Return to Transcripts main page


Bernard Madoff Behind Bars; Optimist in Chief

Aired March 12, 2009 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: He said he always knew this day could come. Now Bernie Madoff is in jail and speaking out about his crimes in court.

Tonight: his plea, the search for the billions he stole, unraveling the mystery of how he did it, and for all of us how not to fall victim to the next Bernie Madoff -- all the angles tonight.

Also ahead in this hour: President Obama's new message to business leaders, defending his economic policies and his new mission, trying to talk the economy back to life. The market is up, so, is he on the right track? We will investigate that.

And, later, Mexican drug gangs recruiting killer kids here in America. Don't believe us? You will see their confessions on tape. Some of them will leave you speechless, including one from a killer who did his first deadly job at the age of 13.

Also tonight, Oprah Winfrey's advice, not just for singer Rihanna, but for millions stuck in abusive relationships: Get out now. Oprah devoted an hour to the subject. We will pick up where she left off.

We pick up and begin tonight with Bernie Madoff, who now holds the sick distinction of being second only to Nazi German when it comes to how much money he stole. One hundred and fifty billion dollars was stolen by the Nazis during the Holocaust, as much as $65 billion by Bernie Madoff.

He's in jail tonight. Chances are he will die there. In a moment, his plea and all the questions it left unanswered.

First, though, the raw outrage from victims who came to Manhattan just to see this day.


UNIDENTIFIED MALE: I was retired. I had moved to Florida. I was starting over. And now I have had to move back to New York, move in with a parent, at 52 years old.

UNIDENTIFIED FEMALE: Bernie Madoff is some like little maggot that crawled out from under a rock and managed to have a brain enough to do something that injured a number of people. I can't waste time on him.

UNIDENTIFIED MALE: You know, he's going to be sentenced for 150 years. I hope he lives a very long life.


COOPER: People who lost everything.

Bernie Madoff also wiped out charities and foundations and university endowments. You can certainly understand the rage.

Tonight, we will try to understand the crime, the punishment.

We begin with Joe Johns.


JOE JOHNS, CNN SENIOR CORRESPONDENT (voice-over): What may very well be the final steps of freedom for perhaps the most despised man in America. Bernie Madoff entered a federal court in Manhattan today and pleaded guilty to the greatest investor fraud in U.S. history.

The 70-year-old former Nasdaq chairman confessed to stealing $64.8 billion from at least 4,800 investors around the world.

"I operated a Ponzi scheme," he said. "I'm here today to accept responsibility for my crimes. I realized that my arrest and this day would inevitably come."

Before pleading guilty to the 11 charges against him, Madoff detailed a decades-long swindle. Celebrities, universities, charities, and ordinary people trusted him with their money. In return, this is what he now admits he did.

"I never invested these funds in the securities, as I had promised," Madoff said. "Instead, those funds were deposited in a bank account at Chase Manhattan Bank. When clients wished to receive the profits they believed they had earned, I used the money in the Chase Manhattan Bank account that belonged to them or other clients to pay the requested funds."

He admitted to lying to clients and to the SEC, which, despite several investigations, found no evidence of wrongdoing. Madoff also defended his trading firm, run by his brother and sons, calling the company "legitimate, profitable and successful."

As for all the lives he destroyed, "I am painfully aware that I have deeply hurt many, many people," Madoff offered. "I cannot adequately express how sorry I am for what I have done."

After the plea, bail was revoked. He was handcuffed, and, through an underground passage, escorted to his new home, a jail. It overlooks the court and sits just blocks from where he built his house of cards.

Madoff will be confined to a small cinder block cell like this one. He will be sentenced in June and faces up to 150 years in prison, which will satisfy some victims. CYNTHIA FRIEDMAN, MADOFF VICTIM: I think he should rot in hell. He's evil. He's evil. He's way up there with all the evil people in the world.

Joe Johns, CNN, Washington.


COOPER: Well, whatever satisfaction people got from seeing him frog-marched off to jail, tonight, they don't have the money that Bernie Madoff stole.

Some no longer have loved ones, who lost everything and then took their own lives. At the end of the day, investigators do not yet have answers to a lot of questions, including how this guy did it, where the money is, and who else helped him carry out the crime of the century.

More on that now from Randi Kaye.


RANDI KAYE, CNN CORRESPONDENT (voice-over): The Madoff mea culpa, a guilty plea from the world's biggest swindler. But does that really mean case closed? Hardly. Just unanswered questions. Where is the money?

Attorney Ross Intelisano has 25 clients, who he says lost $100 million with Madoff.

(on camera): Will investors get any of their money back?

ROSS INTELISANO, ATTORNEY FOR MADOFF VICTIMS: The investors who directly invested with Madoff have what is called SIPC claims, which can pay them back up to $500,000 per account. The people who got to Madoff through third-party advisers or feeder funds do not have SIPC claims.

KAYE (voice-over): What about investors who made money? Will they have to give it back? Those so-called profits were actually other investors' money.

