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Paula Zahn Now

Cashing in on Catastrophe; Gang of Thieves; Report Card Murder

Aired December 27, 2005 - 20:00   ET

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


HEIDI COLLINS, CNN ANCHOR: And good evening, everybody. Thanks for joining us tonight.
In a season of giving, an explosive controversy over what has become of the money you gave to help victims of Hurricane Katrina.

(BEGIN VIDEOTAPE)

COLLINS (voice-over): Cashing in on catastrophe -- the outrage over some Red Cross workers hired to help hurricane victims. While helpless victims of Katrina suffered, what went on inside this emergency call center, and where is your money really going?

The "Eye Opener," a gang of thieves caught on tape. Forget everything you think you know about shoplifters. Just wait until you see this amazing video of brazen gangs stealing while you're shopping.

DETECTIVE DAVID HILL, MONTGOMERY COUNTY, MARYLAND, POLICE DEPARTMENT: We recovered $40,000 worth of merchandise.

DEBORAH FEYERICK, CNN CORRESPONDENT: In a single hour?

HILL: A single hour.

COLLINS: How do they get away with it?

And outside the law -- a father brutally murdered, his 15-year- old son, the alleged killer.

UNIDENTIFIED MALE: He's just a good kid who's scared and who came out of a bad situation at home.

COLLINS: Was this boy really driven to murder over a bad report card?

(END VIDEOTAPE)

COLLINS: Two thousand five has been a year of unprecedented natural disasters, from the aftermath of the Asian tsunami, to Hurricane Katrina just four months ago. And charities have done tremendous work to help millions of people.

The American Red Cross alone handed out more than $1 billion to Katrina's victims. But, with four days left in the giving year, the American Red Cross is facing a scandal. Dozens of people have been indicted, suspected of stealing hundreds of thousands of dollars collected in the name of helping victims of Katrina. Kareen Wynter has been looking into this and just filed this report.

(BEGIN VIDEOTAPE)

KAREEN WYNTER, CNN CORRESPONDENT (voice-over): Bakersfield, California, thousands of miles away from the area ravaged by Hurricane Katrina, and from a million-and-a-half people the storm displaced. But it's here, federal authorities say, 22 people contracted to work at this national Red Cross call center filed false claims worth more than $300,000.

And they didn't act alone. Family members and friends were also allegedly involved in this elaborate scam.

JACKIE SMITH, FAMILY OF DEFENDANTS: I'm really surprised that people in this day and time would try to take -- take advantage of the system that's intended to help those in need.

WYNTER: Jackie Smith's brother-in-law was named in the indictment, along with 48 other people, accused of wire fraud.

SMITH: If any of these charges are true, they do need to be fully investigated.

WYNTER: This Bakersfield claims center processed calls from Katrina victims across the country, as many as 16,000 a day.

(on camera): Red Cross workers say, due to the volume of calls, people were asked to provide only their name, address and birth date.

(voice-over): Call center agents would then have to confirm and approve those details before issuing a claim number, so the displaced could receive payment at local Western Unions, $360 for individuals and more than $1,500 for families.

JOHN CONKLIN, ASSISTANT U.S. ATTORNEY GENERAL: Unfortunately, the -- the fraud schemes are ever present. And, in this case, while we hoped nobody would be willing to take advantage of this situation, people have.

WYNTER: Officials say the contract workers tapped into the system by creating fake accounts and cashing in big. The Red Cross grew suspicious after an audit and contacted the FBI. Special Agent Javier Colon said he was surprised by the number of confessions.

JAVIER COLON, FBI SPECIAL AGENT: In many cases, they have openly admitted that they have never been to the state of Louisiana and that they weren't entitled to the money.

WYNTER: This store manager says an employee at his Western Union branch also grew suspicious when the same person came in three times to collect money.

UNIDENTIFIED MALE: She's the one who find out. She had that kind of feeling that she was here a long time. And she contacted the -- the authority.

WYNTER: The American Red Cross released a statement, saying -- quote -- "It does not tolerate fraud. We view donors as investors. And it goes on -- quote -- "Instances of fraud represent a small percentage of the overall contributions that have been made to the American Red Cross."

COLON: Our investigation is going to be expanded to include other parts of California and out of state, and there's thousands of claims that have been made in other states.

