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Nancy Grace

Nancy Grace for June 22, 2005, CNNHN

Aired June 22, 2005 - 20:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

NANCY GRACE, HOST: Tonight, live to Aruba. Eighteen-year-old American girl Natalee Holloway missing from her high school trip to Aruba. The Alabama beauty`s disappearance still a mystery tonight. Four suspects behind bars, and Natalee`s mother convinced that others must be pursued.
And prosecutors say he is one of the most prolific pedophiles ever in U.S. history. Convicted child molester Dean Schwartzmiller back in court. Revealed tonight, massive personal binders he kept detailing 36,000 -- that`s right, 36,000 -- molestations. How did this guy slip through the cracks?

Good evening, everybody. I`m Nancy Grace. And I want to thank you for being with us tonight.

A convicted child molester has a date with Lady Justice today. Literally thousands of victims alleged. Tonight, found in his bedroom, handwritten notes about a staggering number of victims, 36,000 child molestations.

But first, we go live to Aruba and the search for 18-year-old Alabama beauty Natalee Holloway. The search intensifies. A Texas team of specialists heads to Aruba to find the missing girl.

Tonight, in Aruba, Natalee`s father is with us, Dave Holloway; in San Francisco, defense attorney Daniel Horowitz; in New York, defense lawyer Michael Malfeda (ph); also with us, psychotherapist Lauren Howard.

But first, let`s go to Aruba and CNN correspondent Karl Penhaul. Karl, bring us up-to-date.

KARL PENHAUL, CNN CORRESPONDENT: Nancy, as far as developments on the ground in terms of the investigation, nothing that we know publicly has transpired today. So little to tell you there about, about new developments on the case itself.

But you know, I did talk this evening to Anita Van Der Sloot. She`s the mother of the younger suspect, Joran Van Der Sloot. Had a brief conversation with her on the telephone. That was the first time that I`ve had a conversation with her since we talked to her about two weeks ago just after Joran`s arrest.

And what she said to me, over these last few days, she said that her and her family, her husband, have been living what she termed a "crazy nightmare." She called on us not to demonize her son, but to let justice work its wheels and to find the evidence, to gather the evidence. And she also said that she was worried about Joran but that he, in jail, was praying, was praying to try and get through this. And she also indicated she was doing the same thing, Nancy.

GRACE: Well, Karl, if she doesn`t want suspicion to be on her son, could she explain to you what his story is when he last saw Natalee, and why the stories of the three guys that escorted Natalee from the bar that night, why their stories seemingly are starting to conflict with each other?

PENHAUL: We didn`t go into the specifics, not in a phone conversation. There is a chance that we may do that sometime later in person. But what she did say is she still insists her son is innocent and she does say that there are many other -- could be many other people involved in this picture, in this case, and so asked us to let justice do its work and to see really what comes out of this, Nancy?

GRACE: Karl Penhaul, what other people? Who is she talking about?

PENHAUL: Well, of course, we know of three other suspects who have been formerly arrested in this case. And they face the same accusations as Joran Van Der Sloot himself. And we do know, as well, that the police are working through a list of suspects.

We do know, of course, that they`ve talked to Joran Van Der Sloot`s father, the judge, Paul Van Der Sloot. But we do understand, as well, that there may be other witnesses on the list, because talking to prosecutors, in fact, the chief prosecutor yesterday, she was giving nothing away, but she did seem very confident that they were making some kind of progress.

And talking also to Natalee`s family, they also seem to believe, through their daily briefings with law enforcement officials, that some kind of progress is being made, Nancy.

GRACE: I want to go now to Natalee`s father, Dave Holloway, kind enough to join us. The whole family there in Aruba searching for their girl, Natalee Holloway.

Sir, thank you for being with us. We are showing continuous shots of your daughter in the hopes that someone will see this and someone will recall a fact they`ve forgotten and go to police. Dave Holloway, are you happy with the job the Aruban police are doing?

DAVE HOLLOWAY, FATHER OF NATALEE HOLLOWAY: I have met with the FBI and the local spokesperson. In fact, met with them this morning. And as I understand, the investigation is moving forward and moving forward very quickly.

A number of people are currently being interviewed as witnesses. And as the case continues to move forward, I continue to remain optimistic that all the pieces of the puzzle will be put together and put together pretty quickly.