INTELISANO: What the trustee has indicated is that he will probably go after people for their false profits.

KAYE: Leaving one investor outside court bewildered.

RICHARD FRIEDMAN, LOST $3.1 MILLION IN MADOFF SCHEME: Madoff investors paid in hundreds of millions, if not billions, of dollars in income taxes on phantom income that never existed.

KAYE: Will investors get back those taxes paid?

UNIDENTIFIED MALE: They may have been barred from now seeking refund of those taxes, because it's outside the three-year window.

KAYE: The three-year window for claiming refunds.

What about that Chase Manhattan Bank account Madoff says he used to pay investors?

INTELISANO: If this Chase account was the account in which the fraud took place, they're going to follow that money.

KAYE (on camera): Is it possible that Bernard Madoff acted alone here?

INTELISANO: No, it's impossible. Bernie is 70 years old. He wasn't in his office just pumping out statements by himself. He clearly had an army of employees who were creating fake monthly statements, fake confirmations on trades.

KAYE: The question is, who are those people and where are those people? Court papers say Madoff hired employees with little or no experience to generate fraudulent documents, including client account statements and trade confirmations.

And what about Madoff's family? Were they involved? His sons were both executives for the firm, but say they knew nothing about the fraud.

(voice-over): So much we still don't know, except how those swindled by Madoff feel about him now.

UNIDENTIFIED MALE: He's a sick man.

KAYE: Randi Kaye, CNN, New York.


COOPER: Well, Randi covered just some of the questions with few or no answers.

Tonight, there's also this: Where were the regulators? Where were they, the people who were supposed to be looking out for all of us?

In 1999, analyst Harry Markopolos wrote the SEC calling Madoff Securities the world's largest Ponzi scheme, and no one listened. You can bet they were listening last month at the congressional hearing. Take a look.


REP. GARY ACKERMAN (D), NEW YORK: One guy, with a few friends and helpers, discovered this thing nearly a decade ago, led you to this pile of dung that is -- that is Bernie Madoff, and stuck your nose in it, and you couldn't figure it out.


Could you explain yourselves? (END VIDEO CLIP)

COOPER: Well, they couldn't.

Digging deeper now with senior legal analyst Jeffrey Toobin and chief business correspondent Ali Velshi.

You know, Jeff, I read Madoff's entire statement that he made in court today. Unfortunately, there were no cameras present, so we can't show it to you. And, you know, he said he was sorry and stuff, but there didn't really seem any of him in the statement. It seemed like a very lawyerly type statement.

JEFFREY TOOBIN, CNN SENIOR ANALYST: It was very lawyerly, but there were also some very interesting clues about what might have gone on here.

You will recall that his -- his claim is that he ran this corrupt money management business, but the trading operation run by his sons and by his brother was clean as a whistle. But, in his statement, he says that 4 cents for every trade, trades which didn't happen, went from the corrupt enterprise to the legal enterprise.

Well, how could the people at the legal enterprise, who were getting all this money from the fake trades, not know what was getting on -- going on? So, even though he was trying to say his relatives had nothing to do with this, I think he raised even more questions that maybe they did.

COOPER: Ali, it seems impossible that -- that someone else in that office didn't know what was going on. I mean, I don't care -- I don't care if he hired functional morons. After a couple of years of making fake -- fake statements, someone would catch on to what they're doing.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, I -- I -- one of the questions that I was speaking to somebody earlier, and somebody mentioned to me, what exactly was he doing? Because, if he claims that he didn't make a single trade in the entire time he ran this thing, what was he doing, crossword puzzles?

I mean, clearly, there was something going on there. You can't -- you can't fake an entire trading operation for more than a decade. So, there -- there are some answers to be had. But the point is, he had no incentive to -- to provide any of those answers, because he claims that he did all of this himself. He didn't cut a deal with the prosecution. And he's going to jail for the rest of his life.

So, where's the incentive to have -- to have told anybody anything? It's -- it leaves investigators with a lot of work to do. And the SEC, as you mentioned, has got a -- quite a black eye over this one.

COOPER: It was interesting. In his statement, Jeffrey, he said, you know, he started this, he -- as -- as per his recollection, sometime in the '90s, and he thought it was only going to be for a short time during a recession. But, you know, then it just kind of escalated.

TOOBIN: It just kind of escalated, but he left out one critical part of the story.

He said, well, it just became impossible to stop.

No. He was making millions and millions of dollars in this crooked enterprise. That's why he didn't stop, not because it was impossible to stop, because this was an absolutely sensational gig, which, unlike most Ponzi schemes, which tend to fall apart pretty quickly, this went on for nearly 20 years.

COOPER: We're going to have to leave it there.

Oh, Jeff, very briefly, is he going to spend the rest of his life in jail? I mean, is this guy going to die in prison?

TOOBIN: That's what -- I -- I don't see much alternative to that. Given what the likely sentence is, I think it's virtually certain he will die in prison.