WYNTER: The Red Cross says it's devising new systems so that such fraud will be easier to detect in the future.

Kareen Wynter, CNN, Bakersfield, California.

(END VIDEOTAPE)

COLLINS: So let's find out where the case stands now tonight.

Joining me is McGregor Scott. He's the U.S. attorney in Sacramento.

Mr. Scott, who tipped you off that all of this was going on?

MCGREGOR SCOTT, U.S. ATTORNEY: The Red Cross first alerted law enforcement officials that this fraud was taking place.

COLLINS: We know that you have now indicted 49 people. But is it possible that this is just the tip of the iceberg? I mean, overall, what could we be talking about here?

SCOTT: Well, to date, as you have mentioned we have indicted 49 separate individuals. Our investigation, which is being spearheaded by the FBI and the Bakersfield Police Department, is very much still an active and on going investigation.

We anticipate, in the coming weeks and months, that we will indict a large number of people, perhaps even doubling the present number that we have.

COLLINS: Tell us a little bit about what the profile is of someone who might be involved in doing something like this.

SCOTT: Well, obviously, these are people who lack certain moral guidance in their lives, to think that they would undertake a fraud to essentially steal from the victims, the legitimate victims, of Hurricane Katrina along the Gulf Coast.

COLLINS: We know that $1.3 billion overall was -- was basically distributed by the Red Cross to something like 1.4 million households.

What do you have to say about such a humongous amount of money and the checks and balances that need to be done in order to disburse that money safely?

SCOTT: Well, I think it's easy to do a Monday-morning quarterbacking on how the Red Cross handled this situation.

The fact of the matter was that they were under tremendous pressure to get a lot of money out the door to a lot of people who needed it right now. And they did set up safeguards and protections. Unfortunately, we have, after the fact, found out that those safeguards and protections were not adequate.

And a whole lot of folks who had no entitlement to any of this money, in fact, did receive a whole lot of it.

COLLINS: Can you tell us how much money overall was stolen?

SCOTT: Of the 49 people indicted to date, we have traced about $200,000 in lost fraudulent money to them. We anticipate and estimate at this point in time that the total loss is going to be somewhere between $300,000 and $400,000.

COLLINS: We are talking about $1.3 billion. Is that a lot of money? Obviously, it never should have happened in the first place.

SCOTT: Well, it's certainly a very high percentage of the total amount that did go out the door, was handed out by the Red Cross. So, and, certainly, in terms of percentages, that is a lot of money. And any time we have got -- when we're talking about $400,000, potentially, being stolen in a fraud, that's a lot of money.

And especially when you put it in the context of this overall situation, where it is good-hearted American citizens donating to a time-honored American tradition, the Red Cross, to help their fellow citizens in a time of need, that is a lot of money.

COLLINS: Sure. That is the real danger here, of course.

McGregor Scott, thank you.

SCOTT: Thank you.

COLLINS: Let's go ahead and find out now what the Red Cross has to stay about all of this.

Steve Cooper is a senior vice president with the American Red Cross in Washington. He joins us now.

Mr. Cooper, what -- what kind of internal investigation is going on at this point at the Red Cross?

STEVE COOPER, SENIOR VICE PRESIDENT, AMERICAN RED CROSS: Well, as Mr. Scott stated, we are working very actively with the Hurricane Katrina task force. That includes the Department of Justice, the FBI, the Secret Service, and the various court officials and representatives.

COLLINS: Where do you think the process broke down?

COOPER: What we found is that, while we did, indeed, put safeguards in place, they were not fully adequate to prevent 100 percent or ensure 100 percent of the money that was very generously donated by the American public reach the intended victims of Hurricane Katrina.

COLLINS: But it seems like there really needs to be a very delicate balance in -- in those measures that you take to make sure the money goes to the right people, the checks and balances, as you say, and, then, this incredible urgency and how important it is to get that money out the door quickly to the people who need it most. How do you balance the two?

COOPER: We felt that it was far more important for us to move as quickly, as effectively, as efficiently and as rapidly as we could to assist the almost four million people who were affected by Hurricane Katrina and displaced.

And we felt that, even though we knew there was some small possibility of fraud, we put the appropriate safeguards in place, as best we could. But we made the decision to take that risk in order to help as many people as possible in as quickly a time frame as possible.

COLLINS: Do you think this type of fraud could have been preventable?

