‘Undercover Agent’ Is Among Lawyers Indicted in Fraud : Insurance scheme: He first reported the ‘Alliance’ to authorities and secretly taped conversations, but is now accused of having profited from the scheme.

A network television reporter last year introduced a lawyer from San Diego to 33 million viewers as the “undercover government agent” who “infiltrated the Alliance”--a group of Los Angeles-area lawyers accused of manipulating lawsuits to defraud insurance companies of huge legal fees.

The interview by Mike Wallace of “60 Minutes” was the highlight of attorney Leonardo T. Radomile’s presentation of himself as a daring crime-buster, a white-hat who went to the authorities as soon as he learned he had wandered into a nest of crooks.

The government has a different version.

Along with 17 other alleged members of the so-called Alliance, Radomile, 43, who customarily goes by the name Leonard, was indicted in San Diego Tuesday on racketeering and mail fraud charges.

“Mr. Radomile,” a co-defendant’s lawyer said, “is not lily-white.”

But if the tale of Radomile-as-hero was not complete, neither did the indictment tell the whole story.

In fact, Radomile did work secretly with the government. He first reported the Alliance to federal authorities. And he, along with two clients, gathered evidence by secretly taping conversations with members of the group.

Radomile “was the one who brought the case forward,” a federal investigator said. Insurance lawyer Larry Nokes said he “played a very major role in knocking the wheels off” the scheme.

Radomile’s lawyer, John R. Heisner, said his client was outraged at being indicted.

“Leonard made the case,” he said. “I can’t wait until we get all these facts out and demonstrate what Leonard’s role was.”

Without mentioning his role as informant, the indictment charges in effect that he had already profited from the scheme when he blew the whistle.

He went to federal officials in Los Angeles in 1987, without requesting or receiving immunity. The indictment accused him of taking part in the scheme before this.

Radomile was “trying to beat the bad news home,” one insurance industry lawyer theorized. He said Radomile was bright enough to realize the scheme would come unraveled and “the smart place to be was outside of the network.”

Radomile, whose story emerged from legal depositions over the past several months, is a slim, handsome man of considerable charm and intelligence. He was schooled in the use of television before he starred on “60 Minutes.” He was briefly married to televangelist Terry Cole-Whittaker, the bubbly former Mrs. California who coined the slogan, “Prosperity, your divine right.” Radomile served as chief executive of the Cole-Whittaker ministries before their marriage broke up in 1984.

The events leading to his indictment began the following year, when Radomile became acquainted with Los Angeles attorney Lynn Boyd Stites, the alleged mastermind of the Alliance who was also indicted Tuesday.

Radomile had just been dragged into the Willow Ridge litigation in Los Angeles, a series of lawsuits aimed at recovering funds from investment promoter Barry S. Marlin, for whom Radomile had worked briefly in the 1970s. Soon after Radomile learned he’d been sued, Stites’ law firm called with an offer to defend him, Radomile said in a deposition last summer.

According to Radomile, Stites said he could persuade the other lawyers to drop him from the case. Stites was also certain he could get Radomile’s legal fees paid by insurance companies that had insured Marlin’s businesses, Radomile said. Based on these promises, Radomile said, he hired Stites.

A short time later, Stites turned Radomile over to a friend, former Studio City attorney Marc I. Kent. Stites explained that he could not represent Radomile due to a conflict of interest because he previously had another client in the case. Kent would be counsel of record, and Stites would work with him behind the scenes, Radomile said he was told.

Over time, Radomile said, he grew uncomfortable with the arrangement. He said he was concerned about the chumminess of some of the lawyers, whose clients were opposing each other in Willow Ridge and several other cases. It appeared they were going out of their way to make these cases infinitely complex and expensive, so that “a bit at a time what were just normal cases started to turn into Fellini movies,” Radomile testified.

About Christmas, 1986, Radomile went to see Stites to demand an explanation. He said Stites warned him not to make trouble.

Stites had boasted of getting huge referral fees from some of the other lawyers. So Radomile was shocked, he said, when Stites showed him sworn declarations in which the same lawyers denied, under penalty of perjury, having a financial connection with Stites.

In essence Stites was saying, “I completely control these people. . . . Don’t toy with me because I can get them to swear to anything that I want and, you know, you open your mouth, and I’ll bury you,” Radomile said.

Stites even suggested he was a master puppeteer who had arranged for Radomile to join the Willow Ridge litigation. “ ‘God, the Willow Ridge cases. You think that stuff’s for real?’ ” Radomile quoted Stites. “And then he laughed . . . and he literally leaned over and patted himself on the back,” Radomile said.

By his account fearful and angry at being muscled by Stites, Radomile soon took his story to the U.S. attorney in Los Angeles.

During the summer of 1987, he and two of his clients wore hidden devices to tape conversations with Stites and others. The tapes captured attorneys discussing kickbacks to clients and efforts to control both sides of lawsuits to assure huge billings to insurance companies, according to well-placed sources.

That was Radomile the white-hat. But earlier, according to the indictment and sources familiar with the litigation, he had helped the lawyers infiltrate cases and had gained from his dealings with the network. In the Willow Ridge case, for example, insurance companies paid Radomile $585,000 to settle a cross-complaint filed by Kent on his behalf, according to insurance industry sources.

And for a time when Kent handled Radomile’s insurance-paid defense, Kent was paying Radomile about $10,000 a month, informed sources said. Kent pleaded guilty to mail fraud in October, admitting among other things that he and other Alliance lawyers paid kickbacks to some of their clients for the right to defend them at insurance company expense. Radomile has said the payments were for legitimate work.

Upon pleading guilty, Kent surrendered his law license and became a star government witness. As a government informant, Radomile had helped bring down Kent. Tuesday’s indictment suggests Kent returned the favor.

Radomile never let on that he was in danger of prosecution.

For instance, he taunted two lawyers--Alan Arnold of Woodland Hills and Lewis M. Koss of Calabasas, both indicted Tuesday--in a deposition taken in July.

They were defending a fraud suit filed by an insurance company against Stites and others. Radomile was being examined as a potential witness. When the pair asked tough questions, Radomile warned they were messing with the wrong man.

“Wait until the grand jury hands down the . . . indictments,” he said. “I’ve been a good government agent. They now have a warehouse full of documents that will put you guys in jail.”

LAWYERS INDICTED

A U.S. grand jury indicted 14 attorneys on charges of defrauding insurance companies. B1