Santa Barbara doctor accused of trading sex for drugs

January 5, 2012

A Santa Barbara physician was arrested Wednesday on federal drug trafficking charges and allegations the doctor traded pain killers for sex.

Julio Gabriel Diaz, 63, allegedly wrote prescriptions for powerful painkillers, such as OxyContin, for “patients” who were drug addicts – some of whom diverted the pills they received to the black market and or suffered fatal overdoses from the narcotics, according to a press U.S. Department of Justice press release.

“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 criminal complaint affidavit says “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 and hydrocodone, have been diverted from legitimate medical use into the community for an illegitimate use.”

Doctors, nurses and other personnel with Cottage Hospital complained to the Medical Board of California 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.’”

Cottage Hospital doctors believed that Diaz posed such a threat that they prepared a spreadsheet documenting emergency room visits by patients who had been prescribed narcotics by Diaz. “The spreadsheet demonstrated Diaz’s pattern of over-prescribing and the direct relationship between the prescriptions received and ER visits and admissions,” a DEA special agent wrote in the affidavit.

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.”

Investigators said a series of fatal drug overdoses were linked to narcotics prescribed by Diaz.

A patient who died in November 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 patient’s death, Diaz prescribed to the patient a total of 2,087 pills, or an average of 63 predominantly Schedule II and III pills per day.”

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.

“Prescription drug abuse has reached epidemic levels – in 2010, about 12 million Americans reported non-medical use of prescription painkillers,” said Timothy J. Landrum, DEA Special Agent in Charge. “DEA is committed to working with our law enforcement partners to ensure those who endanger our citizens by distributing these dangerous drugs for no medical purpose are brought to justice.”

Diaz will be held in jail overnight pending a scheduled 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.

The investigation into Diaz was conducted by the Drug Enforcement Administration and the Santa Barbara Police Department, which received the assistance of the California Medical Board.