GRACE: Mr. Holloway, you have been there in Aruba for some time now. What are you personally doing to find your girl?

HOLLOWAY: I`ve been here basically doing ground and search efforts since day one. The last couple of days, we have been targeting areas where the experts could possibly look, that the average person may not have access to or have the capability to search those areas.

GRACE: Mr. Holloway, I want to hear from you how all these conflicting releases, conflicting information, contradictory reports, rumors, how has that been affecting you and your family?

HOLLOWAY: Well, it`s one big rollercoaster ride, but without the faith of God, and all of our friends and family, and all of the millions of people who have sent in prayer requests and cards, I couldn`t make it by myself. And I`m just thankful for all that support.

GRACE: Well, Mr. Holloway, I know we`re far away from you, but you`ve got to know you`re not alone. So many people thinking of you, praying for you, praying for Natalee, vigils on her behalf. Take a listen to this.

(BEGIN VIDEO CLIP)

BETH HOLLOWAY TWITTY, NATALEE HOLLOWAY`S MOTHER: The only thing -- I think there are some other individuals though, that, you know, need to be pursued. And I know the local authorities are doing that and will be doing that. From my point of view, as Natalee`s mother, and my intuition all along, I definitely feel there are some more individuals involved.

It`s just overwhelming. And, you know, when we spoke three weeks ago, I know you and I never imagined that we would be still be here and that we would still be searching for Natalee and...

(END VIDEO CLIP)

GRACE: Mr. Holloway, who is Natalee`s mom referring to when she says other people need to be pursued?

HOLLOWAY: That`s probably the father of the -- I can`t think of the name -- the judge -- it maybe the judge himself.

GRACE: Van Der Sloot.

HOLLOWAY: I`m just speculating, but there`s answers he needs to give us. In fact, the three suspects need to tell us the truth and this thing would be over with. That`s all they got to do, just tell the truth.

GRACE: Mr. Holloway, do you -- we hear reports that their stories are contradictory. And they can`t all three be -- somebody is lying. If there are three different stories, one of them has got to be lying. Do you believe that one of these three suspects is lying to police?

HOLLOWAY: I would think all of them were. But, you know, they all had the same story to begin with. And then now they`re changing the stories and pointing fingers at each other. So what does that tell you? Any commonsense person would understand that.

GRACE: I agree with you 200 percent, Mr. Holloway. Mr. Holloway, you have said that you believe there will be a resolution to the case soon. Why do you believe that?

HOLLOWAY: Well, there`s not too many crimes that are perfect, in other words, there`s no perfect crime. And as long as the police are making progress and putting together pieces of the puzzle, and we`re eliminating possibilities in our search efforts, you know, it`s eventually going to be resolved. I just have faith that it will be.

GRACE: Mr. Holloway, do you think the three young men in custody tonight -- well, now there are four -- do you believe that they know where Natalee is?

HOLLOWAY: I believe they do.

GRACE: Why? Why do you think that?

HOLLOWAY: Well, why would you put together a story to begin with and then, after getting questioned by it, start telling lies or other stories, you know? So why would you come up with the same story to begin with?

GRACE: Absolutely.

HOLLOWAY: And then...

(CROSSTALK)

GRACE: Why would your story change? Why would your story start to fall apart? I mean, there really is only one truth. So why would the story change? And also, the finger-pointing.

You know, one thing I wanted to ask you is how you spend your day, what is your day like, Mr. Holloway?

HOLLOWAY: Well, the first ten days it was all-out searching, searching the most obvious areas. And then the last week to ten days, it was like, where do we search next? And the last two days we went up in a helicopter and flew over some certain areas of inland and identified some possibilities of where the experts can search.

We`ve basically completed the search of all of the perimeter parts of the island. Now we`re looking at the interior and any hideouts.

GRACE: Mr. Holloway, I was thinking about you this Sunday. I was on the phone with my own father for Father`s Day. And I know your heart must have been breaking on Sunday.

HOLLOWAY: It was.

GRACE: With us...

HOLLOWAY: My daughter...

GRACE: Go ahead, sir.

HOLLOWAY: I spoke with my son, and then my daughter called me, my 7- year-old daughter called me, Brooke. And she -- bless her heart -- she came up with a little story, and she sang a little song to me over the telephone. And that`s one day I didn`t -- I wasn`t able to search. It just brought me to my knees.