COOPER: All right, Jeff Toobin, thank you, Ali Velshi as well.

Anger, outrage, you have heard it so far, unanswered questions.

Let us know what you think. Join the live chat happening now at AC360.com. Also check out Randi Kaye's live Webcasts during the breaks tonight.

Up next: Wall Street prison consultant Larry Levine -- that's right; it's now a business -- on what Bernard Madoff's life in prison will be like.

And, later, President Obama pushing back against critics who say his recovery plan adds up to a government takeover of American business.

Also, incredible footage of a life-and-death struggle between man and shark.

And the Chris Brown-Rihanna story -- alleged abuse now the focus of an hour on "Oprah Winfrey," what she said today about why millions of women suffer again and again and again -- ahead on 360.


COOPER: We're talking about Bernie Madoff, who woke up this morning in his penthouse apartment on Manhattan's Upper East Side and who is now, tonight, bunking down -- and every night until June -- in a cell like this one at the Metropolitan Corrections Center, seven- and-a-half-by-eight-feet, as small as a walk-in closet, breakfast at 6:30. Unclear if he will have a cell mate, but that's just the beginning.

In June, he will be sent to a federal prison. With us now is Larry Levine, a former federal inmate who now runs Wall Street Prison Consultants, a business instructing future inmates on prison life.

Larry, what do you think Bernie Madoff's life is going to be like in prison?

LARRY LEVINE, WALL STREET PRISON CONSULTANTS: Very lonely. He's not going to have any friends. No one's going to want to have anything to do with him, because the inmates who are in custody with him, their friends, their family members, they're all going to be suffering from the recession, losing jobs, losing their retirement plans.

And they're going to be blaming Bernie, whether he be directly responsible for it or not. He's going to be an outcast. He's going to be viewed kind of like maybe child molesters are or people who are in there for kiddie porn. No one's going to want to have anything to do with him.

COOPER: Well, what about...

LEVINE: And that's not just the inmates. It's the correctional officers also, because their...


COOPER: Well, I was going to say, what about the guards, because everybody is suffering from the recession?

LEVINE: Well, he's also -- he's going to be lonely, because they're going to have what's called a town hall meeting, the correctional staff, and tell people, Bernie is off-limits; leave Bernie alone.

No one's going to want to have anything to do with him. He's going to be radioactive. And he's going to have a real lonely time. Where most people have an out date -- that's what you're looking at -- you're looking at getting out -- he has nothing really to live or to look forward to.

COOPER: Is that...

LEVINE: It's going to be a...

COOPER: Is that -- is that bad, though, to be lonely in prison? I mean, isn't it -- is it kind of a blessing for him, to just be on his own? Or does that make the time even harder?


LEVINE: Well, first of all, in prison, you don't trust anyone, OK?

But you find two or three people that you get kind of close to, and you run with them. I don't mean run physically, but -- that's a prison term -- that they're your friends and you do things with them. You watch TV. You go to the movies. You play cards. You work out, whatever.

No one is going to want to do anything with Bernie, nothing. He's going to be an outcast.

COOPER: Is his life -- his life, I guess, I mean, many people's lives, high-profile prisoners' lives are in jeopardy when they're looked up, I guess he especially.

LEVINE: Well, let's take Conrad Black as an example. People probably cozied up to Conrad, because Conrad still had money. They could do -- Conrad could do something for them.

What could Bernie possibly do for anybody? Nothing. He's -- he's worse than a child molester. He destroyed the future hopes and dreams of generations of people.

COOPER: What -- you advise clients, I guess, like him, although, frankly, we haven't seen anybody like him come to the fore yet. He's sort of a class unto himself. What would you advise him, in terms of, you know, doing his time?

LEVINE: I would tell him he needs to keep his mouth shut, not become confrontational with anyone, and show the ultimate respect.

When you get inside a prison, whether it be a low-security, medium- or high-security, you have to show respect. There's a lot of tension in prison. And Bernie is used to -- he's very arrogant. You can tell by the constant smirk on his face. He's used to getting his own way.

And, on the inside, he's going to be a nobody. And I don't think he's used to that. And he's going to run into problems because of that. He needs to run with himself. He needs to immerse himself into the prison society. You know, he's not going to go to a club fed camp. He's not even going to go to a low.

Based on his sentence, I'm looking at medium custody, possibly Otisville, New York, at the medium federal prison. It's going to be the lonely existence. And he's going to be scrutinized.

And there's other implications as well. I mean, the man stole maybe $50 billion, by $65 billion. Just think of the people he did not tell on. OK? And who knows who it is. International bankers? Bernie is hiding a secret.

And the Justice Department is going to have a problem, because there's probably a hit on Bernie. Somebody wants to put a bullet in his head or kill him to keep from talking. And these correctional officers, they don't make a lot of money either.

So, I see someone down the line bribing somebody and taking Bernie out. The only way he's leaving the prison is in a pine box, and that's it.