COOPER: I don't think that we could have prevented it entirely.

In -- with all due respect to Mr. Scott's calculations, the -- the actual number of cases that we are investigating with law enforcement represent about 4,000 cases out of 1.4 million cases of assistance. That's actually a very small percentage.

And, even the dollar amount, which we take very, very seriously, the $400,000 that he spoke to, is a significant amount of money. We absolutely do care. Again, it is actually a small percentage, when compared to the $1.4 billion that we distributed.

COLLINS: What do you say to the American people who really trusted the Red Cross and now are starting to think to themselves, well, I don't know; can I really trust where this money will go?

COOPER: Well, first and foremost, we want to say thank you and to thank again all of the people who contributed so generously.

But we also want to reinforce that, in fact, we believe that, with the additional safeguards that we are putting in place, with the recommendations of the FBI and the Secret Service, that, should we ever find ourselves with a disaster of the scope and complexity of a Hurricane Katrina, that the American public can continue its high level of confidence that the American Red Cross will protect the funds that we receive and will properly distribute those to the people who should properly receive them.

COLLINS: Steve Cooper with the American Red Cross, thank you.

COOPER: Thank you. COLLINS: We're going to move on now to a story that is still developing as we speak. This is what it looks like right now in the suburbs around Oklahoma City, where firefighters are battling fast- moving grass fires there.

Earlier, though, this afternoon, the flames raced into a neighborhood, destroying at least five homes. Three people suffered minor burns.

And it's the same story in the suburbs around Fort Worth, Texas. At least 70 separate wildfires have been reported across north and central Texas. They are the result of crackling dry conditions, warmer-than-normal temperatures, and very powerful winds.

We want to go ahead an get an explanation now from CNN's severe weather expert, meteorologist Chad Myers.

Something like 80 degrees in December around Dallas?

CHAD MYERS, CNN METEOROLOGIST: Eighty-one. And...

COLLINS: Unbelievable.

MYERS: And the relative humidity was 8 percent.

That was part of the problem. The air was coming out of the mountains, blowing out of the Northwest in a very dry direction -- 10, though, miles per hour right now in Dallas. The wind speeds have come down a little bit. That's helping, just a touch, get some of those fires under control.

I have been looking at the radars. We actually could -- for a while today, we could see the smoke particles on radar. The smoke was so thick, the Doppler radar didn't know that it wasn't raining there. So, we were really tracking the storm dot by dot by where the radar was seeing the smoke. Now that has now moved on off, the cold front will be moving in. The winds will be shifting directions. It will be getting colder tomorrow. And the air won't be as dry.

What happened here? We talked about it yesterday, 30 inches of snow across parts of the Sierra a couple of days ago. That storm moved to the east. And it's now spinning around through the East Coast, may even have some severe weather into parts of places like Memphis or Nashville overnight tonight, although it hasn't fired up yet.

This is just a stream of moisture coming in to the West. This is the next. This is number two of five storms. Number one is the one that was in Oklahoma. This is number two. That's number three. And there are two more back behind it. This place is going to be absolutely wet as could be for the next couple of days, from Eugene, down into San Francisco, even into Reno.

Areas could pick up 15 inches of rain by Wednesday of next week, when that fifth storm finally hits. That's flooding rainfall -- Heidi. COLLINS: Hopefully, that will make its way to Texas, too.

All right, Chad Myers at the CNN Weather Center -- thank you, Chad.

MYERS: You're welcome.

COLLINS: And this time of year, winter storms stack up off the Pacific Coast, like jets in a holding pattern.

And, as you just heard from Chad, they are causing quite a mess in the Pacific Northwest.

That includes the San Francisco area, where Rusty Dornin is standing by.

Hello to you, Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Hello, Heidi.

And we do refer to them as pineapple express when they keep coming through like that. Now, we have been waterlogged throughout last week. Now we are hearing they're stacking up again. But we have had a break this afternoon. There hasn't been any rain for about three or four hours.

It's getting dark in San Francisco. We are at the Golden Gate Bridge, where there are still a few surfers out there who are anxious to catch what is supposed to be some very heavy surf pushed by these storms. Tonight, the waves, through tomorrow, are going to get to be 20 to 25 feet.