GRACE: Mr. Holloway, so many people thinking about you. So many prayers and positive thoughts going out for you and Natalee.

Everyone, with us tonight, a special guest from Aruba, Natalee`s father, Dave Holloway. He and her mother are vowing not to leave the island without their girl. Please, stay with us.

(BEGIN VIDEO CLIP)

TWITTY: I do know this, that the individuals that are in custody can certainly answer the questions that we`re all waiting -- we are all waiting for those answers. And there may be some other individuals who could help, who could help so we could end this.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANITA VAN DER SLOOT, MOTHER OF SUSPECT IN ARUBA CASE: I just want to let everybody know that he`s a 17-year-old teenager and this could have happened to any other 17-year-old teenager. And we`re parents that know our kids. We try to educate them well. We try to care for them, warn them. And it`s devastating that these things happen.

(END VIDEO CLIP)

GRACE: That is the mother of Joran Van Der Sloot, the young judge -- the young son of a judge there in Aruba last seen with Natalee Holloway. He is in custody tonight.

In fact, Karl Penhaul, it`s my understanding three have been moved from a local facility to a maximum security facility.

PENHAUL: Not really a maximum security facility, Nancy. But under the legal system here, after a certain period of detention, a police jail, in a police cell, they will then be moved to the island`s prison, the correctional institute of Aruba, it`s called, the KIA, which is down on the east end of the island.

That is separated, though. It`s separated, as far as I understand, into sections for convicted criminals and then another section for suspects who are still in custody but before their trial. So they are separated from hardened criminals. But this is part of the legal procedure here on the island, Nancy.

GRACE: Karl, listen to this.

(BEGIN VIDEO CLIP)

TIM MILLER, DIRECTOR, TEXAS, EQUUSEARCH: We`re taking side-scan sonar equipment over there that we`re mounting on a boat and we`re doing a lot of things out in the water. We`re going to have our own divers on that boat.

I mean, that thing can scan 800 feet deep in the water. It can focus in on any objects that it sees. We will know, you know -- if there is something under there, we certainly can find it with this piece of equipment.

(END VIDEO CLIP)

GRACE: With us is Natalee Holloway`s father, Dave Holloway. Mr. Holloway, the fact that this team of specialists from Texas is coming down must give you some hope.

HOLLOWAY: It does. As, again, I said earlier, we`re trying to identify some areas where they can search, where they`ll be most productive. We, as I had indicated earlier, have covered areas where, you know, the general public can cover. So we`re going to let them do their job.

GRACE: Mr. Holloway, something that I keep thinking about is, you know, when the first two guys were arrested, the two security guards that had obviously nothing to do with Natalee`s disappearance, now they`ve got this deejay, this 26-year-old deejay that works on a party boat of some type. How do you think he fits in, Mr. Holloway?

HOLLOWAY: You know, that`s what has got me stumped. I really don`t see the connection. Maybe there is. The police are not, again, divulging any details about the investigation or what this individual has said. So I don`t know anything about him.

GRACE: Yep. You know, you guys have a regular briefing every day with police, correct?

HOLLOWAY: We do have an everyday briefing. But it`s just basically on the process, such as -- in fact, today, they told us that they are convincing the evidence that they have now in preparation for the judge to review Friday to determine whether the individuals will be detained for an additional 60 days.

They felt like the process was a little too lengthy the last time. And they`re going put it all together in a little more condensed form where the judge can review it and make a swift decision.

GRACE: There is a $55,000 reward offered for Natalee`s safe return, everyone. We are showing you her picture.

Back to this deejay, this 26-year-old deejay. I`m wondering, Karl Penhaul, we found out later that these Kalpoe brothers that are behind bars right now regarding Natalee`s disappearance said they were sorry to the security guards, you know, for naming them. That`s how those two landed behind bars.

I`m just wondering, did they pick this guy`s name out of a hat, this Steve Croes person?

PENHAUL: I don`t think so, Nancy, not from what law enforcement sources close to this investigation have told us. They`ve told us that, initially, Steve Croes was interviewed as a witness. And what he told law enforcement sources was that he saw the three other suspects drop off Natalee at the Holiday Inn.

Now, as their stories fell apart, as cracks appeared in what they were telling police and investigators during interrogation, of course, then the police realized that Steve Croes must also have been spinning a lie. And so, at that point, he switches from being a witness to a suspect. They go and haul him in, and that`s why he`s under arrest now, Nancy.

