U.S. Attorney’s Office
Eastern District of Tennessee
(865) 545-4167
March 11, 2015

Knoxville Woman and Others Indicted for Operating Pill Mills in Knox and Adjacent Counties

KNOXVILLE, TN—A federal grand jury in Knoxville has returned indictments charging multiple individuals for their roles in the proliferation of several “pill mills” in Knox and adjacent counties over the past few years. The primary defendant in the investigation, Sylvia Hoffstetter, 51, of Knoxville, is charged with conspiring with other pain clinic operators or sponsors of pill shopping organizations to distribute oxycodone, and to launder the proceeds generated by those clinics.

Hoffstetter, who was arraigned on Mar. 10, 2015, before U.S. Magistrate Judge C. Clifford Shirley, Jr., is accused of being responsible for the distribution of a quantity of oxycodone sufficient to generate clinic revenue of at least $17.5M between April 2011 and March 2015. She was ordered to be jailed upon the government’s motion until a detention hearing is conducted on Friday, Mar. 13, 2015. Several others were arrested on Tuesday and made their initial appearances before the court. Other arrests are pending.

If convicted as charged, each defendant faces up to 20 years in prison and a fine of up to $1M on the drug trafficking charge and up to another 20 years and a fine of up to $500,000 on the money laundering charges. There is no parole in the federal system.

U.S. Attorney William C. Killian and FBI Special Agent in Charge (SAC) Edward Reinhold announced that this indictment is the result of an investigation by the FBI High Intensity Drug Trafficking Area (HIDTA). The FBI HIDTA is composed of FBI special agents and investigators assigned to the task force by Blount County Sheriff James Berrong, Clinton Police Chief Rick Scarborough, Harriman Police Chief Randy Heidle, Knox County Sheriff Jimmy “J. J.” Jones, Knoxville Police Chief David Rausch, Loudon County Sheriff Tim Guider, and Roane County Sheriff Jack Stockton. SAC Reinhold also expressed his appreciation to Jefferson County Sheriff Bud McCoig and Kingston Police Chief Jim Washam for providing assistance in the arrests of some of these defendants.

Assistant U.S. Attorneys Tracy L. Stone and Anne-Marie Svolto will represent the United States in the prosecution of these cases.

Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.

The HIDTA program enhances and coordinates drug control efforts among local, state, and federal law enforcement agencies. The program provides agencies with coordination, equipment, technology, and additional resources to combat drug trafficking and its harmful consequences in critical regions of the United States. In the Eastern District of Tennessee, HIDTA funds DEA and FBI led drug task forces in Johnson City, Knoxville, and Chattanooga, as well other initiatives to reduce drug crime in the HIDTA. For more information please visit www.whitehouse.gov/ondcp/high-intensity-drug-trafficking-areas-program.

The investigation is also part 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.

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