tv Anderson Cooper 360 CNN July 30, 2013 1:00am-2:01am PDT
i will talk to a woman that says weiner and huma's problems are not private and a matter of judgment. star jones joins me tomorrow. anderson cooper starts right now. tonight a special rehab clinics filing claims for patients and you are paying for it. later it is called the largest sex trafficking bust. 76 cities, 150 ledged predators captured. we will take you inside and talk to child safety advocate and crime fighter john walsh. whoever walked in and walked out with $136 million worth of jewelry in a brazen daytime robbery. we begin keeping them honest with part one of an investigative series we are calling "rehab racket."
as you will see that is what it is. we are talking about the abuse of a state sponsored, tax-funded program that looks like a noble cause on paper, clinics getting money billing for each addict that comes for counseling. they have found a system riddled with fraud and oversight from billing for phony patients to allowing convicted felons to run drug rehab centers. our investigation found it is too easy to take advantage of the people who need the most. this is no nickel and dime fraud. it is happening in california and we are talking big money. tens of millions of dollars, federal tax dollars. it is your money. drew griffin tonight keeping them honest. >> reporter: drew griffin with cnn. how are you? >> reporter: george has run a taxpayer funded drug rehab
business in southern california for six years which is surprising because for the last 11 years he's been on a list of people banned from billing medicaid. convicted of student loan fraud, he should have never been allowed to even open this clinic called gb medical. >> what's going on? >> reporter: i'm asking a few questions about the drug rehab business. you seem to be at the center of fraud allegations here. >> no, no, no. >> reporter: have you been faking signatures on to sheets of paper and billing the state for the money? guess what else, he is facing felony charges for ripping off the state. allegedly paid by taxpayers to rehab drug abusers that weren't even there excuse me, sir. how can you bill for clients that don't exist? mr. aluno, one second, sir.
we never saw him again. his drug rehab business here in southern california has been part of the largest medicaid program in the nation paid for with federal and state dollars. a one-year investigation by cnn and the center for investigative reporting found the rehab portion of the program called drug med cal is ripe with fraud. has operators who bill the government for made up clients and often get away with it. joy saw plenty of fraud in the nine years she spent working as a supervisor over drug med cap. >> i believe the word got out there was easy money to be made in the out patient drug free system. >> reporter: how bad is it? >> it is bad. real bad. i left state service about three
years ago, and we would have one provider that would bill for over $1 million in one year that we believe was 100% questionable billing. >> reporter: that one provider was no isolated instance. over and over, we found examples of fraud. not hidden fraud. this was happening in plain sight. for example george aluno. darshay went there and it is against the law to pay clients but that didn't stop aluno. she said he paid $5 each time they signed in for group counselling. all so he could charge med cal 28 to $61 per signature. >> at first i didn't know it was illegal. i thought it was just a thing you are supposed to get paid for
going there until people are like -- george is like don't speak outloud about the money. >> reporter: what did she do with the $5 given to her by the drug rehab center? she bought drugs. >> i was going to get the money to just buy weed. my whole thing was like you all was paying us to get high. >> reporter: the day after our interview, the state charged aluno and three of his employees at gb medical with grand theft in connection with more than 2,000 phony bills for rehab dating back to 2009. he pled not guilty but records show your tax dollars still paid him, even after he was arrested and out on bachlt his attorney blamed the billing practices on counselors and employees who were not well supervised. the attorney says he was a certified counselor himself, who was allowed to bill medicaid. despite that, the clinic
voluntarily shut down on july 1st, without explanation. cnn and the center for investigative reporting reviewed thousands of records in california's drug med cal program, including program audits. we analyzed patient billings and even watched clinics undercover to see who was getting treatment and who wasn't. the result, we found the last two fiscal years, nearly half of the $186 million spent for drug med cal, about $94 million went to clinics that have shown questionable billing practices or signs of fraud. case and point. the man with the cigar, a convicted felon named alexander ferdman. >> >> reporter: he helped to prosecute him in 2000 for running a texas-based crime syndicate which staged car
crashes ripping off big insurance companies. >> he listed his occupation as driver of an ice cream truck. >> reporter: he pled guilty to organized crime and sentenced to seven years in a texas prison. he served just one year, let out early for good behavior and end up in california. even though felons are barred from running drug med cal facilities he opened one and it has been easy money for ferdman. despite his organized crime conviction, his med-cal contract is worth $2 million a year. his salary, $180,000. even after a 2011 review by los angeles county found evidence of what it considers to be fraudulent practices at his business, ferdman was allowed to