GRACE: OK, Karl, when you put it like that, it makes perfect sense. Karl, can you explain some of the inconsistencies in this suspect`s statements?

PENHAUL: Not really, to be quite honest. Because the way that the investigation is structured, because of the legal restraints here, we`re not being told.

But what we do know is, of course, a little beyond what we knew initially, which was the boys, all three, said that they had dropped Natalee off at the Holiday Inn. They said that they drove around by the lighthouse. Some of them say they stopped there, others say that they didn`t, but that the end point was the Holiday Inn.

And then, as the stories fell apart, we understand, from law enforcement sources, that Joran backed away from that story and said that he was never at the Holiday Inn. He got out of the car before.

We also understand that the Kalpoe brothers are telling other versions of events, that they dropped Joran and Natalee off somewhere else. You`ll remember a few days ago, the search was sparked near the Marriott Hotel. That was because the Kalpoe brothers had told investigators that they had dropped Joran and Natalee off close to that point.

Those are some of the inconsistencies we know of. But others are being kept under wraps for...

(CROSSTALK)

GRACE: Well, Karl Penhaul, those are very serious inconsistencies.

To Dave Holloway, Natalee`s father, who was kind enough to join us tonight from Aruba, can you tell us about Natalee herself, her nature, what she liked, what her hobbies were?

HOLLOWAY: Natalee was a very determined person who, you know, just loved life. And she always liked to make a lot of friends. And she`s from the South. And a lot of people from the South are very friendly. They want to make friends, and very hospitable, and trusting, to some extent. And that may have been part of the process, was that she may have trusted these guys a little bit more so than maybe someone from somewhere else.

But that`s the nature of our culture. And she, like I said, was very determined, always made good grades, and everything that she did, it had to be almost to perfection. And I can recall, just during her graduation -- we had limited seating at her graduation ceremonies. And we were two tickets short, and I put her to the challenge of, you know, hey, why don`t you call 300 other students if you have to. We need two more tickets to go to the event so that the whole family can go.

And she called me the Monday before the graduation and said, "Hey, Dad." She called with a hoarse throat. "I got the two tickets." And I got the indication she called several hundred people to come up with those two tickets.

And then, here I am, trying to find her. And people ask me, "Well, you know, how come you hadn`t given up?" And I said, "Well, you know, my daughter didn`t give up on me, and I don`t want to give up on her."

GRACE: With us, Natalee`s father, Dave Holloway, there in Aruba.

Quick break. And very quickly to "Trial Tracking." An FBI report says bride-to-be Jennifer Wilbanks ran away because she was afraid she wouldn`t be a perfect wife. Four days before a wedding that included 600 guests, limos, the works, Wilbanks took off.

(BEGIN VIDEO CLIP)

JENNIFER WILBANKS, RUNAWAY BRIDE: I had a bottle of pills or I had the bus ticket. And I decided not to play God that day and decide when it was time for me to go.

(END VIDEO CLIP)

GRACE: FBI says Wilbanks` flighty behavior is part of a pattern. She broke off another engagement in 2003, but she`s made the perfect book deal, half a mill. That`s right, $500,000 for her story. Lady Justice takes a kick in the pants.

(COMMERCIAL BREAK)

GRACE: Natalee Holloway has a full scholarship just waiting on her at University of Alabama. She wants to enter as pre-med. She is missing tonight.

And with us from Aruba, her father, Dave Holloway. Mr. Holloway, if you could speak out to Natalee or to the people that know where Natalee is tonight, what would you say?

HOLLOWAY: For the people who know where she is, I would just say, you know, come clean. You know, we`ve had enough. And it`s time for everyone to, you know, tell the truth. And if anyone out there that has any answers that feel like they want to come forward and tell us or give us any information, please do so now.

GRACE: Mr. Holloway, thank you. And our prayers are with you, sir.

HOLLOWAY: Thank you.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BETH HOLLOWAY TWITTY, MISSING GIRL`S MOTHER: What when I walked away with was confirmation that -- some confirmation that I needed. And I`ve had some strong feelings since those early morning hours of May 31 between the hours of 1:00 and 4:00 AM. And I just feel there are still some other individuals that need to be pursued.

