Albert Diaz, who was convicted on March 2 for his role in a compound pharmacy fraud scheme, is set to appear before Magistrate Judge John Gargiulo on Tuesday. His bond hearing is scheduled for 10:00 a.m. in Gulfport.
Diaz, a Biloxi-based physician, was charged in a 16-count indictment to defraud TRICARE, a healthcare program for uniformed service members and their families. His charges include one count of conspiracy to commit health care fraud and wire fraud, four counts of wire fraud, one count of conspiracy to distribute and dispense a controlled substance, four counts of distributing and dispensing of a controlled substance, one count of conspiracy to falsify records in a federal investigation and five counts of falsification of records in a federal investigation.
According to the Department of Justice, Diaz was “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 says between October 2014 and December 2015, TRICARE reimbursed the pharmacy over $2.3 million for medications prescribed by Diaz. Records also show he falsified patient records by indicating that he examined individuals before prescribing them compounded medications, all of which Diaz admitted to doing on the stand.
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.
During four days of testimony, jurors heard from witnesses who claimed they never met Diaz. However, they received pain and scar creams, wellness capsules and pills based on his prescriptions. His defense stated there was insufficient evidence to prove Diaz was involved in any conspiracy to defraud TRICARE with Jay Schaar and Randy Thomely. Schaar pleaded guilty on July 25, 2017 to conspiracy to commit health care. Schaar, a former sales rep, testified that he met Diaz in 2008. He went on to say that Randy Thomley, who also allegedly received funds from the scheme, asked him if he knew a doctor who would be willing to write prescriptions for individuals in Hattiesburg whose doctor was no longer prescribing them medicine.
Diaz faces 305 years in jail and fines up to $7.5 million. His sentencing is expected to take place on May 22 at 9:30 a.m. in District Judge Keith Starrett’s courtroom.