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Mississippi fen-phen scandal



What did the lawyers know, and when did they know it?

Lawyers for clients involved in fraudulent diet drug claims are under scrutiny in the ongoing FBI and Internal Revenue Service investigation for what, if anything, the attorneys knew about those false claims.

Of the 1,500 Fayette residents who made diet drug claims, less than 50 were legitimate, said Eva Johnson, one of 16 who have pleaded guilty in connection with the fraud.

Fake claims included prescriptions from dead doctors, medication from closed pharmacies and dates for using the drug before it even came on the market.

Two nonlawyer employees of a Jackson law firm have been indicted on fraud charges, and one has pleaded guilty. In addition, a Vicksburg lawyer has denied as "a complete and utter falsehood" statements by a ringleader in the scheme, Regina Green, that he had told her that prescription labels cited as evidence of having taken the drug would be boxed up in a place where no one would see them; the faking of such labels was a key step in the fraud.

Because federal authorities have no direct evidence at this point tying lawyers to the fraud, authorities are examining whether to pursue the case under the legal theory of deliberate ignorance, regularly given as a jury instruction in federal court in Mississippi as "willful blindness" of an individual, often someone in power.

Similar language was used to help convict former WorldCom CEO Bernie Ebbers, who testified he knew nothing about chief financial officer Scott Sullivan's manipulating the company's books to make it meet profit projections. Sullivan testified Ebbers did know. The judge allowed jurors to consider "conscious avoidance," if they believed Ebbers turned a blind eye to the crime.

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.