BERKELEY HEIGHTS, N.J. (AP) _ Disciples of an 1,100-member religious sect are practicing ″subtle brain- washing,″ moving into this quiet suburb in droves and gaining control of the local Roman Catholic church and school, alarmed parishioners say.

People of Hope subordinates its women, discourages social contact with non- members, arranges marriages and moves teen-age disciples to ″households″ for indoctrination, charges Janice Ross, founder of Concerned Citizens of Berkeley Heights.

But the Rev. Pierce Byrne, pastor of Little Flower Church, members of the Catholic-based sect and Catholic officials say the People of Hope, which has 1,100 followers throughout the state, is recognized by the church.

″It’s a group within a group,″ said Michael Hurley, a spokesman for the Archdiocese of Newark. ″It’s a legitimate Catholic charismatic community.″

Mrs. Ross’ group has called for the ouster of Byrne, pastor of the church for eight years, claiming he has allowed the sect to misuse parish funds for its segregated activities.

″They are sort of like fundamentalists or pentecostalists and their treatment of women is very Islamic,″ Mrs. Ross said Tuesday. ″From what ex- members tell us, it’s a form of subtle brain-washing.″

About 200 residents opposed to People of Hope demonstrated Sunday outside the church. The controversy prompted Bishop Dominic Marconi, vicar of Union County, to organize a special church committee to look into the dispute.

Letters from Marconi to the 1,300 families who attend Little Flower were mailed Tuesday, outlining a plan to ease what Byrne called a misunderstandi ng.

Since 1982, the number of People of Hope families living in this community of 17,000 residents has grown from 10 to 80, and the sect’s leaders have built seven spacious homes on 90 acres they purchased in neighboring Warren Township.

The group has flooded the Little Flower School with its children, opened a high school in Warren where 85 sect students are enrolled, and its members have established a foothold in the business community.

Sect members include an attorney, a construction company owner and an accountant. Last month, a member opened up a real estate business.

Residents said they are concerned because the group uses financial leverage to entice people into its fold, then prevent them from leaving.

As an example, Mrs. Ross said, well-to-do members of the group help others buy houses and thereby keep the new members indebted to them. And she said that young couples and teen-agers whose parents live some distance away move in with other families and are subjugated by church coordinators.

″It’s unbelievable how sheepish these people are,″ said Jack Riley, another parish member with children at Little Flower School. ″The wives of the coordinators are called ’handmaidens.‴

Riley said the group is driving down property values and going door-to-door to ask people if they want to sell their houses.

Jack Costanzo, spokesman for the sect, denied allegations that the group is seeking political power.

″I don’t think it necessary for small groups of Christians to band together to influence the political structure in the town in which they live,″ Costanzo said. ″We’re all Roman Catholics. We differ in the sense that we are a charismatic group, which would mean that we have prayer meetings, during which there is raising of hands, singing and speaking in tongues.″

Costanzo also denied that the group holds secret meetings or engages in financial improprieties. He said the group’s finances are audited by the archbishop’s office.

He did acknowledge that unrelated sect members live together, but said that only lasts for short periods.