An initial court hearing for Clayton Police Chief Frank Winters and his wife, Bernice, charged last week with stealing $150,000 from Mothers Against Drunk Driving, has been canceled while prosecutors prepare the case for a Gloucester County grand jury.

Peter Aseltine, a spokesman for the New Jersey Attorney General's Office, said that a Municipal Court hearing originally scheduled for today would not be held because of the planned grand jury proceeding.

Aseltine said Municipal Court appearances are routinely waived in cases involving indictable offenses.

Last Tuesday, the Winterses were charged with conspiracy and theft by deception in what New Jersey Attorney General Stuart Rabner described as a scheme to siphon funds from various chapters of MADD around the state.

Both Frank, 60, and Bernice Winters, 56, were active members and had served on several boards with the volunteer organization before stepping down three years ago.

The Attorney General's Office has alleged that between 2001 and 2004, two companies the couple owned were involved in the bogus sale of $150,000 worth of souvenir trinkets, such as key chains, pens and pins to MADD chapters.

Prosecutors contend 80 checks were issued for items that were never delivered. Instead, authorities alleged, Winters and his wife used the money for personal mortgage, car and credit-card expenses.

Frank Winters denied the allegations last week. He did not return phone calls to his home yesterday.

The veteran law enforcement officer was suspended without pay from his $86,800-a-year post as head of Clayton's 15-member police department shortly after Rabner detailed the charges during a news conference last week in Trenton.

On Friday, Winters announced he was resigning as a member of Borough Council in the small Gloucester County town of Newfield, where he and his wife live.

In a letter to Mayor Joseph Curcio, Winters said he did not want the negative publicity surrounding his case to be a "distraction."

"We're still in a state of shock," Curcio said yesterday. "We're all still hoping it's not true."

As a member of Borough Council, Winters served as the town's public safety director.

He is the second Newfield public safety director in the last two years to step down under a cloud. Last year, Alfred Buono 3d was forced out after he was indicted over allegedly providing false information to the county Probation Department.

Authorities charged that Buono sent a letter under phony public safety department letterhead falsely asserting that his son had completed a community service program following his conviction for a disorderly persons offense.