Trial of 8 ‘Alliance’ Lawyers Presents a Different Kettle of Fish : Justice: Whether innocent or guilty, the defendants were minor figures compared to the insurance-fraud scheme’s ringleaders, who are all ‘fled, pled or dead.’

When a crime ring is broken, the testimony of small fish is often used to net the big ones. But the usual pattern has been reversed in the “Alliance” insurance-fraud and legal-corruption trial, where closing arguments are scheduled to begin today.

Whether the eight lawyers on trial are innocent or guilty, prosecution testimony has shown that they weren’t part of the inner circle of fugitive attorney Lynn Boyd Stites, the alleged mastermind and prime beneficiary of the Alliance scheme. Their main accusers, however, include top Stites lieutenants who pleaded guilty to lesser charges and became government witnesses.

The ringleaders are all “fled, pled or dead,” grumbled Bradley William Brunon, defense counsel for Lewis M. Koss of Woodland Hills, one of the defendants.

Indeed, circumstances have transformed this from a trial of Stites, his top lieutenants and lesser associates, to a trial of the lesser associates.

Stites himself has been a fugitive for more than a year, disappearing shortly before he and 17 others were indicted in April, 1990. Stites’ bookkeeper Robert Rufino, who also was indicted, also fled and is rumored to be in the Philippines.

Stites lieutenant Alan Arnold, a Woodland Hills lawyer, died a month after the indictment. Several other top Stites aides--including law-firm administrator Suzanne L. Rubin, Stites’ sister and paralegal Cheryl Dark, and lawyers Marc I. Kent and Gregory S. Bodell--plea-bargained with the government and spent the trial pointing fingers at those they say they recruited for the scheme.

Government witnesses have described secret “directors” or “controllers” meetings at which Stites and trusted aides worked out plans to control and manipulate specific litigations. Decisions were made about how lawsuits would be phrased to trigger insurance coverage and which lawyers would defend which clients.

If attendance at the meetings distinguished the leaders, those on trial may have been no more than fringe players. Prosecution witnesses Rubin, Kent and Bodell attended directors meetings. The defendants, according to testimony, did not. The secretive Stites allegedly worked through intermediaries, taking pains to keep his minions from knowing it was he who sent them clients. As a result, defendants claim, they were unaware of his scheme and not knowingly part of it.

“It is somewhat unusual,” said Peter Arenella, a UCLA law professor and expert on criminal law. “Usually the government goes after lower-rung types and works up the ladder,” he said.

It’s more common to “use little fish to get the big fish,” agreed Robert Garcia, a former assistant U.S. attorney in New York and now a professor at UCLA.

But “every prosecutor’s dream is to get somebody high up the ladder that will cooperate with the government and help prosecute as many individuals as possible, Garcia added. “I certainly don’t think it’s a question of fairness.”

Prosecutors declined comment, saying they would not discuss the trial while it is in session.

Seven of the eight lawyers are from the Los Angeles area, and five are from the San Fernando Valley. All but one is charged with racketeering, and all face multiple mail-fraud counts.

Fourteen people--eight of them attorneys--pleaded guilty prior to the trial, which began April 15.

The government contends the lawyers defrauded insurance companies of at least $50 million in fees for frivolous or phony litigation.

From about 1984 to 1988, they allegedly infiltrated or initiated at least 10 civil litigations in San Diego, Los Angeles and Orange counties in which insurance companies were obliged to pay defense fees for policyholders who had been sued. In some cases, Alliance lawyers allegedly recruited plaintiffs’ attorneys to sue their own clients.

They are also accused of resisting settlements and creating work for one another by conducting needless depositions and filing cross-claims for damages against one anothers’ clients. Some allegedly paid kickbacks to their clients so they would be content to remain defendants.

According to prosecutors, Stites essentially franchised the litigation, providing several of the lawyers with start-up funds, insured clients and legal advice in return for a cut of their insurance billings.