COOPER: Larry Levine, we appreciate you being on. Thank you, Larry.

President Obama's new, more optimistic message on the economy, have you heard it? You may be surprised to learn just how optimistic some Americans are right now as well.

David Gergen and Roland Martin weigh in on that.

Also, later tonight: Michelle Obama's first trip out of Washington on a mission as first lady, her message for the troops.

And we have known Mexico's drug war is bad, but now American teens are getting hired as assassins for drug cartels in Mexico. Why they do it, their own chilling confessions, you will hear those -- ahead tonight.


COOPER: Here's some good economic news: Wall Street is on a winning streak. When was the last time you actually heard that? Stocks soared 240 points today. Since Monday, the Dow is up 8.2 percent.

Today, President Obama was pushing his economic plan, speaking to business leaders. The president said his sweeping proposals will work, but he prepared for a whole new -- but be prepared for a whole new world.

Take a listen.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We cannot go back to endless cycles of bubble and bust. We can't continue to base our economy on reckless speculation and spending beyond our means, on bad credit, and inflated home prices, and overleveraged banks.

This crisis teaches us that such activity is not the creation of lasting wealth. It's the illusion of prosperity. And it hurts us all in the end.


COOPER: President Obama is now playing the role of optimist in chief.

And a new survey out tonight shows that many Americans are feeling confident about the future. We have got the results of that survey for you.

We're also joined by senior political analyst David Gergen and political analyst Roland Martin for tonight's "Raw Politics."

David, the Pew Foundation released a survey, a pretty surprising survey. Nearly eight in 10 people polled said they believe it's still possible to get ahead in the current economy. Where -- what do you think the optimism comes from? DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: It's interesting, Anderson, because the facts don't bear it out so much.

You know, the same -- the same group has found that about 42 percent of Americans who are born on the bottom rung of society wind up there a generation later. They stay on that bottom rung. Only about 6 percent make it up. We have -- it's a problem of what's so- called sticky floors.

But this survey shows that most Americans still believe that there is upward mobility, that they can make it through hard work, through thrift, you know, living well, disciplined work.

That's an encouraging sign. It means that -- and I think it's partly -- I think it's partly the Obama effect. I think that he has been a -- had a -- sent a -- sent a very encouraging signal to minorities, to blacks, and to Hispanics. And I think that helps to bolster these numbers.

COOPER: Well, it's interesting, Roland. Looking -- if you were looking to the future, 65 percent of African-Americans now say that it's going to be the same or easier for their kids to move up the income ladder. Well, if you look at this poll, only 34 percent of whites feel that way.

Is that surprising?

ROLAND MARTIN, CNN CONTRIBUTOR: Well, it doesn't surprise me in the sense that you have African-American in terms of from one generation to the next, in terms of being more educated and going to the next level.

But, also, I think, if you begin to ask those whites some other different questions, look, the nation is changing. And that is, we're becoming more a majority minority country. So, when people -- when you ask various whites, in terms of opportunities, they don't necessarily see their kids having the same advantages, if you will, that they may very well have had.

And, so, I think you see that breaking out there. But, again, to David's point about optimism, everybody has the sense that, from a long-term standpoint, you are likely to get better. This is a long- term thinking, vs. the short-term, what we keep hearing every day on everywhere around the place: Oh, it's -- the economy is getting worse.

Long-term, you naturally think, we're going to get out of this.

COOPER: Do you think any of this, though, Roland has to do with -- the confidence among African-Americans, more so than among white Americans, has to do with Barack Obama being elected president?

MARTIN: Well, look, not -- not necessarily, because when you -- when you look at the results, and when you see that, as -- as one of the things that David pointed out, in terms of where people are now, and they're -- where their parents are, they're likely going to be there as well.

But, also, African-Americans right now, or this suggests they're going to be making less than their parents actually did. And, so, I won't necessarily say that it is because of President Barack Obama, although I think, as he continues to talk about parental responsibility, talk about the importance of education, that you're going to see people recognize that those are critical elements in order to achieve success.

This poll indicates you cannot have success in this country if people do not factor in savings, do not factor in education. You can't have 35 percent of young black men in Chicago and 25 percent in Detroit and numbers elsewhere not graduating from high school -- only those -- those numbers graduating from high school, to think you're somehow going to have mobility in this country.

COOPER: It's interesting, though, David. When you look at this -- this Pew poll, Americans seem to care more about opportunity than -- than inequality.

Seventy-one percent said it was more important to give a person a chance to succeed. Only 21 percent said it was more important to reduce inequality.

GERGEN: Yes, that's -- it's always been so interesting, Anderson.

The belief in upward mobility in this country has been a major factor in why taxes have not been that high in America, because so many people in the middle or in the bottom think they can make it to the top rung.

So, we even had the Black Caucus a few years ago opposing really, really high estate taxes. They thought, well, hey, we have got a real chance to make it.