And these surfers are hoping to catch those waves. Now, as Chad was talking about, up in the Sierra, there were storms the last couple days. Now, once again, they're going to be getting a lot more snow up there. That's great news for the skiers, of course.

And, up in Washington, Snoqualmie Pass, also, a lot of snow up there -- and they have a lot of traffic problems, of course, due to all that snow coming in.

So, it looks like we might get hammered through the next few days, but this is -- we have been seeing a lot of moisture. The difference is, on these series of storms, is, we're going to be getting some gusty winds. And, of course, because the soils are so saturated at this point, we may be seeing some mudslides and, of course, local flooding, because the tides are coming in here right now.

And, in my hometown, just three miles from here, when the tides come in and all the water comes down the hillsides, there's a lot of times there's flooding. And that causes massive traffic problems -- Heidi.

COLLINS: Well, I hesitate so say it, because we want everybody to stay safe, but, boy, what a beautiful shot you brought to us tonight.

Rusty Dornin, at the Golden Gate Bridge, thanks. And keep dry out there. That's for sure.

Still to come tonight, the story of a teenager who was afraid to show his report card to his father. His mother says, that's why the boy killed him.

(BEGIN VIDEO CLIP)

LEONI WATTS, MOTHER OF RYAN WATTS: I said, "Honey, why?"

And he said: "I couldn't do enough. I couldn't make him happy. There's no way to please him."

(END VIDEO CLIP)

COLLINS: Stay with us for the details that did not make the headlines. What led up to a death over a report card?

(BEGIN VIDEO CLIP)

DEBORAH FEYERICK, CNN CORRESPONDENT: I'm Deborah Feyerick at a mall in Maryland. If you think shoplifting is just a petty crime, think again. Professional gangs have turned it into a $30-billion-a- year criminal enterprise. And you're the one paying.

That's coming up on PAULA ZAHN NOW.

(END VIDEO CLIP)

COLLINS: And, later in the hour, if you're looking for a way to dispose of your gift cards or your holiday loot, Jeanne Moos has found a book full of answers to questions you will probably never have the nerve to ask.

(COMMERCIAL BREAK)

COLLINS: It might be hard to believe, but you're going to have to trust your eyes when we show you our next story. It's about shoplifting.

But, believe me, it's a type like you have never seen before, because it involves violent organized gangs of professionals who steal tons of merchandise. And they do it right under the noses of security guards and shoppers just like you. And it costs businesses more than $30 billion a year.

Here's Deborah Feyerick now with tonight's "Eye Opener."

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): Take a look at this surveillance video from a suburban shopping mall. This is no ordinary shoplifter. Just watch -- one, two, three pairs of shoes all stolen in less than a minute. Now watch this woman, different store, different day, same technique.

While her partner acts as a lookout, she slips box after box of perfume into a bag. Police call it boosting, organized shoplifting carried out by trained gangs of professional thieves.

(on camera): How much merchandise are we talking about at any one time in an hour?

DETECTIVE DAVID HILL, MONTGOMERY COUNTY, MARYLAND, POLICE DEPARTMENT: In an hour, we have made an apprehension where we recovered $40,000 worth of merchandise.

FEYERICK: In a single hour?

HILL: In a single hour.

UNIDENTIFIED FEMALE: (INAUDIBLE) security officer is holding an adult male.

FEYERICK (voice-over): Maryland Detective David Hill heads the Montgomery County police retail theft unit.

HILL: Target high-end stores...

FEYERICK: We met Detective Hill at a mall, but agreed not to mention which one. Stores are desperately afraid of drawing unwanted attention from gangs.

(on camera): So, one person is stealing. One person is doing surveillance. What are their roles?

HILL: You have collectors, packers, ones that take it to the car, others that are watching their backs to make sure they're not being followed by security.

FEYERICK (voice-over): Authorities say the gangs that have made the biggest dent are largely from Latin and South America.

UNIDENTIFIED MALE: My eyes never look down, always straight.

FEYERICK: This man, who we will call "Carlos," says it's not unusual for his gang to hit seven malls in one day. He asked that we disguise his voice and face, afraid of retribution by those who run the criminal enterprise.

UNIDENTIFIED MALE: They are very dangerous, because, in their countries, they rob banks, they kidnap people. They're drug dealers. If you fail them or if you -- you do something against them, yes. These people is dangerous.