expand. drew griffin with cnn. i'd like to ask you questions about your business. >> i don't have time right now. >> reporter: how can a guy with a record like you operate a drug rehab clinic in california? you have been convicted of a major insurance car crash scheme in texas. >> i was convicted but that is not what it seems. that is first of all and whatever happened 15 years ago what relevance does it have today. >> does the county know about your record? >> they probably do, i don't know. >> reporter: what happened in texas, ferdman told us should stay in texas. >> i was facing 99 years and picked a smaller sentence so that -- i could have it much worse. but there was no fraud and there was no record of it in any way. it's a very long story. >> reporter: that was a huge case in austin, texas, statewide
actually. >> that's what they tried to bill it and that's why they pursued it and it wasn't what it seems and what they said it was. >> reporter: can you tell us how you came here and left texas how easy or hard was it? >> i don't want to talk about it right now. >> reporter: with widespread fraud in the program, former supervisor says it is not just taxpayers who are being cheated. >> i'm not the employee anymore that has to look at this every day but i'm a taxpayer that knows this is going on and it angers me and there's story after story after story about medicaid dollars cut from people who need the services. >> incredible investigation, drew and so infuriating. there's a lot of people that need help and a lot of good clinics and this gives a bad name to the industry. is the state doing anything
about these? >> finally they are beginning to. the state is cracking down. once they realized the depth of our reporting, anderson and it would be aired nationally on your show the state announced a state-wide crackdown. the felon from texas clinic has been shut down. 16 others temporarily suspended and california announced a statewide review of the entire rehab clinic program, although details are sketchy. >> why did it take so long? >> that was my first question to the state of california. as we continue our reporting, i think it will be your questions and all of your viewers' question. as we will reveal tomorrow night, report after report, investigation after rooegs investigation, year after year finds the county and state investigators were finding this fraud, finding questionenable billing practices and the clinics remained open and kept
billing taxpayers for it. >> that is the thing and people aren't getting the help. you can make a difference if you have a tip for drew, go to cnn.com/investigate and let us know what you think of his report. more tomorrow on this. coming up next, the fbi's biggest under cover operation yet on child prostitution and how one armed robber managed to get away with a foredmun jewels. it was originally thought to be $50 million. authorities say some $136 million in jewels was taken from this hotel to the south of france where the chase is on right now. when you're ready to take skincare to the next level you're ready for roc® new roc® multi correxion has an exclusive 5 in 1 formula it's clinically proven to hydrate dryness, illuminate dullness lift sagging diminish the look of dark spots and smooth the appearance of wrinkles together these 5 elements create ageless looking skin
targeting pimps who sell kids for sex. the fbi says 150 pimps were arrested and 05 children between 13 and 17 were rescued. the sting was part of an initiative created in 2003 to rescue sexually exploited kids across the country. a woman who returned to the fbi for help is now speaking out. >> happening here. i think it is a highway and there are women walking. so it happens everywhere. >> i'm 21. i got lucky to walk away from it with arrests, no kidnapping, never got hurt. i'm lucky. like really, really lucky. i'm one of the few that can say that. >> alexandria was 16 when she became a victim of sex trafficking. the fbi is hoping the children recovered over the weekend will help to send their pimps to
prison. crime and justice correspondent is joining me. what's the latest on the sting. >> reporter: they are sorting through the charges will they be state or federal and what about the young women, 105 teenagers between the ages of 13 and 17. the question is what happens to them? it is a lot for the people in the system to do. everybody will have a different story, anderson. >> how did they identify the people they went after? >> they went to venn views where prostitution occurs. the local strip where everybody knows where the prostitutes are, motels, casinos and big sporting events and they are looking at internet sites and think they are getting better at zeroing in on the right targets. >> it appears we are 30 to 40% more successful in identifying victims and pimps on this
operation. if we can hurt refine these efforts in the future we will look to back page and other forums where pimps and exploiters gather and try to penetrate those so that our success rate doubles again. >> reporter: police on the ground help on this. they know what is going on in the communities. they know when there is a child out there walking the streets and which alleged pimps seem to be moving prostitutes from city to city and state to state. >> this took place across the country. >> it is incredible. 76 cities across the country. san francisco seemed of the one of the biggest problems with this. milwaukee, detroit, oklahoma city and smaller cities like jackson, mississippi, who knew there was such a problem there. >> joe, appreciate the reporting. i want to bring in john walsh, child safety advocate and former host of america's most wanted.
