so what is the point of a psuedonymn, anyway?

First there was James Frey now there's this:

The New York Times June 21, 2007

At Trial, Writer Recalls an Alter Ego That Took Over

By ALAN FEUER

The case of Laura Albert — professionally known as JT Leroy — could be read as a literary cautionary tale, the story of a writer who hid behind her own assumed identity and lost herself while reaching for the truth.
Where there might have been a single life, there were instead a pair:
JT Leroy, addict, androgyne and the acclaimed author of Sarah, a novel of truck-stop prostitution set among the diesel fumes of a West Virginia highway. And then Ms. Albert, a Brooklyn woman living in obscurity who had never been to West Virginia, a writer of such reclusive instincts she required not only a pseudonym, but another personality, to write.
Yesterday, however, the creator and creation, who had lived for years in a sort of double helix, were finally forced together by the self-revealing power of the witness stand. Testifying at her own civil fraud trial in Federal District Court in Manhattan, Ms. Albert told the jury the compelling tale of how — and why — it was that she sought the shelter of her all-consuming nom de plume.
“He was my respirator,” she said. “He was my channel for air. To me, if you take my JT, my Jeremy, my other, I die.”
Stripped of its emotion and labyrinthine literary games, the trial is no more than a contractual dispute. A film production company has sued Ms. Albert, saying that a contract signed with JT Leroy for the rights to make a feature film of “Sarah” should be null and void, for the simple reason that JT Leroy does not exist.
In broad terms, though, the trial has been an oddly highbrow exploration of a psycho-literary landscape filled with references to the imagination’s fungible relation to reality and the bond that exists between the writer and the work. Under questions from her lawyer, Eric Weinstein, Ms. Albert tried to draw what lines she could between the horrors of her childhood and their presence as reflected in her art.
She told the jury she had been sexually abused by a family friend, starting at the age of 3. She was also abused, she said, by her mother’s former boyfriend. She said she had felt responsible for both men’s acts: she thought it was her fault.
As a heavy girl, Ms. Albert was teased in childhood as “Fat Albert,” she told the jury, going so far as to sing for them the television show’s key line: “Hey, hey, hey, Fat Albert!” She said, “I didn’t want my name.”
Traveling one summer in Virginia as a child, she said, she met a trucker who, as she put it, “would give you a dollar and a chocolate for a kiss.” She said the trucker spanked her — that she wanted him to spank her. “He said the word: ‘Are you a bad girl?’ ” she said. “He got rid of the bad. That’s how I wouldn’t go to hell.”
Life at home, meanwhile, was bad enough. Ms. Albert ran away. She landed in the punk scene, in the East Village, with the hustlers and the addicts. This was around the time of her initial trip to a psychiatric ward. She was still in her early teens.
Eventually, she said, her parents sent her to a group home, where she lived as a ward of the state. (She considered Mayor Koch to be her father.) The stories of the girls she met were incorporated later into fiction, not unlike the stories of the punks from Tompkins Square.
Then, in 1989, she moved to San Francisco, where she worked as a maid and a baby sitter and sold her blood in order to survive. She also worked as a phone sex operator and perfected a sultry Southern accent she would later put to use in interviews as JT Leroy, including one, played in court, with Terry Gross, the NPR host.
It was in San Francisco, she said, that she started calling suicide hot lines from a pay phone on the street. Incapable of speaking as herself, she adopted the personas of various teenage boys.
One of those was a tattered runaway from West Virginia, a misfit from an educated family, who was living on the street. His name was Jeremy or Jeremiah: an embryonic version of JT Leroy.
At this point, fractured as it was, Ms. Albert’s psyche seemed to fracture yet again. She had, for months, as Jeremiah, been talking on the hot line to Dr. Terrence Owens, a psychiatrist. When Dr. Owens said he wished to meet, Ms. Albert paid a street waif to appear as Jeremiah, and then went along as his friend and roommate Speedy — which is to say, a patient standing with her alter ego in the third-degree remove of the alter ego’s friend.
Speedy was a character that remained with Ms. Albert even after “Sarah” was released in 2000 to almost instant critical acclaim. When Steven Shainberg, the proposed director of the film, flew to San Francisco to meet JT Leroy, Ms. Albert, in the guise of Speedy, picked him up and whisked him off to an expensive sushi restaurant, where “JT,” played by the sister of Ms. Albert’s former boyfriend, sat there mute throughout the meal, and then stuck Mr. Shainberg with the check.
It is because of such deceptions that the plaintiff in the case, Antidote International Films, has said Ms. Albert committed fraud.
The company’s lead lawyer, Gregory Curtner, confronted her on cross-examination with the fact that she once asked Savannah Knoop, the sister of the former boyfriend, to appear in public as JT.
If the question was devised to fluster the defendant, it failed.
Ms. Albert said: “She became JT. It’s like a trinity. We experienced it. It was as if he would leave me and enter her — I know how it sounds.
“He wanted his own body. He so wanted to be out of me. I wanted this other child I had to be out in the world,” said Ms. Albert, who has a son. “He didn’t like being inside me. He could talk such smack about me.”

But this book seemed to start out as a work of fiction. Authors have often used pseudonyms to author books (and believe it or not i use one for this blog) for whatever reasons and i'm not sure that it constitutes fraud, was Mary Ann Evans committing fraud when she wrote under the pen name George Elliot? Maybe i'm just missing something here...