'The Italians' Accused in RICO Indictment of Operating a Deadly Opiate Pipeline in East TN

There were frightened whispers about “the Italians” on the federal wire taps of workers at a network of East Tennessee clinics authorities said were fronts for this region’s largest pill-mill operation, testimony has shown.

An FBI agent in 2015 testified openly about how “the Italians” – Luca Sartini, Luigi Palma and Benjamin Rodriguez – were pill-mill kingpins who escaped justice through shrewd business practices that kept their names off any documents.

Now, six years after the FBI’s Knoxville division first heard about “the Italians,” Sartini and Palma are under arrest in Rome on a federal racketeering indictment alleging a criminal enterprise that stretched the entire length of the medical community and distributed billions of opiates, killing more than 700 people via overdoses, in Florida and East Tennessee.

Rodriguez has made plans to surrender, according to a release from the U.S. Attorney’s Office in Knoxville.

New indictment

U.S. District Judge Tom Varlan on Friday unsealed a superseding indictment sought by federal prosecutors Tracy Stone and Anne-Marie Svolto accusing Sartini, 58, of Rome and Miami; Palma, 51, also of Rome and Miami; and Rodriguez, 42, of Delray Beach, Florida, of operating a Racketeer Influenced and Corrupt Organization, or RICO, conspiracy.

Already charged in the case is 53-year-old grandmother Sylvia Hofstetter, businessmen Clyde Christopher Tipton and Maynard Alvarez, and medical providers Holli Womack, also known as Holli Carmichael, Alan Pecorella, Theodore McCrary, Courtney Newman and Cynthia Clemons. Richard Larson, a Dandridge doctor, also was indicted but has since died.

It is a 14-count indictment that includes allegations at least nine patients of clinics operated by the alleged RICO conspirators died as a direct result of opiates prescribed to them in East Tennessee.

Building a case

The case began with a tip from the Loudon County Sheriff’s Office in 2012 about a troublesome pain clinic in Lenoir City operated by Hofstetter. The FBI’s Knoxville division followed up and in three years amassed enough evidence to raid that clinic and two more in Knoxville and round up dozens of “sponsors” – addicts who took an entrepreneurial approach to their addiction by paying other addicts to go to the clinics and trade cash for prescriptions for hundreds of opiates at a time.

The agency also worked up the distribution chain, gathering enough evidence for Stone and Svolto to prosecute medical providers at the Urgent Care & Surgery Center Enterprise – a network of emergency clinics, walk-in clinics and pain clinics – facilities in East Tennessee. The emergency and walk-in clinics would funnel patients to the pain clinics, the indictment stated.

Next came charges against the drug-testing companies and national drug-testing laboratories the enterprise used to launder the millions the clinics were generating and ripping off Medicare and TennCare, to boot. Authorities say the enterprise netted $21 million in profits in just four years.

The prosecutors alleged Tipton and Alvarez set up and used shell companies to hide a kickback scheme, claiming those firms provided “marketing” services for the two laboratories. The prosecutors say in the indictment that Tipton and Alvarez were providing the labs with a steady flow of urine testing for which the labs could bill Medicare and TennCare.

It was a win-win for both the alleged pill mills and the labs: Hofstetter, Tipton and Alvarez could trick regulators into believing the clinics were actually screening patients for opiate addiction and the labs got to bill government-subsidized healthcare programs at rates far above the actual cost of that testing.

Climbing to the top

But the FBI knew Hofstetter wasn’t the RICO leader, according to testimony at several hearings in U.S. District Court since the 2015 clinic raids. Wire taps pointed to Sartini, Palma and Rodriguez as the financiers and architects of the enterprise.

Sartini and Palma have dual citizenship. According to testimony, they lived in Miami and were among the first to get into the pain clinic business in South Florida when “pill mills” there were first beginning to draw in opiate addicts from other states in the 1990s. But their names never appeared in documents tied to pill mills, FBI Agent Andy Chapman has testified.

They did their banking in Italy, testimony showed. Chapman said in 2015 the FBI had been stymied in leveling charges against the trio, dubbed by Hofstetter and her workers as “the Italians,” but were continuing to push an investigation.

Stone and Svolto struck plea deals with more than 80 defendants that included promises of cooperation in the investigation.

It was not clear when extradition proceedings will be set for Sartini and Palma. The U.S. Attorney’s Office said Friday that Rodriguez had agreed to surrender, but no other details were provided. Hofstetter has pleaded innocent and remains jailed awaiting trial. A new trial date on the RICO indictment has not yet been set.

https://www.knoxnews.com/story/news/crime/2018/01/19/rico-indictment-opiate-pill-mill-east-tennessee/1049174001/