Keeping a secret, Miami broker sells homes and launches firm while hiding criminal past

A Miami real estate agent boasts on social media about residential deals during a slowing housing market and condo listings in new ritzy Miami Beach and North Bay Village projects.

Sporting a clean-cut look in an unbuttoned suit on Instagram, the image Stephen Manuel Costa sells is all about money and success.

But one detail remains missing from Costa’s picture-perfect socials. It’s a slice of information he’s failed to tell buyers or even Florida’s consumer protection agency: his criminal history.

Costa, the co-owner and co-founder of Scope Realty LLC, held a real estate license and opened his firm while hiding a 2015 conviction for jeopardizing the health of Americans and serving about three years in prison. Costa was also fined $10,000 and ordered to pay $1.2 million by a Miami federal judge to the U.S. government for defrauding its health insurance program for the indigent.

The state is now looking into Costa’s Medicaid fraud conviction after the Miami Herald inquired about his license.

The case in question goes back over a decade. In 2013, a then 28-year-old Costa plotted and led a healthcare scam in which he both stole and bought medications usually from AIDS patients, according to an indictment and other court records. The drugs included Atripla, Trizivir, Zyprexa and Truvada — a bottle of these averages $1,000.

Living in New York City at the time, Costa and his conspirators met with Medicaid beneficiaries at bodegas and street corners in Manhattan and the Bronx, paying them off. Costa and his associates later relabeled the medications and sold them to pharmacies, court records show.

The scheme lasted less than a year, and, after getting caught, Costa pleaded guilty to conspiring to commit healthcare fraud in September 2015. He served about three years in prison starting in 2016 and then had another three years of supervised release. But he got in trouble once again with the federal probation office after testing positive for cocaine use, according to court records. He was ordered to perform community service.

All the while, Costa carried his real estate license. He obtained it in 2003 and was able to sell and profit from residential and commercial real estate deals. Under Florida law, a convicted felon can carry a real estate license. Still, any conviction must be reported to the Florida Department of Business and Professional Regulation and its Florida Real Estate Commission. Both the agency and its commission failed to take notice of Costa’s record until now.

The agency and its commission approve and monitor professional licenses in the state to protect consumers by checking and keeping tabs on the credentials of applicants and license holders. But there’s the catch: The Department of Business Regulation and its branch Real Estate Commission expects license holders to share a conviction or plea deal within 30 days. Those who fail to do so face a fine, suspension or license revocation.

“We can confirm that the Department has received notice of Mr. Costa’s alleged failure to disclose a prior conviction and is proceeding accordingly,” Florida DBPR Deputy Director of Communications Kara Lefkowitz said in an email to the Miami Herald.

In addition to the state, the Miami Association of Realtors’ chief legal counsel, Evian White De Leon, confirmed that Costa is an active member. When told of Costa’s criminal background and pending trial by the Miami Herald, White De Leon said in a statement the association has launched an internal investigation.

Costa’s lawyer, David A. Howard, said by email his client would “not likely” provide comment.

As of late May, Costa’s license remains active, according to a Florida DBPR license search. His license expires late next year.

In the meantime, Costa’s presence on the real estate scene continues to grow. Despite facing new charges, Costa opened his own business — a South Miami-based brokerage firm called Scope Realty, handling residential sales, leases, and investments in new construction.

Another healthcare scam

Soon after leaving prison, Costa plotted another healthcare scam, this time spanning across state borders and territories, according to a 2021 Miami federal indictment.

Costa acquired medications used to treat psychiatric disorders, cancer and HIV infections, then repackaged and reintroduced them back into the market through a 14-member team, the indictment says.

The plot this time was more intricate — harder to follow.

Costa began by buying out two Puerto Rican manufacturers and distributors and rerouting the drugs to different states, including Florida and North Carolina, according to the indictment. He also managed to steal from trucks and pay off Medicare patients who likely received the medications for free, court documents say. Pharmacies acquired the drugs, sold them to unknowing vendors and distributed them to patients consuming mislabeled drugs, the indictment says.

As of 2021, Costa faces a multi-million dollar indictment as a result of his latest prescription drug diversion scheme. Eleven people have pleaded guilty in Miami federal court. They all face jail time — some up to 20 years.

While waiting for his day in court, Costa remains under a supervised release. He’s already gotten in trouble with the law. An FBI agent reported in a 2022 memorandum that Costa gambled $373,700 worth of chips with cash and bet a million at the Seminole Hard Rock Casino near Hollywood from 2020 through most of 2021. Costa failed to mention to his probation officer his nights spent out gambling or source of funds.

Costa, Angel Caminero Alvarez and music producer Boris Arencibia are the only remaining defendants in a fifth superseding indictment.

Opening Scope Realty

Last February, Costa co-founded a brokerage firm, the South Miami-based Scope Realty, LLC at 6330 Sunset Dr. According to the company’s Instagram account scoperealtymiami, the firm has 5,555 followers and promotes its rental deals and residential sales, including condos in North Bay Village closing for $580,000. The site also promotes listings in planned and recently completed high-rises, including Shoma Bay in North Bay Village and Five Park in Miami Beach.

Amy Caballero and Perla Valenzuela are Costa’s business partners and listed as co-CEOs on the website. Costa remains off the company website, despite being registered as the co-owner of the firm in legal documents and on Instagram. Caballero and Valenzuela, an exotic dancer and lingerie model, obtained their real estate licenses in 2022 and run a firm with 11 real estate agents.

Caballero and Valenzuela have not responded to multiple requests for comment from the Miami Herald by email, phone and text.

What’s at stake

In the latest healthcare fraud case, Costa faces bigger concerns than losing his real estate license for failure to disclose a prior conviction.

Costa is charged with conspiracy to deal in misbranded drugs, conspiracy to traffic in medical products with false documentation, mail fraud and money laundering.

If convicted, Costa faces up to 20 years in prison on some of the counts.

Miami Herald staff writer Jay Weaver contributed to this report.

©2024 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.