MIAMI – Stephen Costa, 40, has been sentenced to fourteen years in federal prison after pleading guilty as the mastermind behind a colossal $78 million prescription drug diversion scheme that infiltrated the U.S. pharmaceutical supply chain.
Costa was at the heart of a conspiracy that led to charges against 20 defendants in a series of indictments between 2019 and 2024, according to court documents. The operation began in early 2013 when Costa acquired licensed pharmaceutical wholesale companies under fake names, establishing new corporations to distribute his illicit wares.
Several of Costa’s accomplices were familiar faces from past collaborations and high school, including individuals who had worked with him on a New York-based scheme. Once in control, Costa directed the pricing, marketing, selling, and distribution of drugs that he knew had been procured from unauthorized suppliers, ultimately leading to legitimate pharmacies across the country.
Despite his prior conviction for a similar crime, Costa continued to expand his Miami-based operation. Before reporting to prison, he ensured the continuity of the scheme by introducing a new supplier to a co-conspirator, who then kept the operation running. Costa even received payments from this ongoing operation during his own imprisonment.
The massive fraud resulted in approximately $78 million worth of prescription drugs being sold under false pretenses to unsuspecting patients. The criminal enterprise was dismantled 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, along with Special Agents Brett D. Skiles of FBI Miami and Maximillian Pagano of the FDA-OCI Miami Field Office, announced the sentencing. Assistant U.S. Attorney Frank Tamen prosecuted the case, while Assistant U.S. Attorney Nicole Grosnoff is responsible for handling asset forfeiture.
For more information and updates on this case, visit the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls, and related court documents can be found on the District Court for the Southern District of Florida’s website at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov, under case number 19-cr-20674.
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Key Facts
- State: Florida
- Agency: DOJ USAO
- Category: Drug Trafficking|Fraud & Financial Crimes|Organized Crime
- Source: Official Source ↗
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