Fen-Phen Phonies Plead Guilty

Three people who received portions of a $400 million settlement with the manufacturer of the diet drug fen-phen have pleaded guilty to charges they lied about taking the drug.

The three entered the pleas Tuesday and agreed to cooperate with authorities investigating the 1999 settlement. Each was accused of receiving at least $250,000 from the settlement after submitting false prescription records, netting about $150,000 after attorney fees.

Regina Green, 56, and Lizzie Hammett, 52, pleaded guilty in federal court in Jackson to one count each of tax evasion. John Frye, 60, pleaded guilty to one count of tax evasion and one count of conspiracy to commit wire fraud.

They were charged with filing 2000 tax returns without listing the settlement money. Officials said that money is taxable if it is obtained fraudulently in medical cases.

Each faces a maximum sentence of five years in prison and a $100,000 fine. Frye faces an additional five years in prison and $250,000 fine on the conspiracy charge. The three also agreed to forfeit property purchased with settlement money.

Attorney Wayne Dowdy, who represents Green and is a relative of John Dowdy, said his client admitted making a mistake and is cooperating with authorities.

Hammett's attorney, William Baxley, described his client's situation as "unfortunate."

Frye's attorney declined to comment.

The three were free on bond awaiting a Dec. 3 sentencing. They were among 12 people arrested in the case last month. Charges are still pending against the other nine defendants.

American Home Products made Pondimin, the fenfluramine half of fen-phen, and Redux, a chemical cousin. About 6 million people took the drugs before they were pulled from the market in 1997 amid evidence they caused heart-valve damage in some patients.