Fugitive Attorney’s Sister Is 12th to Plead Guilty in Alliance Case : Courts: The defendant admits to mail fraud in bill-padding and agrees to testify against her brother and others.

SAN DIEGO —  The sister of fugitive attorney Lynn B. Stites pleaded guilty to mail fraud Wednesday and agreed to testify against her brother and other defendants in “the Alliance” insurance fraud and legal corruption case.

Cheryl Dark of Granada Hills, a paralegal who worked for Stites, pleaded guilty in U.S. District Court to a single count of mail fraud, which carries a maximum sentence of five years imprisonment and a $250,000 fine.

But in a plea bargain with Dark, federal prosecutors agreed to recommend a sentence of no more than six months in custody or home detention in return for Dark’s cooperation as a government witness.

Thirty-six other mail fraud and racketeering counts against her were also dismissed as part of the agreement.

Neither Dark nor her lawyer would comment after the brief court appearance.

Dark was the 12th person to plead guilty. Six attorneys and five other law firm employees have already done so.

Altogether, 25 people have been accused or pleaded guilty in the case, one of the largest criminal prosecutions of lawyers in U.S. history.

At least one more guilty plea is expected before the first of two trials involving nine defendants begins in April. One defendant has died and two are fugitives.

“The Alliance” is a term used by prosecutors for a network of San Fernando Valley and West Los Angeles lawyers who appeared together in numerous civil cases in San Diego, Orange and Los Angeles counties from about 1984 to 1988. Although supposedly battling each other on behalf of individual clients, the lawyers allegedly conspired to expand litigation to bilk insurance companies of millions of dollars in legal fees.

Some clients were paid kickbacks for their cooperation in resisting settlements and prolonging cases, some of those pleading guilty have said.

But Dark admitted Wednesday to the more prosaic act of bill-padding: charging insurance companies for the hours that she didn’t work. Her specific plea involved a bill mailed in November, 1984, that Dark knew to be “false, fictitious and fraudulent,” according to court papers filed Wednesday. Dark worked at the time for the Stites Professional Law Corp., her brother’s firm.

At least twice in November, 1984, the Stites firm billed insurance companies for at least 24 hours of work by Dark on a single day--eight hours billed to three separate insurers, according to billing summaries obtained by The Times. This was discovered when some of the insurers compared notes years later.

Dark told U.S. District Judge Judith N. Keep that on several occasions she questioned her brother about inflated bills but that “he said it was not my business, so I just let it go,” Dark said.

Dark “allowed the bills to go out, and she knew she was part of the scheme,” Dark’s lawyer, Juanita R. Brooks, said.

Stites, the alleged mastermind of the ring, passed his 46th birthday in hiding last week. He was among those charged in a massive indictment last April, but by then Stites had dropped out of sight. He had split his time between houses in the Bell Canyon area of eastern Ventura County and Gstaad, Switzerland. Prosecutors have refused to discuss his whereabouts.