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Díaz moved to Spain after graduating from school and he worked with a group that was widely successful, La Pandilla, which had 4 boys and 1 girl (Mariblanca, now a Veterinarian in her home country), but after the La Pandilla members grew up, he moved back to Puerto Rico, and created Menudo. The group went to achieve world wide fame and success.
Díaz's formula of signing up new members at the age of 12 and changing them for new members once they reached 16, was the secret to Menudo's success, but it also proved troublesome, as sometimes, whenever an individual would leave the group, the millions of fans that individual might have made with Menudo, would leave too.
Edgardo Díaz stayed on top of the group from 1977, from Menudo to the group's era as M.D.O. among other things.
In 1991, Diaz was accused by ex members of Menudo of sexual abuse towards Menudo members. In a May 1991 Univision Television Program "Cristina Show", he refuted the allegations. Diaz has been the target of several sexual crime allegations by former Menudo members, including Ralphy Rodriguez and Roy Rossello, who accused him of sexual abuse during a Brazilian reality show's transmission on October 21, 2014.
On November 20, 2014, Rene Farrait, another former Menudo member, told television show Suelta La Sopa that "Unfortunately, there are many people in the communications world that really know what happened (at Menudo) and are playing stupid", when asked about abuse allegations by Diaz. He did not, however, mention anything about sexual abuse against him or his Menudo bandmates. "He (Diaz) knows perfectly what happened there", Farrait told the show.
- ALISA VALDES-RODRIGUEZ (16 August 1999). "MENUDO'S BAD BOY RICKY MARTIN SINGS WHAT FELLOW ALUM ROBI ROSA WRITES". Sun Sentinel. p. 3D. Retrieved 11 January 2011.