Ringleader Convicted of 13 Counts in Fraud Case : Crime: Former fugitive Lynn Stites faces a lengthy prison term for his role in insurance scheme.

Lynn Boyd Stites, the central figure in the “Alliance” insurance fraud and legal corruption case whose colorful odyssey as a fugitive ended last year in a speed trap, was convicted Thursday of 13 felony charges in U.S. District Court in San Diego.

Stites, 48, who formerly practiced law in Woodland Hills and West Los Angeles, was found guilty of racketeering and of a dozen counts of mail fraud, thus becoming the 13th lawyer convicted in the Alliance case, one of the largest prosecutions of attorneys in U.S. history.

After deliberating 3 1/2 days, jurors acquitted Stites of 13 other mail fraud counts, but returned a special verdict allowing the government to seize up to $50 million of his assets. The amount--deemed to be proceeds of racketeering activity--was the government’s estimate of insurance industry losses resulting from the scheme.

“I’m very satisfied with the verdict in all respects,” said assistant U.S. Atty. William Q. Hayes.

Defense attorney Thomas A. Mesereau Jr. said Stites “is very disappointed” but “believes that in the long run justice will prevail.” Several evidentiary and pre-trial rulings provide a strong basis for appeal, Mesereau said.

Stites, who will remain in custody pending sentencing in January, may face a long prison term. The racketeering charge carries a maximum 20-year sentence, and each mail fraud conviction is punishable by up to five years in prison. The stiffest sentence in the case so far has been 46 months in prison.

Prosecutors portrayed Stites as the mastermind and chief beneficiary of the so-called Alliance , a ring of Los Angeles-area attorneys the government accused of defrauding the judicial system along with the insurance industry.

The lawyers infiltrated complex civil litigations in Los Angeles, Orange, and San Diego counties in which insurance companies were obliged to pay legal fees for customers who were sued. They took pains to prolong and expand the suits--working together to resist settlements and manufacture new legal controversies so the cases would grow in size and cost.

Among their tactics was the paying of kickbacks to clients so they would be content to remain defendants rather than resolve the claims/

Between 1989 and 1991, a dozen attorneys and six law firm employees and clients pleaded guilty or were convicted in the case. Four other lawyers were acquitted.

Stites was indicted in April, 1990, but remained in hiding until his arrest last November after an Illinois state trooper who had stopped him for speeding spied a pile of cash in his car.

It later emerged that while underground, Stites had proposed marriage to two women under different names and had bought a string of yachts in Florida, conducting negotiations under aliases to create the impression of two buyers.

He reportedly used a phony help-wanted ad to obtain false identities, tricking applicants into sending birth certificates and other documents to get a security clearance.

During the four-week trial, prosecutors also tried to show that Stites, while in hiding, filed a false insurance theft claim for a boat that was never stolen.

Mesereau said Stites’ case was unfairly prejudiced by this and other testimony that was not pertinent to the charges against him. Chief defense counsel Jennifer Keller sought to convince jurors that Stites’ prosecution was politically inspired and that insurance companies were using the government to crush one of their most effective opponents.

The only remaining Alliance defendant is his former bookkeeper, Roberto Rufino. Rufino also disappeared at the time of indictment and has not been found.