Stephen Costa, aged 40, has been sentenced to fourteen years in prison following his guilty plea for leading a conspiracy that distributed diverted pharmaceutical drugs across the United States. These drugs were intended for HIV and cancer patients but were introduced into the legitimate supply chain.
Court documents reveal Costa's role as the mastermind behind this operation, which led to the prosecution of 20 defendants between 2019 and 2024. The scheme began in early 2013 when Costa acquired licensed pharmaceutical wholesale companies under the names of associates and created new corporations for drug distribution. Some accomplices had previously conspired with him in a similar New York-based scheme.
Once in control, Costa bought diverted drugs from known suppliers and instructed co-conspirators on pricing, marketing, selling, and distributing these drugs to legitimate pharmacies nationwide.
Even after his conviction in New York, Costa expanded the Miami-based conspiracy. Before starting his sentence, he facilitated contacts between his primary supplier and a co-conspirator to continue operations during his imprisonment. He received payments from ongoing activities by his co-conspirators.
Approximately $78 million worth of diverted drugs were sold to patients who believed they received medications directly from manufacturers rather than repackaged street purchases. The operation was shut down in May 2019 through efforts by the Food and Drug Administration Office of Criminal Investigations (FDA-OCI) and FBI Miami.
The announcement was made by U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida, Special Agent Brett D. Skiles of FBI Miami, and Acting Special Agent Maximillian Pagano of FDA-OCI Miami Field Office.
Assistant U.S. Attorney Frank Tamen prosecuted the case while Assistant U.S. Attorney Nicole Grosnoff handled asset forfeiture.
Further information can be accessed on the United States Attorney’s Office for the Southern District of Florida website or through related court documents available on the District Court's site for the Southern District of Florida under case number 19-cr-20674.
