updated 4:37 p.m. ET April 5, 2004

OXFORD, Miss. - John Daly’s wife and her parents pleaded guilty Monday to federal money laundering charges.

The three made the pleas as their trial was scheduled to start.

Sherrie Miller Daly, who married the two-time major champion in 2001, and her parents, Alvis and Billie Miller, entered into an agreement late Friday with U.S. Attorney Paul Roberts to plead guilty.

The three were charged in a federal indictment alleging they were involved in a drug ring and an illegal gambling operation.

Prosecutors said earlier that the golfer didn’t know about his wife’s alleged drug activities, which took place between 1996 and 2002.

The July 28 indictment alleged the three were part of a larger conspiracy to buy and sell cocaine, methamphetamine and marijuana, and paid for them with cash from previous drug sales.

Under his plea agreement, Alvis Miller will serve up to two years in prison. He claimed he did not know the money was coming from illegal drug profits.

Sherrie Daly and Billie Miller faced lesser charges of conspiring to avoid financial reporting through deposits totaling over $400,000 at Bank of Tennessee and Trustmark Bank in Collierville, Tenn.

The two were offered an agreement of five years’ probation with six months of home detention. They could have faced five years in prison.

John Daly did not comment on the sentencing as he left Augusta National, site of the Masters, on Monday, but he did say he strongly suggested to his wife that she accept a plea bargain.

“You don’t beat a federal court, a federal judge and the FBI. There’s no way,” Daly said. “I told Sherrie, ’You’ve got to look after what’s ahead of you. If there’s probation, house arrest, you’ve got to take that. I know you’re not a convict. I know you’re not guilty of anything. But you’re not going to win.”’