FEYERICK: Authorities don't know how many gangs there are or who runs them. Yet, police believe organized shoplifting has touched nearly every major retail chain in the country.

Joe LaRocca is with the National Retail Federation, the group that represents many major store owners. JOE LAROCCA, NATIONAL RETAIL FEDERATION: They are targeting particular types of merchandise. They have an order list. And they're going out and stealing what's on their order list.

FEYERICK: You name it, police say, they will steal it, jeans, lingerie, iPods, baby formula, over-the-counter drugs. The demand is endless, stolen merchandise then sold online, or at discount shops that fuel a black market.

(on camera): It looks like they have just been shopping in the mall.

FEYERICK (voice-over): Even with store clerks and shoppers around, it's surprisingly easy. Detective Hill showed us one of the tools the gangs use, boosting bags, ordinary shopping bags lined with foil to smuggle stolen merchandise out of a store.

(on camera): This is regular aluminum foil?

HILL: Right.

FEYERICK: Regular aluminum foil.

(CROSSTALK)

FEYERICK: So, somebody's put in a lot of work just to make this one bag.

HILL: Oh, yes.

FEYERICK: OK.

HILL: And what that does is, when they walk out of the store with merchandise that has sensors on, the alarms will not be activated.

FEYERICK (voice-over): The bag also boosts the thieves' efficiency.

(on camera): So, then, I go over here and I'm just kind of looking at these jeans and then I can very easily just take it.

HILL: Come over.

FEYERICK: You put it into the bag.

HILL: Drop it right in.

FEYERICK: OK.

And, while you pick it up -- now, this is interesting. So, you pick it up. Then you can effectively walk out.

HILL: I walk out, unless I want -- want more.

FEYERICK: And... HILL: And they usually...

FEYERICK: And...

(CROSSTALK)

HILL: They're going to want this full.

FEYERICK (voice-over): This video command center at a major department store invited us to see this recent hit by a shoplifting gang.

(on camera): The woman in the white looked back at her colleague.

HILL: She gives the OK. The coast is clear.

FEYERICK (voice-over): Here's how it works. While her partner trails her, the woman in white picks up a black shirt. She holds it up to block the security camera, then loads her bag with perfume. She passes the perfume to a third woman, who switches it to a different bag, and walks out of the store.

HILL: Over 40 items of perfume were taken. And it was just under $3,000 recovery was made.

FEYERICK (on camera): Not bad for eight minutes' work.

HILL: Not bad at all.

FEYERICK (voice-over): These women were caught. But even when police do make arrests, most of these thefts are treated as misdemeanors. The criminals get no more than 30 days in prison.

Stephen Chaikin prosecutes organized crime in Montgomery County, Maryland.

STEPHEN CHAIKIN, PROSECUTOR: When they get into the court system, since they have multiple names and Social Security numbers, it's often hard to know who we're dealing with. And, sometimes, they bond out. They get out of jail. We never see them again.

FEYERICK: The other reason shoplifting has turned epidemic, because of their competitiveness, stores are notoriously secretive, sometimes, even refusing to alert mall security or a store next door. That's now changing.

(on camera): So, basically, this database allows the stores to talk to each other.

LAROCCA: Absolutely.

FEYERICK (voice-over): Stores have joined together to create a national crime database. Retailers that are targeted can now post information, like the type of crime, where and how it was committed, and a description of the criminal. LAROCCA: We need to be able to go after these individuals. We need to put them behind bars for their crimes. And we need to keep them out of our retail stores.

FEYERICK: Carlos, who was recently arrested and is now awaiting trial, says it's not so much the individual, but the gang leaders.

UNIDENTIFIED MALE: These people, I don't think they're going to stop.

FEYERICK: And even stores and police acknowledge, it will take a very long time to bring organized shoplifting under control.

Deborah Feyerick, CNN, Maryland.

(END VIDEOTAPE)

COLLINS: And there's this: With the rise of these super shoplifters, big retailers like Sears and the Gap are fighting back with their own special investigative teams. Still, they prefer to keep their operations low-key and their strategies a secret.

Coming up next, a teenager who is facing adult charges of murder. His mother says he didn't want to show his report card to his father, so the boy killed him. The defense says, charging him as an adult is too harsh.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He's just a good kid who's scared and who came out of a bad situation at home.