(END VIDEO CLIP)

GRACE: Welcome back. We are live in Aruba, still in the midst of the search for 18-year-old American Natalee Holloway. Joining us right now, Mariaine Croes. She`s a spokesperson for the Aruba prosecutor`s office. Ms. Croes, thank you for being with us. Has questioning of the Kalpoe brothers and Van Der Sloot ended?

MARIAINE CROES, SPOKESWOMAN FOR ARUBA PROSECUTOR: No, it has not. At this point, what has happened is that they have been transferred to the Kia (ph). It`s our prison here on the island. But if they are needed for interrogation, they will be again brought to the police station where the interrogations take place.

GRACE: Is the interrogation of the deejay on the party boat, Steve Croes -- is that ongoing?

CROES: Yes, that is also still ongoing because he is in his first part of detention, so we really do need to interrogate him to see what he knows.

GRACE: Mariaine Croes, do you anticipate more arrests in this case? Both Natalee`s mother and father say there are other people that need to be pursued.

CROES: If I have to be very honest, that`s something that we cannot exclude at this point. But also, it would be very unwise of us to, at this point, tell the international media, the national media and other people involved if there are arrests going to be made in the future beforehand.

GRACE: Mariaine, why was Paul Van Der Sloot, the judge -- why was he questioned by police?

CROES: Everybody who may know something about this disappearance of Ms. Holloway will be questioned as a witness, at this point, so that as soon as possible, we can get the story straight and know what happened.

GRACE: And Ms. Croes, why wasn`t the deejay, Steve Croes`s, car confiscated? Why did it sit in his driveway for so long? And why hasn`t the party boat been searched?

CROES: What I can say is not because something wasn`t confiscated, that does not mean that it wasn`t searched. Both the car and the party boat have been searched. At this point, I cannot go into the details of the results of those search, but I can guarantee everybody that they were searched.

GRACE: Ms. Croes, I`m not doubting you, but I find it very difficult to believe that a forensic search looking for fiber, hair, blood, semen, fingerprints, was conducted in this driveway.

CROES: It -- I cannot say exactly what was being searched for. I can guarantee, though, that the search has taken place. It has happened.

GRACE: OK, thank you very much for being with us. That is the spokesperson for the Aruban prosecutors, Mariaine Croes.

Let`s switch gears. Hold onto your seats. A convicted child molester manages to slip through the cracks -- that`s putting it euphemistically -- and has now been found in his bedroom with binders containing intimate details of 36,000 child molestations. And there is apparently no reason to believe that they are fabricated.

In Mountain View, California, "San Jose Mercury News" reporter Chuck Carroll is with us. Welcome, Chuck. I understand that Mr. Schwartzmiller was in court today. What happened?

CHUCK CARROLL, "SAN JOSE MERCURY NEWS": Well, it was a very preliminary hearing, and he just waived the time. In other words, he has decided he`s not going to insist that he get a 60-day preliminary hearing, where they`ll decide whether there`s enough evidence against him to go trial. His lawyers need a lot more time to go through the growing amount of evidence against him. And so he just said, I`ll be back in court July 26.

GRACE: Daniel Horowitz, were you there in court today?

DANIEL HOROWITZ, DEFENSE ATTORNEY: Nancy, I was there.

GRACE: Is it true that this guy wouldn`t even show his face in court, that he stood outside the courtroom and yelled, I waive my appearance for 60 days? Please tell me if that`s true.

HOROWITZ: It was like that, Nancy. I mean, you have to understand, the press is there. You can`t even see the judge from the audience because there`s cameras waiting to take the picture of this monster. He comes out only a little bit out of the little room where he`s housed, in his jail clothes. His attorney stands between him and the cameras, and barely, you can get one little piece of his face. And the judge says something to him, and he just mumbles a little answer and then scurries right back in. It was almost as if he wasn`t there.

GRACE: You know, I`ve never heard of a judge allowing someone to yell an announcement from outside the courtroom because they don`t want their face to be seen. Chuck Carroll, what exactly led police to Schwartzmiller and his roommate, Freddie Everts? Isn`t Everts also a convicted child molester?

CARROLL: Yes, he is a convicted child molester. What happened was kind of luck, I think, on the part of the San Jose police. I think Mr. Everts was in some sort of an accident that involved a hit and run. And they got a tip that, you know, he was around, and they began to come -- and they arrested Mr. Everts, Everts, however you pronounce it. And he -- from that point, Mr. Schwartzmiller, who was his roommate, housemate, decided things were getting a little hot because they were -- because Everts had a warrant against him, and so he thought things were going to get hot against him.

