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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Tennessee

FOR IMMEDIATE RELEASE
Wednesday, October 21, 2020

Pain Clinic Owner Sentenced For Role In Operating Pill Mills In Tennessee And Florida

KNOXVILLE, Tenn. – On October 21, 2020, defendant Sylvia Hofstetter, was sentenced today to 400 months in prison for her role in operating several pill mills in Knoxville, Tennessee and Hollywood, Florida.

Acting Assistant Attorney General Brian C. Rabbit of the Justice Department’s Criminal Division, U.S. Attorney J. Douglas Overbey of the Eastern District of Tennessee, and Special Agent in Charge Joseph Carrico of the FBI’s Knoxville Field office made the announcement.

Sylvia Hofstetter, 56, of Miami, Florida, was sentenced by United States District Judge Thomas A. Varlan. Judge Varlan also ordered the defendant to pay $3.6 million in forfeiture. Hofstetter was found guilty by a jury on February 13, 2020, of Racketeer Influenced and Corrupt Organization (RICO) conspiracy, two counts of drug conspiracy, money laundering offenses, and maintaining drug-involved premises.

The evidence at trial proved that the pill mills owned and operated by Hofstetter and her co-defendants distributed over 11 million tablets of oxycodone, oxymorphone, and morphine that generated over $21 million in revenue, with a corresponding street value of $360 million. The conspiracy involved four separate clinics in Tennessee, each of which the jury determined were drug-involved premises, i.e., pill mills. Before coming to Tennessee, Hofstetter worked at a pill mill in Hollywood, Florida owned by three of her co-defendants. The evidence at trial demonstrated that, as law enforcement shut down hundreds of pill mills in South Florida during that time-period, Hofstetter and her co-codefendants planned the move to East Tennessee where many of these clinics’ opioid-addicted customers lived.

Hofstetter’s role in Tennessee was to run the pill mills and ensure that patient volume remained high, thus guaranteeing enormous profits for Hofstetter and her co-defendants. Once in Tennessee, however, Hofstetter opened her own pill mills in secret from her Florida employers and went into competition against them. Hofstetter personally reaped over $4 million dollars from her role in these offenses.

“This defendant reaped millions of dollars in personal profits by operating destructive opioid pill mills in multiple states, inflicting lasting harm on multiple communities,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “This prosecution demonstrates the Department of Justice’s steadfast commitment to combatting the opioid crisis and holding responsible the unscrupulous individuals who seek to profit from it.”

"The Eastern District of Tennessee remains at the forefront in the battle against illegal pain clinics and the mass-prescribing of opioids," said U.S. Attorney Overbey. "Through the cooperation and hard work of our local, state, and federal agencies, we continue to pursue and prosecute those who seek to endanger our communities by illegally distributing prescription pain killers. Let this sentencing serve as a deterrent for those who seek to profit from fueling a tragic cycle of addiction and pain killer abuse."

"The nation remains in the midst of a drug crisis that is often fueled by pill mills. Drug addiction destroys lives and devastates families. The FBI will work tirelessly with our federal, state and local law enforcement partners to investigate, arrest and hold accountable those who use illegal means and criminal behavior to take advantage of others," said FBI Special Agent in Charge, Joseph Carrico.

This sweeping prosecution, which has resulted in approximately 140 convictions so far, results from an investigation by the United States Attorney’s Office for the Eastern District of Tennessee, the Organized Crime and Gang Section, U.S. Department of Justice, and the FBI High Intensity Drug Trafficking Area (HIDTA), comprised of investigators assigned to the task force by the Loudon County Sheriff’s Office, Knoxville Police Department, Blount County Sheriff’s Office, Roane County Sheriff’s Office, Harriman Police Department, and Clinton Police Department. Other agencies provided invaluable assistance, including the Rome attaché of the Office of International Affairs, U.S. Department of Justice, FBI’s liaison in Rome, FBI’s Miami Field Office, the Hollywood, Florida, Police Department, the United States Department of Health and Human Services, the Tennessee Department of Health, and the Drug Enforcement Administration’s Knoxville Diversion Group.

The investigation that led to this prosecution, as described above, fall under the auspices of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.

Assistant U.S. Attorney Tracy L. Stone, Deputy Chief Attorney Kelly Pearson, and Trial Attorney Damare Theriot, Organized Crime and Gang Section, U.S. Department of Justice, represented the United States in the prosecution of this case.

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Topic(s): 
Prescription Drugs
Contact: 
Rachelle Barnes Public Information Officer (865) 545-4167
Updated October 22, 2020