Source: US FBI
MIAMI – Stephen Costa, 40, was sentenced to fourteen years in prison after pleading guilty to his leadership role in a conspiracy that distributed thousands of bottles of diverted pharmaceutical drugs, many intended for HIV and cancer patients, into the legitimate supply chain around the United States.
According to court documents, Costa was the architect of a scheme, which resulted in the prosecution of 20 defendants in a series of superseding indictments issued between 2019 and 2024. The conspiracy originated in early 2013, when Costa began acquiring licensed pharmaceutical wholesale companies using the names of recruited associates, and established new corporations to distribute the drugs he acquired. Several of Costa’s accomplices were individuals he had previously conspired with in a similar scheme based in New York and others he had known from other businesses or high school.
Once Costa had control of these companies, he purchased diverted drugs from suppliers he had worked with before and directed his co-conspirators on how to price, market, sell, and distribute the drugs. These diverted drugs were ultimately funneled to legitimate pharmacies around the country.
Costa continued to expand the Miami-based conspiracy even after his conviction in the New York scheme. Before reporting to prison to serve his sentence, Costa facilitated the introduction of his primary supplier of diverted pharmaceuticals to a co-conspirator to perpetuate the operation during his imprisonment. Costa received several payments from the proceeds of his co-conspirator’s continuing operation.
In total, approximately $78 million worth of diverted drugs were sold to unsuspecting patients, believing their medications had been shipped directly from legitimate manufacturers—not purchased on the streets and repackaged under false labeling. The criminal operation was shut down in May 2019 through a joint effort by the Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), and FBI Miami.
U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida, Special Agent in Charge Brett D. Skiles of FBI Miami, and Acting Special Agent in Charge Maximillian Pagano of the FDA-OCI Miami Field Office made the announcement.
Assistant U.S. Attorney Frank Tamen prosecuted the case.
Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture.
You may find a copy of this press release (and any updates) on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 19-cr-20674.
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