they sited it as a place where they found these victims. do you think shutting down these sites will help or do you think it pushes the commerce elsewhere? >> it does. sex trafficking is a $32 billion a year business worldwide. the number one offend and buyer of sex trafficking, particularly with children is the united states. we're a first world country but the biggest offender. it so it is about the commerce but my hat goes off to the fbi and those 230 local and state agencies who partnered up to get these kids off the streets and punish these traffickers. >> backpage.com. we have looked at this a lot over the years and they defend themselves saying they are a great resource for law enforcement. i interviewed the lawyer for back page last.com and i want to
show what she said back then. >> we have 80% of our staff to policing and cooperating with law enforcement to prevent cases of exploitation from making it live on the internet so we can facilitate rescues and cooperate with law enforcement to ensure convictions when there are those opportunities. >> we requested liz mcdougal to join us on the program tonight. she declined. we spoke to the fbi further about the sting and they said a significant number of the people rescued were found on sites like it thaw were found through the combing of the sites not by backpage.com's referring them to the fbi. do you buy back page's argument, john? >> it is all about money. it is not just the fbi. it is many other police agencies, local, national state agencies to point the finger to backpage.com for helping these exploiters of children to function. it is all about the money.
i really think that the public has to say we all want a first -- i mean freedom of press and first amendment. no one wants to sanction or censor the internet but i think the sites have to be held accountable. they are not there as a nonprofit helping law enforcement agencies. they are there because they facilitate these guys. >> it is sickening to hear that the super bowl becomes a hub for child prostitution. >> that's part of america's problem that we seem to ignore. everybody thinks child prostitution and sex trafficking is in countries like india where it is or indonesia or cambodia. i have been to those countries, vietnam. yes, it's a problem there, but we're a first world country and these guys know they go to big events like the super bowl, big sporting events and mutual the
girls around. another difficult problem is that we have over a half million runaways in this country every year. as soon as these kids hit the streets one in three of them are solicited and forced in to sex trafficking. they go state to state. 50 countries provide girls for sex trafficking and boys. nobody's looking for those kids. it's something we have ignored, and i think the public has to say how can a first world country be the biggest offender and biggest buyer of sex trafficking in the world? >> john walsh, appreciate you being on. we will don't follow this. an amazing sting across this country. coming up, a jewelry heist straight out of a movie script. jewels stolen from a hotel where hitchcock filmed the movie "to catch a thief." and edward snowden's father on his fugitive son and his claim that americans don't know the whole truth.
>> it's a story straight out of a hitchcock film. >> filmed on the beautiful french rif yar va. >> reporter: one man walked in to a tell in cannes, france and walks out with $136 million worth of diamonds. >> diamonds the only thing in the world you can't resist. >> reporter: the karlton hotel, the iconic set of the movie "to catch a thief" was the site of the heist. >> nobody stopped him. there was nobody around. just gave him $40 million worth of jewelry. it is just incredible. >> reporter: police say a robber whose face is covered by a hat and scarf threatened to shoot people during the holdup. cannes is known for glitz and glamour, but lately it has become a magnet for jewelry theft. in may a $2.6 million necklace was taken from a hotel party. later that same month, $1
million of jewels were stolen from a safe in a hotel. the latest heist is two days after a member of the notorious pink panther jewel thief gang escaped from a swiss prison. it is too safe to say there is any link to this incident. authorities are looking through surveillance footage of the crime. >> diamonds are like cash. the most concentrated form of wealth on the face of the earth. they can be very influential in acquiring weapons, drugs or anything else that we want to keep out of society. >> it is unbelievable that someone somethinged to escape with $136 million worth of jewels in broad daylight. why wasn't there more security? >> that's the question of the day, anderson. prosecutors are saying there was security present during the time of the heist. though that security was unarmed and say this was meant to be a temporary exhibit at the hotel set to expire in august.
