Santa Barbara Doctor Arrested on Federal Charges for Allegedly Writing Prescriptions for Huge Quantities of Dangerous Narcotics

January 4 2012

Some of the Prescriptions are Linked to Drug Overdose Deaths

SANTA ANA, California – A Santa Barbara physician was arrested this morning on federal drug trafficking charges for allegedly writing prescriptions for powerful painkillers, such as OxyContin, for “patients” who were drug addicts – some of whom diverted the pills they received to the black market and or suffered fatal overdoses from the narcotics.

Julio Gabriel Diaz, 63, who operates the Family Medical Clinic in Santa Barbara, was arrested this morning at his Goleta residence by special agents with the Drug Enforcement Administration and officers with the Santa Barbara Police Department.

Diaz was arrested pursuant to a criminal complaint filed in United States District Court that charges him with distribution of controlled substances.

“The illegal sale and abuse of prescription narcotics is a growing problem that feeds addictions and leads to other criminal conduct,” said United States Attorney André Birotte Jr. “Many of the illegal prescription drugs that find their way to the street come from doctors who prescribe them for money without medical justification. These doctors are drug dealers and they will face stiff penalties in federal court.”

The affidavit in support of the criminal complaint outlines evidence “that Diaz has written prescriptions for large quantities of controlled substances that are not medically necessary or indicated. As a result, highly addictive prescription controlled substances, including oxycodone [a drug often sold under the brand name OxyContin] and hydrocodone [a drug often sold under the brand names Vicodin and Norco], have been diverted from legitimate medical use into the community for an illegitimate use.”

The affidavit discusses a series of fatal drug overdoses linked to narcotics prescribed by Diaz. A patient who died in November 2011 appeared to have been injecting prescription medication that was prescribed by Diaz. The investigation into that death found that “in the six weeks before [the patient]’s death, Diaz prescribed to [the patient] a total of 2,087 pills, or an average of 63 predominantly Schedule II and III pills per day.”

Doctors, nurses and other personnel with Santa Barbara Cottage Hospital wrote to the Medical Board of California and gave statements to investigators to complain about Diaz, according to the affidavit. One letter to the Medical Board said Diaz “is often described as a ‘doctor you can get anything from’ by patients.” A therapist in the psychiatric department at Cottage Hospital told investigators that “people referred to Diaz as the ‘Candy Man’ and that people drove from out of town to see him ‘because they knew he was the man to go to for drugs.’”

Cottage Hospital doctors believed that Diaz posed such a threat that they prepared a spreadsheet documenting emergency room visits by patients who had been prescribed narcotics by Diaz, according to the affidavit. “The spreadsheet demonstrated Diaz’s pattern of over-prescribing and the direct relationship between the prescriptions received and ER visits and admissions,” a DEA special agent wrote in the affidavit.

Furthermore, two female patients who were admitted to the Cottage Hospital ER told hospital staff “that they were getting narcotics from Diaz in exchange for sexual favors,” according to the affidavit. “They alluded to numerous friends also receiving narcotics from Diaz in exchange for sexual favors.”

The affidavit also outlines a study by one insurance company that documents nearly $1 million in claims to the company for prescriptions written by Diaz over a three-year period.

“Prescription drug abuse has reached epidemic levels – in 2010, about 12 million Americans reported non-medical use of prescription painkillers,” said Timothy J. Landrum, DEA Special Agent in Charge. “DEA is committed to working with our law enforcement partners to ensure those who endanger our citizens by distributing these dangerous drugs for no medical purpose are brought to justice.”

A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

Diaz will be held in jail overnight pending a scheduled court appearance tomorrow afternoon in federal court in Santa Ana.

The charge of illegal distribution of a controlled substance by a medical practitioner carries a penalty of up to 20 years in federal prison.

The investigation into Diaz was conducted by the Drug Enforcement Administration and the Santa Barbara Police Department, which received the assistance of the California Medical Board.

CONTACT: Assistant United States Attorney Ann Luotto Wolf

(714) 338-3533

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