congress in connection with the House bank scandal, the Justice Department said Tuesday.

Jack Russ has acknowledged embezzling $75,300 from the now-defunct bank, which he had supervised, by cashing 17 checks there in 1989 despite knowing he did not have enough in his account to cover them, the department said.

He also has admitted bilking investors in his flag-stand manufacturing business of $445,000 by using company funds for his personal expenses and filing false financial statements with Congress in 1989 to conceal $221,125 in debts from his check-cashing and investment diversion practices.

A Justice Department spokesman said that Russ would enter his guilty plea in federal court within the next few days. He faces up to 20 years in prison and nearly $1.6 million in fines.

Federal prosecutors clearly hope that the enormity of the potential penalties will persuade Russ to cooperate in other cases of alleged congressional wrongdoing in exchange for a reduced sentence.

Among the cases in which Russ could be useful is that of Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee. Russ was a longtime associate of Rostenkowski, who is alleged to have illegally traded stamps for cash at the House post office in a case under investigation by a grand jury.

Rostenkowski, who backed Russ in his bid for the sergeant-at-arms post in 1983, has denied wrongdoing. When told of Russ’ plea-bargain agreement, Rostenkowski reportedly said only: “Poor Jack.”

Rostenkowski’s chief accuser, should the grand jury return an indictment, is expected to be former House Postmaster Robert V. Rota, who in July pleaded guilty to embezzlement in an agreement that is believed to point to Rostenkowski’s involvement.

Russ was previously called to testify in the post office inquiry and may be summoned again.

Russ has spent most of his adult life on Capitol Hill, beginning as a doorman in 1967 and working his way up the patronage ladder to become sergeant-at-arms. In that post he supervised the House bank, which routinely covered the overdrafts of hundreds of House members totaling millions of dollars.

The practice was based on the theory that since the bank existed for House members only, the writing of overdrafts amounted to no more than advances against paychecks--or informal interest-free loans among Congress members.

Russ, who resigned as sergeant-at-arms during the height of the controversy in March, 1992, has kept a low profile as his attorneys negotiated the plea-bargain agreement with the Justice Department.

Times staff writer Ronald J. Ostrow contributed to this story.