Combine all ingredients in a large bowl and mix until well blended. Shape the mixture into 3/4-inch meatballs, rolling them gently between your palms.
In a blender, combine the tomatoes with their juice and the chile.
Heat the oil in a 5-quart Dutch oven over medium heat. Add the onion and cook, stirring often, for about 5 min or until tender.
Stir in; cook 30 seconds.
Stir in; heat to boiling over high heat. Add raw meatballs; heat to boiling. Reduce heat to low; simmer, uncovered, 30 minutes.