(END VIDEO CLIP)

COLLINS: That is not how police see it, but this story involves much more than bad grades. Stay with us for that.

And, a little later, a disorder you may have never heard about. It causes perfectly normal people, even attractive ones, to see themselves as misshapen monsters.

(COMMERCIAL BREAK)

COLLINS: Here's a mystery than investigators are trying to solve, even as we speak, a case that involves the especially brutal murder of a California man.

Police say his teenage son confessed, but here's the mystery. Is it even remotely possible that an otherwise average boy could be driven to extreme violence over something as ordinary as a bad report card?

Ted Rowlands has been looking into the case and found more than you might expect.

(BEGIN VIDEOTAPE) TED ROWLANDS, CNN CORRESPONDENT (voice-over): Ryan Watts used to brag that his dad knew all about computers and cars. The 15-year-old boy and his father, John Bruner, lived together in this suburban home in the Northern California city of Santa Clara.

Neighbors say father and son used to spend time together fixing up an old Mustang, which still sits covered in the driveway. On December 12, Ryan Watts called 911 to report that his house was on fire. The fire was relatively small, taking less than a half-an-hour to put out, but it was fatal. The 350-found body of John Bruner was found in a back bedroom.

For rescue crews, it was a sad story, as a firefighter told a local press that the victim's 15-year-old son had been out of the house when the fire started.

DAVE PARKER, SANTA CLARA FIRE DEPARTMENT: When he came back, there was smoke in the house.

ROWLANDS: Ryan Watts would go home with his mother, Leoni Watts, who says she had no idea what she was about to learn. Ryan would tell his mother that his father used to constantly yell at him and beat him, that he used a bamboo stick to hit Ryan on the legs.

LEONI WATTS, MOTHER OF RYAN WATTS: I said, "Did you cry?" because I wanted to know how hard -- you know, and he said, "When I was younger and it was happening, I did, but not -- not later."

ROWLANDS: A day after the fire, an autopsy revealed that John Bruner died of two gunshot wounds. Ryan Watts confessed to police that he not only killed his dad, but planned it out -- the reason, a bad report card.

Apparently, Ryan was so scared of how his father would react to the bad grades, he killed him.

WATTS: I said, honey why? And he said, "I couldn't do enough, I couldn't make him happy. There's no way to please him."

ROWLANDS (on camera): According to court documents, Watts told police that he took one of his father's .45 caliber handguns from the house where they lived. And on the morning of the murder, Watts said he left with that gun and a knife. But the 15-year-old says he didn't go to school. He snuck back into the house, going through backyard.

(voice-over): According to the documents Watts says he went back into the house and shot his father twice, while he was on the phone. Watts told police that he set fire to the bedroom, stashed the gun in a kitchen cabinet, and walked to this Taco Bell to eat lunch before calling 911. Ryan Watts is being charged as an adult, a decision prosecutors made in part because the murder was planned.

BRIAN MATTHEWS, DEFENSE ATTORNEY: He's a 15-year-old boy. Essentially he's a child.

ROWLANDS: Brian Matthews is a public defender assigned to this case. He says charging this 15-year-old as an adult is too harsh.

MATTHEWS: He's just a good kid who's scared and who came out of a bad situation at home. He's just a good kid.

ROWLANDS: Leoni Watts said on a recent visit to the juvenile detention facility, Ryan told her he was having nightmares, but felt a sense of relief.

WATTS: That tells me that his private hell was at lot worse than what's going on at juvenile hall. In fact, that he had felt safe there finally.

ROWLANDS: Prosecutors will not talk about the case. Watts, who made a court appearance last week, has yet to enter a plea. If convicted, the 15-year-old could spend the rest of his life in jail. Ted Rowlands, CNN, Santa Clara, California.

(END VIDEOTAPE)

COLLINS: And one more thing, although Ryan Watts is being tried as an adult in California, the 15-year-old is not eligible for the death penalty because of his age.

Before we have a break, I have a question for you. Be honest. When you look at yourself in the mirror, do you like what you see? Coming up, some ordinary looking people who were sure they looked monstrous.

(BEGIN VIDEO CLIP)

ROBIN: You're just really so unattractive that, like, people are going to make a comment about you and that you don't even really deserve to be out in public.

(END VIDEO CLIP)

COLLINS: Next, a bizarre disorder that causes some people to lock themselves away, even though they look perfectly fine.