But the other thing, Anderson, I do want to come back to, I think today, with this, we have had some good news from the banks in the last -- three major banks have reported better profit outlooks here in the last couple of days. The -- the markets, as you say, have had three really good days, best days since November.

I think President Obama did a good thing, a smart thing, today in reaching out to the business community, because we have been talking about this alienation with the business community, reaching out and assuring them that he's a free-market man. I think it was smart today, and also meeting with the travel industry today to say, he really does want people to have a chance -- conferences to be held in places like Las Vegas.

I think the White House is getting the message, we need to talk to the business community and embrace them more than we have.

MARTIN: Hey, Anderson, on opportunity and equality, but here's where folks think, they understand that, if you give folks the same fair opportunity, you can wipe out inequality. When you hear people talk about equal funding when it comes to public schools, they're not sitting here saying that, oh, we want more.


MARTIN: They're simply saying, no, if you give a kid the same opportunity in an inner-city school as in a suburban school, then you're going to be able to have an equal playing field.

COOPER: We're going to talk more with Roland a little bit later on in the show.

David Gergen, thank you very much.

We told you about the drug murders plaguing Mexico and the U.S., but you're going to be shocked tonight to hear who is committing some of these heinous crimes -- American teenagers hired as assassins.


UNIDENTIFIED MALE: That's one thing you wonder all the time. You know, what's -- what made them -- what made them be this way? You know, what made them turn? Where -- where in their life did they turn?


COOPER: Later, a deep-sea struggle caught on tape -- see what happened when a fisherman encountered a 12-foot shark.

And Chris Brown's arrest for allegedly beating his girlfriend has sparked a nationwide conversation on domestic violence. Oprah Winfrey, Tyra Banks and our own panel all weigh in.


COOPER: A warning: Some of what you're about to hear in this "360 Dispatch" is disturbing. It's about the victims of an escalating drug war between vicious drug cartels and the Mexican government: shoot-outs, decapitations. Thousands have died.

The violence is spilling across the border into the U.S. -- we all know that -- forcing governors of border states to now ask President Obama for help, military help, if necessary.

Yesterday, the president said he'll think about it. But the drug cartels are on the warpath now. As Ed Lavandera reports tonight, they are rounding up American teens to do their dirty work, creating cells of hit men, turning some teens into deadly assassins. Take a look.


ED LAVANDERA, CNN CORRESPONDENT (voice-over): Moises (ph) Garcia had just finished a family lunch in Laredo, Texas. Garcia helped his pregnant wife and 3-year-old boy into their white Lexus. LORI GARCIA, SON KILLED: This guy just came out of the car and just started shooting.

LAVANDERA: Garcia was a wanted man. He had a $10,000 bounty on his head. Garcia's wife was shot in the chest. She and her son survived, but Moises (ph) was dead.

L. GARCIA: He didn't have a chance with anything.

LAVANDERA: Garcia's murder at first looked like an isolated gangland style killing. But there were more: seven murders in a year- long stretch. There was something more sinister brewing.

Then Noey Flores (ph) was killed, an innocent victim in a case of mistaken identity. Investigators found fingerprints on this cigarette box in the shooter's getaway car. The chilling truth unraveled. The clue led police to Gabriel Cardona and Rosalio Reta, American teenagers working as Mexican drug cartel hit men in the United States.


LAVANDERA: Assassins is what they were. How Gabriel Cardona and Rosalio Reta evolved from average teenagers into hit men is laid out in court records and these police interrogation videos obtained by CNN.

In this tape, Reta happily details how he carried out his first cartel assassination at the age of 13. "I love doing it. Killing that first person, I loved it. I thought I was Superman," said Reta.


R. GARCIA: You wonder all the time, what made them -- what made them be this way?

LAVANDERA (on camera): Like many Americans, these teenagers started hitting the cantinas and bars just across the border in Mexico. That's where investigators say the cartel was waiting to recruit them.




(voice-over) Prosecutors say Cardona and Reta were hit men for the Zetas, a group of former Mexican special military forces that do the dirty work for the notorious Gulf cartel.

URIEL DRUKER, ASSISTANT WEBB COUNTY DISTRICT ATTORNEY: They actually, you know, enjoy it and laugh about it. They compete, you know, discussing their exploits about conducting these activities.

R. GARCIA: They're already here. They're sleeper cells. They're already here in the U.S. Not just in Laredo. They're all throughout the U.S.


Cardona and Reta are in prison now, serving long terms for murder. Before they were arrested, federal authorities recorded a phone call between the two young men. Cardona brags about killing 14- year-old Inez Villareal, the innocent cousin of a Cardona enemy, who was also murdered.

Cardona laughs about torturing both, making "giso" (ph), or stew, out of their bodies in large metal drums. Villareal and his cousin have never been found.


Ed Lavandera, CNN, Laredo.


COOPER: The next generation of killers right here in America.