so the security in place, one can assume, was temporary. neither the hotel or diamond house are saying more than that. it is interesting to walk through the lobby of the carlton hotel and you would never know this kind of heist happened yesterday. it was business sz usual and jewelry on display, diamonds, sapphires and fine furs for sale and low key looking security but the exhibition in question but the leviev exhibition was closed. >> there is a lot going on. >> pope francis appears to be softening the vatican's tone on homosexuality. he said if someone is gay and seeking the lord and has good will who am i to judge? he was answering questions about
the alleged gay lobby inside the vatican. on the senate floor john mccain got emotional paying tribute to his vietnam prisoner of war cell mate. bud day died at the age of 88. he credits him with keeping him alive in captivity and he choked back tears during his tribute. >> tough old bird that he was, i always thought he would outlive us all but he is gone now. heaven i expect would look like an iowa corn field in early winter filled with pheasants. i will miss bud every day for the rest of my life but i will see him again. i know i will. i will hunt the field with him and i look forward to it. >> in fort meade, maryland, manning will learn tomorrow if he is found guilty of aiding the enemy. he's accused of the largest leak
of u.s. classified information. authorities say a woman was arrested after tossing green nant two locations inside of the washington national cathedral. it is unclear if she is connected to the splashes of paint at the lincoln memorial and smithsonian statue. just bizarre. >> thank you. by now pretty much everyone knows about edward snowden, knows who he is. tonight we will talk to his dad. no one knows him like his father and says there is more to the story than the public this and knows and we will talk to him ahead. you're ready for roc® new roc® multi correxion has an exclusive 5 in 1 formula it's clinically proven to hydrate dryness, illuminate dullness lift sagging diminish the look of dark spots and smooth the appearance of wrinkles together these 5 elements create ageless looking skin roc® multi correxion 5 in 1 it's high performance skincare™ only from roc®
that but first how he got here. >> i'm edward snowden. i'm 29 years old. >> reporter: he showed himself to the world as the source behind the nsa leaks. snowden revealed the u.s. government had forced verizon to hand over phone records of millions of americans. he revealed a secret program used by the nsa called prism, which gives the government direct access to google and facebook. he gave this interview to the guardian. >> i think the public is owed an explanation by the people that make disclose yours outside of the democratic model. >> reporter: he hid his location revealing he was in hong kong and hinted at a life on the run. >> i could be rendered by the cia. i could have people come after me. and that's a fear i will live under the rest of my life, however long that happens to be. >> reporter: reaction was mixed. a hero to some. to others -- >> this guy is a traitor,
defector. he is not a hero. >> giant violation of the law. >> traitor. >> five days after his identity was revealed he was charged with espionage. they sought his extra diction from hong kong and revoked his passport. days later he managed to board a plane bound for moscow with the help of wikileaks. he again fwhent to hiding never passing through immigration and staying in the airport's transit zone with people all over the world looking for him. >> no sign of edward snowden. no one knows where he is. >> moscow was never intended as a final destination. he applied for asylum in 20 countries and for now is in a transit zone keeping largely out of site except for one press conference he gave two weeks ago. >> a little over a month ago i had a family, a home in paradise and i lived in great comfort. i also had the capability
without any warrant to search and seize and read your communications. that is the power to change people's fates. it is also a serious violation of the law. >> snowden has applied for temporary asylum in russia saying he would be tortured and face the death penalty if returning to the yiechlts eric holder assured the russians that the u.s. will not seek the death penalty if snowden returned to stand trial. so far the russians refused to hand him over. he remains in the airport and according to his lawyer he is studying russian and may stay in the country long term. joining us now is edward snowden's father and his attorney. appreciate your being here. first of all, your son obviously still in the airport. have you been able to communicate with him? do you know how he is doing? >> we have been able to communicate with him indirectly and i believe he's in reasonably good spirits. >> how does he look to you in
that press conference? >> he looks as if he has lost a little bit of weight. needs a hair cut but overall he looks reasonably well, given his circumstances over the past 65 days. >> last week, on nbc, you said the american people don't know the whole truth. the truth is coming. what do you think people don't understand about what your son did? >> i think probably the large majority of americans, first of all, have not seen his 12-minute video. i've spoken to close friends who know this is my son and we talk. i realize they haven't listened to the video. they don't really understand what the fourth amendment is. so, i think there's much that's unknown. the american people, the media to be quite honest, has not done a very good job of laying out the facts in digestible form. there's been a clear effort by those who have been threatened politically and/or embarrassed by these revelations to focus on
