Testimony Implicates Lawyers in Fraud Case : Trial: The eight attorneys--five from the San Fernando Valley--face long prison terms if convicted.

A star prosecution witness Monday implicated all eight attorneys on trial in “the Alliance” insurance fraud and legal corruption case, testifying that they took part in an elaborate scheme to reap millions of dollars in legal fees for frivolous litigation.

The idea was that “we should do whatever was necessary to avoid settlement” of cases, said former attorney Marc I. Kent of Granada Hills, who earlier pleaded guilty in the case and resigned from the State Bar.

The eight lawyers--five from the San Fernando Valley--are charged with mail fraud and racketeering and could receive long prison terms if convicted. Fourteen other people--eight of them Los Angeles-area lawyers--earlier pleaded guilty in the case, described as one of the largest criminal prosecutions of attorneys in U. S. history.

In wide-ranging testimony leading off the third week of the federal court trial, 42-year-old Kent told of serving as a top lieutenant for fugitive attorney Lynn B. Stites, the alleged mastermind and chief beneficiary of the Alliance scheme.

Kent said the lawyers paid kickbacks to clients so that they would be content not to settle the lawsuits against them. And he told how Alliance members in a string of cases recruited other lawyers to sue their clients--even drafting the lawsuits for them.

The bearded, balding Kent, who took the stand Friday and concluded his direct testimony late Monday, is expected to come under withering cross-examination today.

The lawyers are accused of infiltrating or initiating at least 10 civil litigations in San Diego, Orange and Los Angeles counties in which insurance companies had to pay defense fees for policyholders who had been sued. The lawyers allegedly used a variety of tactics to prolong and expand the cases, including paying kickbacks, conducting needless depositions and filing cross-claims against each others’ clients.

The defendants say they were zealous advocates for their clients and did nothing wrong. They claim that the real culprits were those who cut deals with the government, dropped out of sight, as did Stites, or were not charged in the first place.

Kent said he became involved with Stites in 1984 after recovering from a cocaine dependency that had left his modest practice in a shambles.

Much of Kent’s testimony Monday concerned wrongdoing by himself and others who earlier pleaded guilty. But he provided particularly damaging testimony against defendant Leonard Radomile of La Jolla, a former Kent client and the only one of the eight lawyers who is not from the Los Angeles area.

Radomile, acting as a secret informant for the government and insurance companies in 1987-88, had provided damaging information that helped drive Kent into the government’s clutches. After his plea-bargain, Kent returned the favor, providing grand jury testimony that contributed to Radomile’s indictment.

In his testimony Monday, Kent said that in 1985, he began paying Radomile $10,000 per month for the right to defend him at insurance company expense in the Willow Ridge litigation, a huge Los Angeles case in which Radomile had been sued.

At one point, Kent testified, Radomile “tried to jack me up for $15,000 per month,” but Kent said he refused.

Kent said Radomile carried on a pretense of doing legal work for Kent to sanitize the payments. He said Radomile “was always devising ways to justify my kickback to him” in case it should ever be discovered.

Kent also said Radomile referred several cases to the Alliance, including the Amgo and Syndico litigations in San Diego--both efforts by investors to recover losses from failed investment ventures.

In both Syndico and Amgo, Kent said, the Alliance recruited the plaintiffs’ lawyers who sued the clients of Alliance members. Kent said attorneys with his law firm and the Stites firm, assisted by Radomile, drafted the actual complaints filed against their clients. Three of the Amgo and Syndico plaintiff attorneys have pleaded guilty in the case and the fourth, Monty G. Mason II of Sherman Oaks, is on trial.

Kent also read a letter, introduced as an exhibit, in which Radomile put the value of the Amgo case at $30 million. “I can’t wait until we get our hands on” the case, the letter said.

“You can imagine how that feels to sit through something like that,” Radomile said to a reporter during a recess.

Kent also told of Stites’ irritation when Woodland Hills lawyer Lewis M. Koss, one of the defendants, revealed to a client named Barry S. Marlin how much Marlin’s lawyers were billing to defend him.

Marlin, a convicted swindler and defendant in the Willow Ridge case, was receiving a monthly kickback of $25,000 per month, Kent said. But after Koss, defending one of Marlin’s corporations, disclosed the size of the billings, Marlin demanded and began receiving $50,000 per month.

Stites was “very upset because this was costing Mr. Stites the extra $25,000 per month,” Kent said.

Kent has pleaded guilty to two mail fraud counts and faces a maximum sentence of 10 years in prison and a $500,000 fine. But in a brief cross-examination late Monday, it was disclosed that Kent’s deal ultimately gives prosecutors--and not a judge--the power to determine his sentence.

Asked by Koss’ defense attorney Bradley Brunon if his testimony was “motivated by what the government’s holding over your head,” Kent responded: “Motivated by the truth, sir, and that’s the only thing I’m motivated by.”