We're going to dig deeper into how the drug cartels work. A filmmaker spent years documenting the drug wars, one of the few journalists who actually talked to active cartel members and lived to tell about it. Up next, he'll tell us why drug lords are turning to American teens.

And later, moving from deadly drug violence to physical violence at home. Chris Brown, Rihanna, real-life examples of alleged domestic abuse, the focus of Oprah's show today. We'll show you what she said and what others are saying now.


COOPER: Let's dig deeper now into the ruthless world of Mexican drug cartels. They're sowing a path of murder and destruction and spilling across the border. We know Mexican cartels are now the biggest organized crime threat in America, and the Justice Department tells us that. Government officials consider them a national security threat.

And now we're learning about another side to the drug wars: Mexican cartels recruiting young kids, teenagers, and turning them into assassins. Rusty Fleming has spent years documenting the drug violence in Mexico. He's made a documentary film, "Drug Wars: The Columbianization of Mexico." He joins us now.

Rusty, how do they recruit these American teens to become hit men?

RUSTY FLEMING, DOCUMENTARY FILMMAKER: You know, it's pretty simple. I mean, they -- they lure them in and let the power of money do the rest. And, you know, it's no longer a case where, you know, it's the poor and impoverished kids. I mean, we're seeing very affluent families lose their children to these -- to these gangs, and it's happening all across the country.

COOPER: And the value, I guess, of recruiting Americans is that they can operate more easily in this country?

FLEMING: That's exactly right. I mean, they don't want their operatives to be distinguished amongst other people. They want them to blend in with society.

And they use these American kids because they know the language. They can get through the Border Patrol checkpoints. They know the routes. They can deliver the narcotics. They can then act as the cartel bankers and bring the cash back. And it's -- they look like any other teenager going up and down the road. They're indistinguishable from other people.

COOPER: Drug-related homicides in Mexico have doubled over the last two years. Why is the violence there increasing?

FLEMING: Well, some people would say that's because of the pressure that the government is putting on the cartels and that this is their acting out in that way. And there is some truth to that.

COOPER: That's what the Mexican government -- that's what the Mexican government says. I was down there. I talked to the attorney general for "60 Minutes" the other -- a couple of weeks ago, and they say, look, they don't want to say this is a sign of success, but this is a sign that these cartels are under pressure.

FLEMING: Well, and that's part of it, Anderson, but that's not all of it. Part of it is the fact that they are literally warring over these ports of entry that butt up against the United States.

Juarez is a perfect example of that. I mean, you're talking about a legitimate port of entry that receives, probably, 20 percent to 30 percent of the narcotics coming into this country. That's an extremely valuable port to the cartels. And they're not going to give it up real easy.

So you're going to have a war. And that means -- you know, whether it means the police or the federal police or whoever they have to come up against, in order to win that territory, you know, you've got three major factions fighting over that piece of turf right now. COOPER: Do you think most Americans realize how widespread drug cartels have -- Mexican drug cartels have become inside the United States? I mean, the Justice Department says they're operating in 230 American cities. They say they're the biggest organized crime threat in America.

FLEMING: And you know what, Anderson? It ought to send a chill down anybody's spine to know that. just three weeks ago. they arrested 700-plus members of the Sinaloa cartel. Just in November, they arrested 500 members of the Gulf cartel. That's 1,200 narcoterrorists operating in America getting their orders from Mexico. That ought to tell us something, that these groups have proliferated through the United States.

For three years I've been screaming to anybody that would listen to me that they are proliferated into the United States far more than what people believe. And the evidence is now coming to the surface.

COOPER: Rusty Fleming, it's fascinating. We're going to talk with you more in the coming weeks. Appreciate it, Rusty. Thank you.

FLEMING: Thanks, Anderson.

COOPER: Coming up next, a chilling encounter between man and nature, a fisherman's deep sea struggle with a 12-foot tiger shark, all of it caught on tape. We'll tell you how this ends, next.

And Chris Brown and Rihanna, he's accused of beating her. We don't know how this is going to end. Today Oprah dedicated her show to domestic violence. We'll bring you some of the shocking statistics and talk with Roland Martin and Lisa Bloom about the epidemic of violence in America.


COOPER: Some incredible video to show you tonight of a diver battling a killer shark. Watch.

Craig Clasen, a spear fisherman, says the 12-foot tiger shark began circling him and his friends who were filming off New Orleans in the Gulf of Mexico.

Clasen told "Outside" magazine he feared they would all be attacked, so in self-defense, he says, he fired a spear gun into the thousand-pound shark and stabbed it in the neck. It happened last year. Clasen says he didn't want to kill the shark but had no choice.

Tiger sharks are hunters who eat almost everything in the sea and are among the most feared predators in the ocean.

Coming up, singer Chris Brown's alleged beating of his girlfriend Rihanna thrust the issue of domestic abuse into the national spotlight and onto Oprah's show today.