the so-to-speak sin, my son that revealed these instead of the sins, the actual revelations. it is clear they don't want to discuss that. when i say the truth is coming, there are certain folks, myself included that will push and push and push until we have a well-informed public and they have the fakts and make their own determination. >> the conversation we are having tonight, the strong debates that have occurred in the congress most recently a vote that lost by 12 votes to shut down nsa programs. the fact there are three hearings on wednesday. they are all responsible because of what ed snowden did. we had the director of national intelligence office say their goal was to keep the program secret forever. they tried. the only reason it was broken in to the public is ed snowden's courage. the members that knew about this were cryptic in explaining what was going on. despite they had a
constitutional privilege to disclose this to the american people ed snowden made the democratic process work. the things we are talking about today, do we really need these kinds of programs. >> one of the things your son said is that he is sitting at his desk, a contractor could gain access to anybody's e-mail if he had the address, even the president's e-mail. a lot of officials say this no, that is not true. he is overstating his own importance. greenwald who received information from your son said he has new reporting which actually confirms what your son had been saying that contractors, low-level people, at their desk at the nsa and other contracting agencies could gain access to tons of phone calls, which are in data storage bases or people's e-mails. there's going to be testimony on wednesday. how confident are you that the truth of that will come out? >> well, i'm not sure if it will come out in the senate judiciary
because the same people that sat in front of the house judiciary who were really grilled. i absolutely compliment those members on the house judiciary for i believe it was last wednesday, or the week prior, when they grilled the same individuals that are going to sit in front of the senate judiciary but i'm disappointed it is the deputy attorney general instead of eric holder sitting there and the general counselor instead of james clapper sitting there under oath again and the deputy fbi director instead of mueller sitting there answering these questions. >> if i could add, anderson. remember, the people that are going to be testifying are working under the aegis of the director who when confronted bay question of senator ron wyden, are you collecting data on hundreds of americans, director clapper said no. a flat out lie which he tried to defend as a small untruth. >> he said not wittingly.
>> not wittingly. and he has a trillion dollars of megabits unwittingly but we are to rely on their self assessment of whether these technologies exist. we need outside auditing of what the nsa has been doing all of these years. the nsa at present doesn't have someone who is not part of their overall program examine whether they are complying that they not look at the contents of information unless they have reasonable suspicion or otherwise and why would we expect an agency to call its own people to account? >> in a letter to the justice department, to the obama administration you describe what your son did as civil disobedience. some say civil disobedience is accepting the ramifications of your actions, of the decision, of taking the punishment. why do you see this as civil disobedience. >> first of all, i think he is accepting the consequences. if you look at his 12-minute video and what he said.
he is not living a comfortable life at this point. he is an american and loves his country. i know my son and that he loves his country. he thought the mern people needed to be aware of what their government was doing to them, spying on them. >> i would interject with the issue of civil disobedience. anderson, if it were true that there was a comfort level that a fair trial would be offered to mr. snowden your question would be more -- we have had four, five, six members of congress convicting edward of treason and haven't had a trial, haven't had a grand jury indictment. they are already saying he is guilty of treason. we don't have the attorney general saying he enjoys a preis assumption of innocence. we have the president of the united states denigrating him as a hacker. the president said it was
urgent. >> the president said he wants this conversation. this is the conversation the american public need to have. do you believe that? >> no, i don't. words mean one thing and actions mean another. that's the same way with our national character. i'm really disappointed by what i have seen. our national character much as with individuals, is determined by what we do when we think that no one is watching, when we think we won't be held accountable. it's not just a matter of what's legal, what is constitutional. it is a matter of what is ethical. >> think of this oddity as well. the attorney general writes a letter to the ministry of justice in russia and he has to go out of his way saying we won't torture edward if he comes back. we have to give assurances that we won't torture you like manning. >> do you believe that when he say that, no death penalty and the united states doesn't torture? >> at this point, i believe it would be the best interest of the justice department and we
