Longtime Coast doctor Albert Diaz was sentenced Thursday to 3 years and 6 months in prison in a dramatic departure from sentencing guidelines in the insurance fraud case.
Diaz has been jailed since March 2, when a jury convicted him 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.
After almost two hours of argument from the defense and prosecution, U.S. District Judge Keith Starrett determined the sentencing range for Diaz's crimes was 9 to 11 years.
Tears began flowing as soon as the 78-year-old hobbled into the courtroom in shackles. He has been a doctor for 45 years and delivered more than 20,000 babies on the Mississippi Coast.
Starrett on Thursday initially rejected requests by Diaz's attorney for lesser sentences on the charges, but ultimately he was lenient.
A billion dollar problem
Starrett said Diaz already has been punished by serving time in jail since his arrest, losing his license to practice medicine, and losing his longtime business. It's also unlikely Diaz would commit another crime, he said.
The judge took into consideration Diaz's advanced age, his good standing in the community and the more than 100 letters asking for leniency and attesting to the doctor's good works.
However, Starrett felt some letters written by Coast physicians were "arrogant" and did not reflect the gravity of the crimes. He talked at length about the effect of "rampant" health care fraud and how it's costing the country billions of dollars. "Billions with a B," he said.
"Physicians are a major cause of the 60,000 people dying a year in this country from opiate overdoses. Almost all of them have their genesis from a prescription written by a physician."
Starrett said he hoped sending Diaz to prison would be a strong message to others in the health care industry.
Before the sentencing was handed down, Assistant U.S. Attorney Justin Hastin asked for lengthy prison time.
"People in health care still pay attention to these cases," he said. "They are hard to investigate and hard to prosecute."
"He knew better but he did it. A lifetime of good deeds can't erase four years of criminal conduct."
Diaz's wife, Kay, recently served him with divorce papers at the Stone County jail, around the time of their 28th wedding anniversary, court records show. She cited desertion as the grounds.
However, they blew kisses to each other as Diaz sat down before the sentencing.
He made a statement in court, pausing several times to collect himself.
"My reputation has been soiled, the respect of the community lost, my honor disgraced. The destruction of a life was 90 percent complete. In the past 72 hours, I have received divorce papers. I think that completes everything."
Starrett noted that Diaz made false statements during testimony at trial. Rather than Diaz actually helping patients as he claimed, Starrett said an undercover surveillance tape showed the doctor was concocting that story to try to cover up his crimes.
"You have not given me justice," Diaz told the prosecution team in federal court in Hattiesburg.
Two co-conspirators, Jay Schaar of Biloxi and Jason May of Lamar County, pleaded guilty in the case 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.
TRICARE, the military's health care program, paid Advantage almost $2.3 million for the fraudulent prescriptions. But Starrett found the intended loss was actually $3.8 million.
The conspiracy started in October 2014 and continued until around January 2017.
Sun Herald will update this report.