Breaking news in the Anna Nicole Smith case tonight. TMZ has learned that attorney Howard K. Stern is turning himself in tonight. The Los Angeles district attorney's office today charged Stern, who was also Anna Nicole Smith's former companion, with illegally getting prescription drugs for her. He denies the charges. Two doctors also charged in the felony indictment.

Anna Nicole Smith died in 2007, you may recall, from an accidental drug overdose.

Michelle Obama mingled with soldiers and their families at Ft. Bragg Army Base in North Carolina today. She urged Americans to embrace the military families and their communities. She also praised military values.


MICHELLE OBAMA, FIRST LADY: What's always powerful for me, is that what I notice is what when you meet a soldier, it's the pride that they have for the work that they do. I don't just see it here; I see it everywhere I go in the faces and the conduct of every military person that I meet.


KAYE: Turning now to an economic bright spot. More consumers are pulling out their wallets again. The Commerce Department said today retail sales in February fell less than forecasted and rose more in January than previously estimated.

In the troubled Darfur region of Sudan, armed men today kidnapped three western aid workers with Doctors Without Borders. The attack comes one week after an arrest warrant was issued against Sudan's president. He's accused of various war crimes.

And the Iraqi man who infamously threw his shoes at President George Bush last December was sentenced today to three years in prison for assaulting a visiting head of state. The defense argued that throwing the shoes was not an assault but an insult -- Anderson.

COOPER: Wow. All right, Randi.

Time now for our "Beat 360" winners, our daily challenge to viewers to come up with a caption better than the one that we can come up with for a photo that we put out on AC360.com every day.

So tonight's picture, first lady Michelle Obama greeting Secretary of State Hillary Clinton in the State Department on Wednesday.

Our staff winner tonight is Candy Crowley. Her caption: "That's so funny. I'm wearing Spanx, too."


COOPER: Our viewer winner is -- I don't know what -- yes.

KAYE: Spanx are the things, they have that very slimming...

COOPER: Yes, I know.

KAYE: You don't want to get into it, do you?

COOPER: I just didn't want to get into it.

KAYE: They trim you in just an instant. It's wonderful.

COOPER: So I'm told.

Our viewer winner is Corrine in California. Her caption: "The latest celebrity pair added to 'Dancing with the Stars'."


COOPER: Oooh. Corrine, your "Beat 360" T-shirt is on the way. Congratulations.

Up next, domestic abuse in the national spotlight. Chris Brown's alleged beating of his girlfriend Rihanna consuming the entire hour of Oprah's show. We'll tell you what she had to say about it today.

And at the top of the hour, they called him a financial mastermind, showered him with money. Now he's a convicted master crook, leaving behind thousands of victims, some of them now penniless. The latest on Bernie Madoff.


COOPER: Oprah Winfrey devoted her entire program today to domestic violence, focusing mainly on girls and young women who are victimized or threatened by abuse.

Oprah used singers Chris Brown and Rihanna as a sobering example. Brown, of course, accused of beating Rihanna just before the Grammy Awards. Since the alleged attack, the two have reunited and just this week recorded a duet together. Oprah says Rihanna and others like her are playing with fire.


OPRAH WINFREY, TALK SHOW HOST: If you go back with a man who hits you, it is because you don't think you're worthy of being with a man who won't. It really does boil down to how you feel about yourself, because if you were raised to really love yourself and think that you're a wonderful person, somebody hitting you is really offensive to you.


COOPER: According to one estimate, one in every four women will be a victim of domestic violence in her lifetime. Each year 1.3 million women are assaulted by an intimate partner. So why do so many go back to their alleged abusers? That's what Oprah talked about today. That's what we're going to talk about now with In Session anchor, attorney Lisa Bloom, and analyst Roland Martin.

Lisa, it's kind of surprising to hear some of the young women on "Oprah" today suggesting that perhaps Rihanna deserved it. Especially among young people, why would they put up with abuse like that or even kind of justify it?

LISA BLOOM, ANCHOR, IN SESSION: Well, certainly, no woman or man deserves any kind of abuse, much less the physical assault that's alleged here. And let's keep in mind: he's accused of punching her in the face over and over again and choking her to the point where she began to lose consciousness. These are very serious charges.

Many women, thought, choose to stay because they're threatened. The most dangerous time for a battered woman is the point where she decides to leave. For many cases, that's when a homicide occurs. So we can't criticize all women who choose to stay. Sometimes that's their best option.

In this case, it really is confounding, though, because this is a woman who doesn't have children with her batterer. She's not married to him. She's not economically dependent on him. And it really highlights that so many women stay when it really is an irrational choice.

COOPER: Roland, let's play what Chris Brown said on Tyra Banks' show back in 2007. He talked about witnessing his mom being physically abused. Let's listen.


CHRIS BROWN, R&B SINGER: I know some people that go through domestic violence and stuff like that. And I don't want to mention the person's name, but like somebody that hurt my mom, you know what I'm saying? And me having to deal with that from the age of, like, 7 all the way to, like, 13, me seeing that and being, like, visually abused by it. So...

