NY- The fugitive dubbed the "Lolita lawyer" for paying a Manhattan mom to have sex with her two teen daughters was caught yesterday in an East Village hotel room with his pants down - thanks to the Daily News.

James Colliton, 41, had checked into the St. Marks Hotel Thursday under the name Patrick Monsey, but his cover was blown by his own stupidity - and by yesterday's front page of The News, which prominently featured his picture.

Colliton tried to update his hotel registration yesterday using a different phony name, Patrick Waters, immediately raising the hotel clerk's suspicions.

"The [hotel] clerk was alert," said Manhattan District Attorney Robert Morgenthau. "He thought he [Colliton] looked like the picture on the front page of the Daily News, and he called the police."

At least nine detectives from the 9th Precinct raced to the hotel at St. Marks Place and Third Ave. and found Colliton in Room 26 alone, wearing only a T-shirt.

"I want my lawyer!" Colliton repeatedly demanded.

One detective replied, "How about your pants first?"

Cops found a bag in the room stuffed with $9,990, in mostly $50 and $100 bills, and 21 American Express $100 gift cards.

"He was absolutely rattled," said a police source. "His hands were shaking."

The arrest came a day after authorities admitted Colliton - who had been arrested last week in Toronto - was freed Tuesday by U.S. Border Patrol agents because of a delay in updating the status of his New York warrant.

Prosecutors claim the lawyer kept his wife and five kids in Poughkeepsie in the dark about his alleged secret life as a Jaguar-driving sex maniac who bedded girls in his secret E. 56th St. lair. "She didn't have a clue he was doing this," a source said of Colliton's wife.

A stunned neighbor of Colliton in Poughkeepsie added, "I always thought of them as a tight-knit family."

To his colleagues at the top-flight midtown firm of Cravath, Swaine & Moore, he was a respected tax attorney earning an estimated $500,000 a year. He has since been fired from the firm.

The two sisters, who claimed their mother pimped them out to Colliton when they were just 15 and 13, were relieved to hear he was in custody.

"I want him to be in jail forever," one of the victims, now 21, told The News yesterday.

But the girls claim other underaged teens were also in Colliton's sick harem, and prosecutors were trying to determine if other men were involved.

"There were about seven to 10 girls. They were young, too, when they started," said the victim.

The girls said that when they told a social worker for the city's Administration for Children's Services Feb. 7 what Colliton and their mother were up to, they never expected their mom to get arrested.

"She's done wrong, but I don't hate her," the victim said.

But the girls' 38-year-old mother, who is charged with promoting prostitution and child endangerment, told The News her daughters were lying.

"I'm innocent and I'm going to prove it because the police don't know anything," said the mother, whose name is being withheld to protect the identities of her daughters, now considered sexual assault victims.

"I'm terrified to do time for something I didn't do.," she said yesterday in a jailhouse interview at Rikers Island, where she is being held on $100,000 bail. "My only hope is that my daughters tell the truth."

But the daughters insisted yesterday that their mother - who faces up to 15 years in prison if convicted - is a pimp and Colliton is a pervert.

"He's very manipulative," the older sister said of Colliton. "He would keep trying to convince me to commit more [sex] acts for more money. He said my mother needed money and I could split it with her."

The girl said she was Colliton's paid sex pet from 2001 to 2004, when her 13-year-old sister took her place with their mother's urging.

Colliton was arraigned in Manhattan Supreme Court on charges of second-degree rape, patronizing prostitutes and bribing witnesses. He faces up to seven years in prison if convicted.

"These allegations are false. Mr. Colliton never had sex of any kind with anyone underage," said defense attorney Alan Abramson.

But prosecutors said the facts suggest Colliton used his wealth to manipulate "impoverished young girls" for his pleasure.

Prosecutor Rachel Houchhouser's request that Colliton be jailed at Rikers Island without bail was granted after she told Justice Charles Solomon the suspect tried to bribe his victims into keeping quiet.

"He encouraged them and promised them things for lying to authorities," Houchhouser said.