Crime

Pleas of family, friends fail to win 78-year-old Coast doctor’s release from jail

Kay Diaz, wife of Coast physician Albert Diaz, leaves the federal courthouse in Gulfport after a hearing to determine whether he will be released from jail before he is sentenced May 22 on health care fraud charges. At the hearing’s conclusion, Magistrate Judge John Gargiulo said he will make a decision soon.
Kay Diaz, wife of Coast physician Albert Diaz, leaves the federal courthouse in Gulfport after a hearing to determine whether he will be released from jail before he is sentenced May 22 on health care fraud charges. At the hearing’s conclusion, Magistrate Judge John Gargiulo said he will make a decision soon. jcfitzhugh@sunherald.com

A U.S. magistrate judge decided Tuesday afternoon that Coast doctor Albert Diaz will remain in jail until he is sentenced May 22 on federal conspiracy, fraud and drug charges.

Family and friends had pleaded at a hearing Tuesday for the 78-year-old’s release. But Magistrate Judge John Gargiulo ruled within hours of the hearing that federal law was not on Diaz’s side.

Diaz was jailed after a jury convicted him March 2 on 16 federal charges. He faces eight to 10 years in prison on 16 charges of conspiracy to commit health-care fraud, fraud, falsifying records to cover up his crimes and distribution of a controlled substance — ketamine, a drug used for sedation.

Gargiulo wrote in an opinion filed Tuesday afternoon that federal law presumes a convicted defendant will be jailed rather than granted bail. The magistrate judge said Diaz had failed to establish a “substantial likelihood” that his motion for a new trial would be granted or that he was not a flight risk — both requirements for bail under the circumstances.

About 40 family and supporters filled the federal courtroom for Diaz’s hearing, with 60 more awaiting word in the hall on whether Diaz would be released.

Before the hearing, Diaz shuffled into court with a walker, wearing a jail jumpsuit and shackles around his waist and hands. An officer from the U.S. Marshal’s Service released Diaz from his handcuffs to take a seat with his attorneys for the hearing.

Diaz attorney John Colette argued that the doctor, who has practiced on the Coast since 1976, should be released because he might be entitled to a new trial. Colette said the jury pool was tainted when one juror claimed a Diaz family member threatened her and other jurors banded around her rather than letting the judge know.

The threat turned out to be unfounded and the juror was dismissed. Prosecutors pointed out that other jurors said they could remain impartial.

Diaz called four character witnesses, including his son, plastic surgeon Michael Diaz.

“My father has dedicated his entire life to serving this community,” Michael Diaz said. “He poses zero threat to anyone. All he has offered is love and compassion.”

Assistant U.S. Attorney Jared Hasten disagreed: “He’s looking at significant prison time . . . He absolutely has a reason to flee.”

Hasten also said Diaz’s testimony in his own defense at trial was “not forthright and the jury absolutely rejected it.”

Some Diaz family members and friends started crying when the obstetrician and gynecologist was escorted from the courtroom to await Gargiulo’s decision.

Diaz, who delivered thousands of babies on the Coast, has lost his license to practice medicine, but he had hoped that he would be released and have time to get his patient files in order.

Two co-conspirators in the case, Jay Schaar of Biloxi and Jason May of Lamar County, pleaded guilty and are free on bonds while they await sentencing. Schaar, a pharmaceutical representative, recruited Diaz to write prescriptions for compound drugs that were filled at Advantage Pharmacy in Hattiesburg, co-owned by May.

May and Schaar have admitted that drugs were compounded based on profit potential, not need. Diaz prescribed the drugs for patients he had not seen then, after an investigation started, back-dated records to make it appear he had examined some patients.

The conspiracy started in October 2014 and continued until around January 2017, according to the indictment.

TRICARE fraud conviction

A jury convicted Biloxi physician Albert Diaz on a total of 16 federal charges:

  • Conspiracy to defraud TRICARE, a military health insurance program: 1 charge.
  • Fraud: 4 charges.
  • Conspiracy to distribute a controlled substance (Ketamine): 1 charge.
  • Distribution of Ketamine: 4 charges.
  • Conspiracy to falsify records in a federal investigation: 1 charge.
  • Falsifying records in a federal investigation: 5 charges.
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