FBI agent testifies 2 people fatally overdosed from pills prescribed from alleged pill mill in Lenoir City

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KNOXVILLE (WATE) – A Knoxville woman charged in an alleged multi-million dollar pill mill scheme was in court Friday as a judge decided she should remain in custody because she is a flight risk.

Sylvia Hofstetter, 51, is charged with conspiring with other pain clinic operators or sponsors of pill shopping organizations to distribute oxycodone and to launder proceeds generated by those clinics.

US attorneys are calling Hofstetter the largest drug dealer ever to be in an East Tennessee court room. In Friday’s detention hearing, the judge said Hofstetter was a flight risk. He said she was 51 years old facing 20 years behind bars and has the means and incentive to flee and not return on her trial date. The judge said he would not give her the opportunity to flee and ruled to have Hofstetter remain in custody for her May 19 trial date. Prosecutors believe this trial date will be pushed back.

The first witness to take the stand Friday for the prosecution was FBI Special Agent Andrew Chapman. He testified the investigation showed Hofstetter manages area Prodigal Primary Care Clinics, one in Farragut and one in Fountain City.

Chapman said these primary care clinics are used to refer people to Hofstetter’s two alleged pill mills, one on Lovell Road called East Knoxville Healthcare Services and the other in Lenoir City called Comprehensive Health Care Clinic.

Chapman testified that former employees Patricia Newman, Shannon Hill and Stephanie Puckett used to work for Hofstetter at the pain clinics, but they got in an argument with Hofstetter and started their own pill mill Knoxville Pain Care on Park West Boulevard.

Chapman said a man named Chris Tipton was also linked to the scheme saying he was involved with another alleged pill mill called Knoxville Hope Clinic on Baxter Avenue. Chapman said Tipton was linked to $4 million dollars discovered in revenue from the pill mill scheme.

Agent Chapman testified Hofstetter came to East Tennessee from Florida at the direction of three men still living in Florida, Luigi Palma, Luca Sartini, and Ben Rodriguez. Chapman said the FBI’s investigation has shown possible ties of the three men to organized crime. Chapman says when legislators and law enforcement began cracking down on pill mills in Florida Hofstetter moved to East Tennessee to bring the supply to the demand.

Chapman said in surveillance from Florida, most of the car tags traveling to Florida for pills were from Tennessee. After this crackdown in 2011 is when Hofstetter moved to Tennessee to open pill mills, Chapman testified.

Chapman said the investigation showed her pain clinics take cash 100 percent of the time, which is illegal. Chapman said in Tennessee, her pill mills flourished quickly and she was seeing 1,000 patients a month. He said undercover agents had quick five minute visits with a medical professional at the pain clinics and were given a pain killer prescription.

Prosecutors told the judge over four year 12 million prescription pills were prescribed mostly oxycodone and oxy-morphine. US attorneys say her clinics made $3 million a year and she brought in $17.5 million in revenue over four years.

Agent Chapman said each visit to Hofstetter’s alleged pill mills cost $350 in cash.

Chapman said one medical doctor on staff Dr. Richard Larson was pre-signing prescriptions but no patients the FBI interviewed ever saw the doctor.

Chapman testified that before Hofstetter hired Dr. Larson she let go of the doctor before him because he spent more time with patients and wouldn’t always write a prescription for a narcotic.

Chapman said the FBI’s investigation linked Hofstetter’s Lenoir City clinic to two pill overdose deaths. He said the pills were prescribed from her pill mill. He said an FBI investigation is looking into her clinics being linked to 5 more fatal overdoses.

Previous story: Knoxville woman, multiple others indicted in pill mill operation

Law enforcement on Tuesday raided East Knoxville Healthcare Services, 509 Lovell Road, and Knoxville Pain Care PLLC, 9303 Park West Boulevard.

Previous story: 2 West Knoxville clinics raided by FBI, other agenciesSlideshow: Knoxville ‘pill mill’ investigation

The defense’s witness Lynn Johnson, an employee of Hoffstetter, said she always followed the rules, loved her grandson and would not be a flight risk.

When asked if the clinics were pill mills, Johnson said he “had no idea what business it was or how it was going to be conducted.”

A trial date is scheduled for May 19.

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