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Man facing BP fraud charges was convicted in Fen-Phen case

Sun Herald, November 4, 2015

By: Robin Fitzgerald

GULFPORT — A sixth defendant in a $2.3 billion BP fraud case has pleaded not guilty to charges similar to his conviction 10 years ago for providing false names for claims against the manufacturer of the diet drug Fen-Phen.

Gregory P. “Greg” Warren’s 2005 guilty plea in the Fen-Phen federal case in Hattiesburg was not mentioned at his arraignment in the BP case Wednesday in Gulfport.

U.S. Magistrate Judge Robert Walker gave Warren, of Lafayette, La., an unsecured bond of $25,000, the same amount for five others already arraigned.

Warren, 51, is owner of IP Development LLC. The business is one of three whose owners reportedly were paid $10 million to provide names and identifying information for possible BP litigation and for bogus disaster-relief claims filed with the Gulf Coast Claims Facility.

The indictment alleges Warren was heavily involved in wire transfers, some of which coincided with his purchases of a 2010 BMW, a 2011 BMW and a 2011 Audi. It also says he paid to lease a building for a K&G Consulting office in Biloxi to help recruit clients.

Warren is among seven people indicted Sept. 15 on 95 charges.

The trial is set for Dec. 7.

Walker on Wednesday said it’s likely defense attorneys will ask for the trial to be postponed. Assistant U.S. Attorney John Dowdy said he is ready for trial but would agree to a delay.

Those indicted include prominent San Antonio attorney Mikal Watts, 48; his brother, David Watts, 50, chief operating officer of the law firm Watts, Guerra and Craft; and Wynter Lee, 37, the law firm’s mass torts coordinator.

Also indicted are Thi Houng “Kristy” Le, 48, owner of K&G Consulting in Pascagoula; Le’s sister-in-law, Thi Hoang “Abbey” Nguyen, 30, of Grand Bay, Ala.; and Hector Eloy Guerra, 48, of Harlington, Texas, and principal owner of JEG Development LLC.

Le’s arraignment is set for Monday.

All seven each face one count of conspiracy and multiple counts of mail fraud, wire fraud, identity theft and aggravated identity theft.

The charges claim they conspired to submit more than 40,000 names of alleged plaintiffs represented by Mikal Watts. He had been appointed to a BP settlement committee but later resigned.

Wire transfers

The indictment alleges Mikal Watts directed a Texas attorney to wire large sums of money to a Jackson attorney, who wired money to Warren to cover costs of obtaining names of potential clients.

According to the indictment, BP claims were filed for only 786 of Mikal Watts’ alleged clients, but his false representation of clients caused BP to agree to pay $2.3 billion through a seafood compensation fund.

One of Watts’ clients reportedly was a dog named Lucy Lu.

A total of 41 claimants listed in the indictment were said to be deckhands or owners of commercial fishing boats, but they weren’t involved in the seafood industry and didn’t know claims had been filed for them, the indictment said.

Only four claimants reportedly were eligible for disaster relief, and four had died before the Deepwater Horizon oil spill in 2010.

The 41 were each approved for payments of about $42,000.

A related lawsuit led to an investigation by the U.S. Secret Service. The lawsuit has been placed on hold pending resolution of the criminal case.

Prosecutors have said it’s the largest identity-theft case associated with BP fraud and one of the largest indictments in the Southern District of Mississippi.

Fen-Phen case

Warren was pastor of Pear Ridge Church of Christ in Hammond, La., in 2005 when he pleaded guilty in the Fen-Phen fraud case.

Fen-Phen and brand name products Pondimin and Redux were taken off the market after the drug was found to cause heart valve problems.

A lawsuit against the drug maker, American Home Products, was prosecuted in Jefferson County.

The lawsuit resulted in a criminal case that led to the disbarment of attorney Robert C. Arledge. Arledge filed claims for people who had never used the drug, an appetite-suppressant.

Arledge’s law firm had hired Warren to solicit clients.

Warren helped Arledge file the claims and the drug-maker later found 82 suspicious claims.

“Warren and several others connected to him had manufactured documents to prove that particular claimants had used Fen-Phen, and sent the claims to Arledge,” said a Supreme Court order on Arledge’s disbarment in 2009.

In 2014, Warren told KPLC-TV in Lake Charles, La., he’d been in the ministry 35 years and had helped oil-spill victims file BP claims.

When asked about the Fen-Phen case, Warren said he “became a government witness and had to testify against some of the people that I worked for.”

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