TYRA BANKS, HOST, "THE TYRA BANKS SHOW": And how did it affect you?

BROWN: It affected me, you know what I'm saying, basically, especially towards women, I treat them differently, because I don't want to -- want to go through the same thing or put a woman through the same thing that that person put my mom through. You know what I'm saying? So...


COOPER: That's what he said back then. It's interesting, though. I hadn't realized, Roland, that young men who witness domestic violence are twice as likely to abuse their partners, according to the National Coalition Against Domestic Violence. ROLAND MARTIN, CNN ANALYST: Anderson, that is a huge problem and I think one of the fundamental problems that we are seeing right now with this national conversation on domestic violence, is that it is mostly coming from a perspective of why is Rihanna going back to Chris Brown?

That is a 50 percent of the problem. You cannot talk about domestic violence and not confront the anger that exists when it comes to these men. What's the problem in terms of why are you hitting? What caused you to do it? What are you seeing in your life that brings you to that point?

We have to confront what's going on with men. This cannot be only a female-dominated conversation. We've got to talk to these men and get them sharing and talking and opening up, because they're the ones who are walking around as these silent volcanoes. And all of a sudden they erupt, and then we say, "Why did he beat her?" Confront the anger that is -- that resides in so many of these men all across the country.

COOPER: Well, Lisa, the other question, though, Chris Brown, is why after allegedly doing this, is he then out on a Jet Ski checking out other women and, you know, clearly being photographed by paparazzi playing around on a Jet Ski?

BLOOM: Right.

COOPER: If he's so concerned about this, how come that's acceptable?

BLOOM: Yes. Flexing his muscle, which seems especially inappropriate. And I've talked to prosecutors who do domestic violence cases in the L.A. D.A.'s office, where this case resides. They said that would clearly be an exhibit at his sentencing, if he was ever convicted and sentenced. And that is really just thumbing his nose at the system and showing a real flagrant disregard.

And at the time he's doing that, by the way, Rihanna is in hiding, not showing her face. In fact she's still in hiding, hasn't done any public appearances in a month or so since this happened. Her entire career has been at a standstill. She's not modeling. She's not singing. She's canceled performances, and he's out there apparently living life as he always did.

MARTIN: It's not even a question of just him being on a Jet Ski. OK? OK, forget the Jet Ski. The fact is these two are back together. And I get him being out and she's not showing her face. There are so many other issues that are so more important, than just the fact that he was out on a Jet Ski.

What we're dealing with right now is the fact that we have two young people -- one person 19, one 20 -- who obviously have some significant issues that confront both of them.

But there are regular, every -- ordinary people -- Lisa, you talked about it -- who are turning back, doing the same thing. People who go through this, who beat somebody last night. You know what? They went to a beach today. They went to a restaurant today. They did the exact same thing.

People are not sitting there and saying, "Wait a minute. What am I doing? I am committing an act of violence against somebody else who I supposedly love." That's what we have to confront. I don't care about a Jet Ski; I care about his mind.

COOPER: We've got to leave it there. Roland Martin, Lisa Bloom, good discussion. Thank you.

At the top of the hour tonight, from his penthouse to a jail cell, Bernie Madoff pleading guilty, losing his freedom for the greatest fraud in U.S. history. The latest on his courtroom confession ahead.

But next, something to make you smile before you hit the sack: hilarious outtakes from "Sesame Street." Funny and not exactly kiddy fare, between Elmo and comedian Ricky Gervais. It's our "Shot," coming up.


COOPER: "Tonight's Shot," Elmo and comedian Ricky Gervais doing shtick on "Sesame Street." These are some of the outtakes. Take a look.


RICKY GERVAIS, COMEDIAN: These are the no-go areas: drugs, child abuse, the Holocaust. OK.

KEVIN CLASH, VOICE OF ELMO: We won't talk about those.

GERVAIS: Let's stay off those three things.

UNIDENTIFIED FEMALE: That's because that's your standup, right?

GERVAIS: Exactly, yes.

And, do you know what necrophilia is?

CLASH: Elmo wants this tape.

GERVAIS: So do I. (singing) Set your piggies free. Set your piggies free.

CLASH: (UNINTELLIGIBLE) (singing) Set your piggies free.

GERVAIS (singing): Set your piggies free.

CLASH: Come on, we're having fun.

GERVAIS: I'm having fun. This is fantastic. I love Elmo.

CLASH: So that's your payment. (END VIDEO CLIP)

COOPER: We got the video from theHuffingtonPost.com, Elmo and Ricky Gervais. Very funny stuff.

KAYE: That's a good performance there.

COOPER: Yes, they are. You can see all the most recent "Shots" at AC360.com.

Coming up at the top of the hour, Bernie Madoff's guilty free: what he faces in prison and how investigators get to the bottom of the mystery he leaves behind, if they'll be able to.

We'll be right back.