And then a short time later -- I`m not quite sure how many days later -- Mr. Schwartzmiller asked some people that he knew, some kids that he knew, to destroy some things that he didn`t want around if the police came around, I guess. And they didn`t completely destroy it, and somehow, the parents of one of the victims came across the stuff and they went to the police and...

(CROSSTALK)

GRACE: Does that stuff including the binders detailing 36,000 child molestations?

CARROLL: Well, we don`t know that it`s 36,000. I mean, it would take one person one molestation a day for 98 years for that number to work out or exactly so. Some of these are repeats and some may be complete fantasies, but police are saying...

GRACE: What do you mean, repeats?

CARROLL: ... it`s going to be hundreds.

GRACE: What`s a repeat?

CARROLL: People who were repeatedly molested. There could be 36,000 victims. There may be thousands of victims, hundreds of victims. But this guy is still one of the worst ones that San Jose police say they have ever heard of.

GRACE: To California attorney, joining us here in New York, Michael Malfetta, a veteran trial lawyer. You know, Michael, we`re showing the viewers right now these notebooks that were kept in giant binders by this guy. And there were 36,000 entries. Now, that may be not 36,000 separate victims, but 36,000 molestations. Michael Malfetta, I know you`re on the other side of the fence from me, but really, how was this guy walking amongst us and our children?

MICHAEL MALFETTA, DEFENSE ATTORNEY: You know, Nancy, I don`t really know the ramifications or how it came to pass, but you can`t sit back and say, How is he walking amongst us? I don`t know what his history was, what he was convicted of, what his sentences were or...

GRACE: Oh, really? Well, I got his rap sheet. I`ll be happy to give you a copy of it in the commercial break. It starts off in 1970, Lauren Howard, in Alaska, convicted of lewd lascivious conduct with boys, indicted for molesting a teenage boy, ran before trial. Idaho, extradited. Alaska dropped its charges. He`s convicted, gets eight years. They let him out on two. And he`s on to the next state. He`s even gone internationally. He`s gone to other countries and molested children!

LAUREN HOWARD, PSYCHOTHERAPIST: Yes, and got away with it. I mean, You need a very strong ego and a real kind of sort of flip-the-bird attitude towards the system. This is somebody, like most horrendous criminals who do heinous acts, who has his own sort of ethos and his own kind of -- the notebooks are a symbol of it. It`s all part of his ritual. Every one of those entries is part of the turn-on. It`s part of his thing. Getting over (ph) is part of his thing.

And he did it really well. He was charming and engaging and evidently extremely bright and learned the system and learned how to buck it.

GRACE: The notebooks themselves, that`s state`s exhibit number one.

HOWARD: It`s -- yes. I mean...

GRACE: Why would you keep notes of all the times you molested children?

HOWARD: Because it`s part of the -- part of the turn-on is, you know, facing the danger. Yes, well...

GRACE: It`s like keeping a diary after a night of partying...

HOWARD: Absolutely. They`re notches...

GRACE: ... of what all you did.

HOWARD: ... in the bedpost.

GRACE: Sick. Sick! And Elizabeth, during the commercial break, could you please give Mr. Malfetta this guy`s rap sheet, so we can have a little discussion of all the times he has eluded police?

Very quickly, to tonight`s "All Points Bulletin." FBI and law enforcement across the country on the lookout for this man, Edward Harper. Harper, wanted for the 1994 molestation of a Mississippi child. Harper is 59, 5-10, 165 pounds, gray-brown hair and hazel eyes. If you have any information on Edward Harper, please call the FBI, 601-948-5000.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He was out in the front yard talking to my kids and bought them ice cream from the ice cream man. And when they came home and told me that the man who lived there by himself with another man bought them ice cream, I just said immediately said, No, there`s just something not right here. You need to stay away.

(END VIDEO CLIP)

GRACE: If only other parents had said the same thing. Dean Arthur Schwartzmiller, a convicted pedophile -- now binders have been found in his bedroom indicating 36,000 separate child molestations. Welcome back, everybody. I`m Nancy Grace. Thank you for being with us.