(COMMERCIAL BREAK)

COLLINS: We're starting something new tonight. We're calling it "Mysteries of the Mind," stories that will probe the often baffling forces that work inside of our brains. Imagine looking into the mirror this New Year's Eve and thinking you look like a monster, even though everyone else around you thinks you look just fine.

It sounds bizarre, but for millions of Americans, it is reality. They're struggling with a disorder that can have devastating consequences. Here's medical correspondent Elizabeth Cohen with tonight's "Mystery of the Mind."

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I felt like this sense of ugliness, not fitting in and being awkward looking. UNIDENTIFIED FEMALE: My face is hideous, like a troll under the bridge.

UNIDENTIFIED MALE: I took the mirrors down, I covered them up.

UNIDENTIFIED FEMALE: Absolutely deformed, just extremely unattractive.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT (voice-over): These four people are terrified by the monster in the mirror. Take the worst worry you've ever had about your appearance. Multiply it a hundred times, a thousand times.

As many as five million people in the United States, normal, even attractive, are crippled by this mental torment everyday.

A psychiatric illness called Body Dysmorphic Disorder or BDD.

Robin was diagnosed with the disorder in 2002.

ROBIN: You're just really so unattractive that people are going to make a comment about you. You don't even really deserve to be out in public.

COHEN: Kathy was diagnosed just two years ago.

KATHY: It's hair, teeth, eyebrows, obsession with my body itself. It's extreme to the point where it can almost overtake your life.

COHEN: Kathy and Robin are too ashamed to show their faces on television.

DR. KATHARINE PHILLIPS, AUTHOR: They are obsessed that there is something wrong with their appearance when to other people they look fine.

COHEN: Dr. Katharine Phillips, who wrote the book, The Broken Mirror, directs the Body Dysmorphic Disorder and Body Image program at Butler Hospital in Rhode Island.

PHILLIPS: Genetic makeup probably plays a role and increase a person's risk of getting BDD. Life events may play a role. For example, if you're teased a lot as you're growing up, or teased about your appearance specifically. Maybe that increases the risk of BDD. And our society's incessant focus on appearance may also play a role.

COHEN: The problem started when they were just children. Robin believes her obsession with the mirror and her flaws came from her father, who she describes as a perfectionist.

ROBIN: If there was one pimple on my face, then my whole day was ruined. It affects your social life, family, academics, health. It just affects whose you are.

COHEN: Kathy's obsession with her appearance started with the urge to be neat, clean, and well groomed.

KATHY: My showers, since I was a little girl, were like an hour and a half. And to this day, I still take about 30 minutes to brush my teeth. And I still take like an hour to an hour and a half to take a shower. So, I think it's always been there.

COHEN: Kathy says an abusive relationship with a high school boyfriend drove her into a deeper despair.

KATHY: I started to feel that my appearance was hideous and really became obsessed with my appearance and having to always look either perfect or obsessing about it. I've just never outgrown it.

COHEN: Kathy draws us a picture of what she sees when she looks in the mirror.

KATHY: This is the stringy hair that I have. This is the messed up eyebrows that I have. Long, narrow, thin face, big nose.

COHEN: It's that image that drives her to change her appearance.

KATHY: I've had one surgery, breast implants. I've had that done twice, because I wasn't happy with the first job. If I could have it done again, I would have it done again, I just can't afford it. I just feel like it's never right. My goal is to kind of be, Playboy bunny image. That's what I think the men want and that's what I feel like I want to look like.

COHEN: An impossible goal that sent Kathy into a deeper depression and her BDD spiraling out of control.

PHILLIPS: BDD is a very serious mental illness and we have found that a surprisingly high percentage of people with BDD have an alcohol or drug problem, about half.

COHEN: Kathy used illegal drugs to numb her pain and did not leave her room for five years.

KATHY: As low as can be. Depressed, out of my mind. Sleeping 18 hours a day, and then use drugs while I was awake. And then go back to sleep for 18 hours. It was a living hell.

(END VIDEOTAPE)

COLLINS: So, is there a way out? Elizabeth Cohen will be right back with a woman who found the courage to confront her inner demons.

(BEGIN VIDEO CLIP)

TARYN: Going into a restaurant was a terrifying experience. I'd have to actually stand outside and do some type of breathing exercise, or do something before I could even walk in.

