Informant in Lawyer Fraud Case Is Himself Indicted in U.S. Court : Crime: Prosecutors say he took part in an insurance-bilking scheme before going to authorities.

A network television reporter last year introduced a San Diego lawyer 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 CBS-TV’s “60 Minutes” was the highlight of attorney Leonard 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, was indicted Tuesday in San Diego on racketeering and mail-fraud charges.

Some of those whom Radomile implicated took comfort in the fact that he shared their fate. “Mr. Radomile is not lily white,” a lawyer for one of his co-defendants said in an interview.

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 has recently refused requests for interviews. But his lawyer, John Heisner, said Radomile is outraged.

“Leonard made the case,” he said. “I can’t wait until we get all these facts out and demonstrate what Leonard’s role was. If anything, he was a victim of the Alliance and, like a good citizen, brought the crime to the attention of the government, who then used him in an undercover capacity.”

Federal prosecutors declined to discuss details of Radomile’s cooperation. But the indictment charges that he illegally profited from the scheme before volunteering himself as an informant.

According to Radomile and government sources, he went to federal officials in Los Angeles in 1987, without requesting or receiving immunity. The indictment accuses him of taking part in the scheme in the prior two years, 1985 and 1986.

There have been rumors of negotiations in which Radomile has steadfastly refused to make a deal in which he would have acknowledged some culpability. If true, that suggests the government believed it could not ignore acts he committed before blowing the whistle, regardless of the risk that a jury would see its treatment of a key informant as ruthless.

Radomile, whose story emerged from legal depositions over the past several months, was briefly married to televangelist Terry Cole-Whittaker, the bubbly former Mrs. California who coined the slogan “Prosperity, your divine right.” He served as chief executive of the Cole-Whittaker ministries before their marriage broke up in 1984.

The events leading to his indictment began the next year, when Radomile became acquainted with Los Angeles attorney Lynn Boyd Stites, the alleged mastermind of the Alliance, 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 had 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 was familiar with the litigation and 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.

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

Over time, Radomile said, he grew uncomfortable with the arrangement. His case had not been quickly dismissed, and he was also 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, Radomile testified.

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

Stites had boasted of getting huge referal 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.

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, insurance industry sources alleged.

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.