To Daniel Horowitz there in California, what was this guy`s MO in luring children?

HOROWITZ: Nancy, unfortunately, it`s the standard MO that just seems to work. The mother who you just put on the air is the right kind of mother who says, A grown man should not be playing with children. At this house, there were kids constantly playing video games, doing the kind of things almost you`ll point out like in Neverland. Michael Jackson had a big version. This was the poor man`s version. Bottom line is, parents, adults play with adults, they don`t play with kids on a regular basis. That`s a no-no. That`s a big warning sign. Call the police.

GRACE: And now back to California attorney Michael Malfetta. Did you get a chance to look at that document, Michael, the rap sheet?

MALFETTA: Are you going interrupt me again, or I can respond to that? Adding on to what Daniel said, more importantly, what these guys normally do is they will come to children and say, Hey, I need help finding my dog, I need help doing something. And the number one message you can send to your children -- not only as a lawyer but as a father, I say this -- adults don`t need help from children. They never do. So if an adult comes to you and said he needs help doing something, run away. And do it quickly and do it loudly. Adults don`t need help from kids.

Yes, I`ve looked at his rap sheet, Nancy, and this guy`s a monster. Don`t get me wrong. Like I just said, I have two sons and I have a daughter. But it seems to me that the person that dropped the ball here or the people that dropped the ball here are your cherubs of justice, law enforcement, the prosecutors and the cops. In California -- Daniel can tell you this -- it is very, very difficult to be a convicted child molester and to exist in California. You have to register when you move. You have to register within a certain amount of time. It`s not an easy thing. And I`m not saying I think it`s a bad thing, it`s a good thing. They keep track of you.

But it seems to me that this guy is a monster, and this guy fell through the cracks. And the scrutiny needs to go towards police officers and needs to go towards prosecutors because this guy should not be in anybody`s neighborhood. He should not be free.

GRACE: You know, Lauren, now it all makes sense to me. It`s not Schwartzmiller`s fault at all. It`s like Michael Malfetta just explained. It`s the police`s fault.

HOWARD: Absolutely!

GRACE: Now, why didn`t I get that to start with? I have reviewed the rap sheet. That was my question to Mr. Malfetta -- 1997, convicted of lewd conduct with boys in Alaska, indicted for another charge. Flees to Brazil. In `96, convicted for molestation of two underage boys in Idaho. Released on parole just two years later. Warrant pending in Oregon. Convicted of luring a young boy under 16 to become a prostitute in San Francisco. Guess what? Conviction overturned. Pleads no contest to sodomizing a 15-year- old boy in `93. Charged with molesting a 12-year-old boy in 2005. Runs to Everett (ph), Washington. Another charge was dropped after a plea deal. Another case was reversed. And there are currently new charges pending for molestation of a young boy under 14.

He was not registered. Does notification, the mandatory notification, work?

HOWARD: No because what mandatory notification is asking is for criminals to be accountable. You`re being sort of a Pollyanna. You`re saying did 12 years, he`s rehabilitated, or just...

GRACE: No, I didn`t say that!

HOWARD: No, but...

GRACE: I didn`t...

(CROSSTALK)

HOWARD: That`s what the ruling is saying...

GRACE: Yes.

HOWARD: ... is that he`s rehabilitated, and therefore, we are telling him one of the stipulations is mandatory notification, and then we are expecting that he will follow those rules. And we`re not checking!

GRACE: I`m expecting him to run to Brazil!

HOWARD: We`re not checking it out!

GRACE: No, we`re not.

HOWARD: We`re not staying on top of it. So we`re relying on him. We`re saying, OK, we`ve told you, you have to -- it is mandatory that you notify us, and we`re counting on you to do the right thing.

GRACE: Daniel Horowitz, take a listen to this.

(BEGIN VIDEO CLIP)

SCOTT CORNFIELD, LIEUTENANT, SAN JOSE POLICE: What was most disturbing, though, was not the child pornography images that we found but these binders. We located seven of these. And what is most significant and certainly most disturbing and the reason that we`ve asked you all here today is because these binders contain thousands, literally thousands, of names of children that we believe Mr. Schwartzmiller may have molested.

(END VIDEO CLIP)

GRACE: Chuck Carroll, have you determined why this guy was not registered as a sex offender?

