Santa Barbara Physician Arrested on Drug Trafficking Charges

Dr. Diaz was arrested by DEA agents and Satna Barbara police at his Goleta home (PHOTO: LARA COOPER, NOOZHAWK.COM / January 4, 2012)

SANTA ANA (KTLA) - A Santa Barbara physician was arrested Wednesday morning on federal drug trafficking charges.

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

Diaz allegedly wrote prescriptions for powerful painkillers such as OxyContin for so-called 'patients' who were drug addicts. Some of them allegedly diverted the pills to the black market, or suffered fatal overdoses from the narcotics.

Diaz was arrested on a criminal complaint filed in U.S. 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 patientÂ’s) death, Diaz prescribed 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.'"

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.

Diaz was scheduled for a court appearance Thursday 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.