HATTIESBURG, MS (WDAM) - As the third day of the Albert Diaz trial continued at the William M. Colmer Federal Building, the prosecution showed video footage of him admitting to writing prescriptions for patients he never met.
Unbeknown to Diaz, Jay Schaar, a former pharmaceutical sales representative, videotaped the conversation in his office. The clips showed Diaz sitting at his desk, discussing his role in the alleged scheme.
'Don't ever say I got paid, because I didn't," said Diaz in the video.
In the video, he talked about his plans to omit information such as names and dates if asked by authorities. Diaz was also seen telling Schaar that he had no recollection of Randy Thomley--- who allegedly received funds from the scheme--- stating that he was only made aware of his role later. Schaar says Diaz wrote prescriptions based on Thomley's referral.
"Until you told me Randy's name, I didn't know it," he said.
He also told Schaar to be limited in what he shared with investigators.
"Don't volunteer information and don't lie," Diaz said.
According to the Department of Justice, Diaz took part in a scheme to defraud TRICARE--- a health care program for uniformed service members and their families--- by "prescribing medically unnecessary compounded medications, some of which included Ketamine, a controlled substance, to individuals without first examining the individuals for the purpose of having a Hattiesburg-based compounding pharmacy dispense the medically unnecessary compounded medications and to have TRICARE reimburse the compounding pharmacy for dispensing the medications." The federal indictment states that between Oct. 2014 and Dec. 2015, TRICARE reimbursed the pharmacy over $2.3 million for medications prescribed by Diaz. The indictment also says he falsified patient records by indicating that he examined individuals before prescribing them compounded medications.
Just after 9 a.m. Wednesday, the defense began its cross-examination of Schaar, who took the stand Tuesday for the prosecution. Defense attorney James Tucker contended that Schaar got a stamp to forge Diaz's signature on various prescriptions.
"Absolutely not," said Schaar, denying the allegation.
In his testimony, Schaar claimed Diaz signed at least 17 prescriptions for patients.
"All of the information (prescription) was on there before he signed," said Schaar.
Schaar's statement brought up the issue of deciphering between a signature made by a stamp or manually. Tucker showed jurors four examples of prescriptions with what appeared to be a signature stamp. He then juxtaposed a prescription with a signature stamp to one signed manually to allow jurors to see any differences or similarities related to possible forgery.
During his cross-examination, Tucker asked Schaar if he ever saw Diaz stamp the prescriptions.
"I never saw him stamp any of those, no," said Schaar, who later testified to seeing him sign some, but not all
Schaar admitted to leaving prescriptions at Diaz's office for his signature and later coming back to retrieve them after they were signed. Schaar went on to say that between employees and daily traffic, there were quite a few people who came into Diaz's office, leaving the option for anyone to potentially stamp or sign the prescriptions.
"It's got to leave somebody, drug reps," said Schaar. "A lot of students come in and out of there."
Schaar also said a "white woman" employed by Diaz, whose name he didn't know, signed prescriptions he left at the doctor's office.
"I asked a couple of times if they could stamp them," Schaar said of employees, noting that some agreed to do it while others did not.
Cross-examination of Schaar continued throughout the morning into the early afternoon in front of a packed courthouse. Tucker attacked his credibility as a witness by suggesting that the plea deal he made on July 25, 2017 to the charge of conspiracy to commit health care fraud in a scheme to defraud TRICARE made him bias and/or prejudice against the defendant. Tucker also mentioned his history with drug and alcohol abuse, which Schaar admitted to.
Tucker went on to talk about Schaar's dealings with Susan Perry--- a nurse practitioner charged in the indictment. Perry is charged with one count of conspiracy to commit healthcare fraud and wire fraud, four counts of wire fraud, one count of conspiracy to distribute and dispense a controlled substance, one count of distributing and dispensing of a controlled substance, one count of conspiracy to solicit and receive healthcare kickbacks, four counts of soliciting and receiving healthcare kickbacks and one count of making false statements.
According to the indictment, TRICARE reimbursed over $3.3 million in medications prescribed by Perry and she allegedly received $50, 000 in kickbacks. Schaar testified that over time he paid Perry anywhere between $40, 000 and $50, 000 for prescriptions, motive Tucker said led to his reason to seek another physician. However, Schaar disagreed.
"I had a relationship and rapport with him," said Schaar of Diaz. "I did not mean to target him."
After the defense wrapped up their cross-examination, the prosecution called two witnesses to the stand. First up was Johnathan Dalton, Mississippi State Board of Medical Licensure investigative supervisor. Dalton testified that as a part of the ongoing investigation into the fraud, he interviewed Diaz along with a member of the Drug Enforcement Administration. Dalton said he asked Diaz a number of questions prepared for him by the Federal Bureau of Investigation, which included topics such as Advantage Pharmacy--- a Hattiesburg-based compounding pharmacy that dispensed prescriptions allegedly signed by Diaz. Dalton also said that during his meeting with Diaz, he never mentioned any discrepancies with patients or prescriptions.
"He acted generally unaware about Advantage Pharmacy as if he was unaware of it," said Dalton describing Diaz as having a "deer in the headlights reaction.
According to Louis Norville, Internal Revenue Service special agent, records showed that Diaz was one of the top prescribers of compounded medications. The Food Drug and Administration describes compounding as a combination, mix or alteration of ingredients of a drug to make a medication to fit the needs of a specific patient.
"The purpose of the interview was to get a statement to see if there was a reason for the high count of prescriptions," said Norville.
Norville reiterated Dalton's statement by testifying that during the investigation Diaz did not alert them to any issues he had with falsified patient prescriptions or records. He testified that Diaz--- a Biloxi-based physician--- along with Schaar and Thomley made a trip to Hattiesburg after being notified of the audit by TRICARE "to cover his a---."
Although briefly on the stand without the presence of jurors, Diaz maintained his innocence.
"I didn't think I'd be sentenced, because I didn't do anything," he said when asked about his knowledge of time he could serve if convicted.
If Diaz is convicted, he faces 305 years in jail and fines up to $7.5 million.
The trial is scheduled to resume on Thursday at 8:30 a.m.
You can find the details from day two of the trial here: Witness: Doctor prescribed meds without evaluating patients