CARROLL: Well, I don`t believe -- I believe that most of the crimes that he was committed for were, you know, done out of state and before Megan`s law became -- were passed in something like 46 states.

GRACE: Now, that might be a loophole, but I see his convictions heading into `93, 2005. Daniel Horowitz, want to take a crack at it. Why was this guy not registered?

HOROWITZ: Nancy, I can`t really explain that. One thing I can say is I think our society is changing. I don`t believe we took child molest as seriously as we should have. It`s child rape. It`s not molest. That`s too soft a word. I think with shows likes yours and with all of the publicity, we`re now taking a much harder line against these people and basically saying, One strike. You register, and if you don`t register, we know that you`re already slipping, and two strikes and you`re out. But I think we`re looking historically back at a time we let these guys slide a little bit, and now we`re not doing it as much anymore.

GRACE: And you brought up something interesting. Everybody on the panel tonight is familiar with this type of crime, either as lawyers, a reporter, therapist, it is rape. People don`t like to say child rape. But you know what, Daniel? You`re right. That`s what it is. That`s the name of it. There`s no way to put it euphemistically.

Quick break, everyone. After becoming the victim of a violent crime myself and prosecuting violent felonies. I have an objection about how Lady Justice is tricked and treated in our justice system. Part of the proceeds of "Objection" go to the National Center for Missing and Exploited Children.

Local news coming up for some of you, but we`ll all be right back. And remember live coverage of the sentencing for Edgar Ray Killen, convicted in the "Mississippi Burning" Civil Rights trial, 3:00 to 5::00 Eastern on Court TV`s "Closing Arguments."

Please stay with us as we take time to remember Specialist Michael Ray Hayes, just 29, an American hero.

(COMMERCIAL BREAK)

GRACE: We at NANCY GRACE want desperately to help solve unsolved homicides, find missing people. Take a look at Erica Smith, just 14 years old, went missing July 2002 from Sterling (ph), Virginia. Eleven days after she disappeared, hikers found her body in a shallow grave. Police still don`t have the answers. If you have information on Erica Smith, please call the Carole Sund Carrington Foundation toll-free, 888-813-8389. Please help us.

Welcome back, everybody. Possibly the most prolific child molester in U.S. history behind bars tonight. Michael Malfetta, when do you reasonably expect this to go to trial?

MALFETTA: I wouldn`t expect this to go to trial much before the end of next year, Nancy. I mean, with these -- this number of people, this number of alleged victims, whether you`re a prosecutor, whether you`re a defense attorney, you`ve got to look into it. You`ve got to chase down the leads. And it`s going to be a long time before this goes to trial.

GRACE: And Daniel Horowitz, do you think a jury will ever hear about Schwartzmiller`s record?

HOROWITZ: Nancy, I think they will, just like Michael Jackson`s record, which was much more benign than this guy`s record, which is really horrific. They`ll hear about it. And let me add this. Right now, just the seven charges he`s facing will put him in jail for the rest of his life. But the police and prosecutors do want people to come forward if they`ve been molested and not to be afraid.

GRACE: That`s a good point. Chuck Carroll, very quickly, what are investigators doing now to help find other victims?

CARROLL: Well, I think they really wanted the kind of publicity that they`re getting now, and you know, they don`t always do that. But they thought almost from the beginning that there would be lots and lots of...

GRACE: Right. So they have...

CARROLL: ... people, so they came out and said...

GRACE: ... this tip line, right?

CARROLL: Pardon me?

GRACE: There`s a tip line, right?

CARROLL: Yes, there is a tip line. I`m afraid I don`t know what the name of it is.

GRACE: I have it right there, 408-277-4102. Any and all victims that are seeing this tonight, please respond. And to Lauren Howard. What did the notebooks mean?

HOWARD: Well, I mentioned to you before, that`s part of his ritual, the documentation of these acts. It`s not just in the bedpost, it`s -- you know, it`s sort of -- it`s his -- they`re his trophy -- the entries are his trophies.

GRACE: And you know what? They may be his trophies, but now they`re state`s exhibit number 1 through 36,000.

I want to thank all of my guests tonight, all of them. But my biggest thank you is to you for being with us and inviting all of us into your home. Coming up, headlines from all around the world and Larry on CNN. I`m Nancy Grace, signing off for tonight. Hope to see you right here tomorrow night 8:00 o`clock sharp Eastern. And until then, good night, friend.

END