have worked with the justice department and people investigating this and i do not believe that that collaboration, the good faith exists anymore. i'm very disappointed. we have attempted to get assurances that ed would receive a fair trial. i have no faith in eric holder the attorney general of the united states. none. >> you don't believe your son would receive a fair trial? >> absolutely not. not at this point. absolutely not. >> a couple of the things the attorney general admitted in describing the fair trial edward would receive is the right to confront the evidence or witnesses against him. no secret evidence. the right that edward twouf summon witnesses in his favor. no prumpgs presumption of innocence. >> when you see the way bradley manning was treated and the conditions he was confined in, do you believe your son would be
held on those same conditions? >> no. because i think that was so embarrassing to our government and the people responsible for it. but it makes clear what this mindset is. president obama, when he was first running for president, he talked about how he -- how important whistle-blowers were. let's go back to june 7th, after this story broke, he told the american people, hey, we're not reading your e-mails and we're not listening to your phone calls. on june 8th, a link on the white house website, that was linked to his language regarding whistle-blowers and their importance, that disappeared. >> we already know that is false. the "new york times" reported long time ago that the nsa was listening in to conversation between wives and servicemen serving abroad. >> there are those who see your son applying for temporary asylum in russia and look at russia and say that's a government that has its own
intelligence apparatus and does not value descent from the top down. should the place where your son is looking for, should that impact the way people look at what your son did? >> i think they have to look at this in context. what choice does he have? he was attempting to go elsewhere. clearly our government forced down the aircraft of morales, who was returning to bolivia. again, i know that boll live ya, we have operatives in peru and colombia. i don't believe that would be a safe place for him. i'm not sure what would happen if the went to ecuador or venezuela. >> you think russia is the best place for him. >> i absolutely believe russia is the best place for him at this point and it is our government, the obama administration that has caused that. again, he was looking at going elsewhere. at this point, i would hope -- i
make no apologies. i would hope he remains in russia until we have assurances that he would receive a fair trial here and much of that depends on another presidential administration. >> there's another tlamt has not been discussed and that is a possibility that we have agreements with foreign intelligence agencies for them to circumvent the limits the nsa has on spying on americans an then we spare on their people and share the information and intelligence. we know the uproar in europe about spying on their citizens but the intelligence agency said nothing. that is a worry that even the limits we would place on the nsa would be circumvented by saying why don't you spy on american citizen you hand the information to us. >> thank you for being on. coming up next, pastor rick warren returns to the pulpit after the death of his son. to fight it... to investigate it...
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to pennsylvania tomorrow. he's accused of poisoning autumn klein a urologist with a lethal dose of cyanide. the leader of a california mega church spoke about the mental illness his son struggled with and spoke about erasing the stigma surrounding it. country fast food workers are calling for higher wages and the right to unionize. workers a wendy's, mcdonald's and burger king restaurants walked off the job demanding at least $15 an hour. anderson will be right back with the ridiculist. ♪ [ female announcer ] when your swapportunity comes, take it. ♪ what? what? what? [ female announcer ] yoplait. it is so good. i've got a nice long life ahead. big plans.
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she describes it as a springy way of moving forward and you can only imagine my elation hearing there is a new prancercize video. please, take a look. ♪ little more mellow. pretty much like the first one. different outfit. same mesmerizing moves. that was pretty low impact. so let's pick up the pace, shall be. >> we are going to pick up the pace with the prancercize trot. sure beats staying home beginning to rot. >> reporter: oh, joanna, you
complete me. i'm not the only one enchanted by prancercize, he was asked to be in a video for "paper doll" ♪ paper doll come try it on ♪ step out of that black chiffon ♪ ♪ here's a dress of gold and blue ♪ sure was fun being good to y you ♪ >> maybe i'm a purist. my favorite is the original. you never forget your first love. ♪
please keep the videos coming. just keep prancercizing and putting a spring in our step because our explosions rocking a florida town overnight. a giant fireball filling the sky. several hospitalized. rest againsts evacuated as a propane plant goes up in flames. why would someone do this? national landmarks vandalized splattered with green paint an a woman behind bars. this morning investigators are asking could she have acted alone? >> how did they do it, heist of the century, a thief making off with $136 million in jewels from a luxury french hotel. how exactly did he do it? we're live in cannes. >> there's something fishy with that. >> seems straight outf
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