(END VIDEO CLIP)

COLLINS: Some success stories, plus three important ways to tell the difference between BDD and normal concern about the way you look.

(COMMERCIAL BREAK)

COLLINS: Before the break, we heard about a shocking illness that affects as many as 5 million Americans. It's body dysmorphic disorder, and when it strikes men and women, they see themselves as monsters, even though they look perfectly normal. Now, you'll meet two more victims who are struggling with this surreal illness.

Once again, here is medical correspondent Elizabeth Cohen.

(BEGIN VIDEOTAPE)

COHEN: You've met Robin, you've met Kathy. Now, meet Taryn.

She is comfortable enough, just barely, to be seen on TV. But she still feels deformed.

(on camera): But I'm sitting here right now looking at you, and you're beautiful.

TARYN: It's -- thank you for saying so. I think that's one of the big aspects of BDD is that it is so hard to understand. I think many people that suffer from it are somewhat attractive. They truly are not deformed.

COHEN: When you were at your worst, what was your life like?

TARYN: I was unable to really do anything socially. Going into a restaurant was a terrifying experience. I'd have to actually stand outside and do some type of breathing exercise, or do something before I could even walk in. Once I was in, in the seat, I was so uncomfortable, I usually had to get up and leave.

COHEN: Dr. Katharine Phillips is a leading expert on Body Dysmorphic Disorder.

PHILLIPS: The three main ways that we differentiate BDD from normal appearance concern is the preoccupation, the emotional distress, and the interference in one's daily functioning.

This is what makes BDD different from a passing thought about, I don't like my hair today. It makes it different from normal appearance concerns. It makes it different from vanity.

COHEN: It's not only a women's disorder. Almost as many men suffer from BDD.

DOUG: My father didn't really establish any self-esteem in me.

COHEN: Growing up, Doug Terrell (ph) says he was verbally abused by his father. Told he was stupid.

DOUG: I had one good friend in high school. I never dated. And then when I got married, that's when basically, this kind of started.

COHEN: Under pressure from his wife, who wanted to have children while did he not, Doug developed the classic symptoms.

DOUG: I get all panicky and nervous and I try to tell myself, oh, Doug, it's not that bad. You know, you're not an elephant man or anything. And -- but I just start freaking out and my heart starts beating like crazy and I start crying and breaking down.

COHEN: Doug was so horrified by what he saw in his mirror he left the bathroom lights off, even shaved in the dark. It got so bad that Doug, like 80 percent of BDD sufferers, according to one recent study, thought of ending his life.

DOUG: I was going to hang myself on the pipes of the basement but I figure I'll screw that up and the whole pipe system would break and then I'll end up in the loony bin for the rest of my life.

TARYN: If somebody had said to me this is it for you, tomorrow is your last day, I would have gladly closed my eyes, went to sleep and that would have been the end. I wouldn't have thought twice about it.

COHEN: Four lives destroyed by a debilitating disorder.

DOUG: I didn't lose my virginity until I was 21.

TARYN: I mean, I missed out on going to my prom.

ROBIN: I lost the sense of who I even was.

KATHY: I'm still struggling to tell myself that I'm OK.

TARYN: It takes a lot from you.

COHEN (on camera): And even now sitting here, do you worry about what you look like?

TARYN: It's always there. Whether it's in the back of my mind or the forefront, it is something that is always there, I think.

COHEN (voice-over): There is no cure for BDD. Taryn, Doug, Robin and Kathy still have days when they can't look in the mirror. But medications and therapy have helped them go to work, to school, have friends and lead lives that will never be anything close to normal.

(on camera): Did you ever think you'd be able to take a walk through Central Park?

TARYN: Not Central Park. I mean, definitely not a park so big with so many people. That was something -- no I definitely don't think I thought that would have been possible considering where I came from but it does go to show you that this does get better. It's not a life sentence. It doesn't have to be.

COHEN: Elizabeth Cohen, CNN.

(END VIDEOTAPE) COLLINS: And one more thing. Often, body dysmorphic disorder is misdiagnosed, because a lot of doctors just aren't familiar with it. But once it is diagnosed, treatment includes therapy and anti- depressants.

Now we're just getting word of a big story coming out of Texas tonight. The Associated Press reports that Rick Causey, Enron's former chief accounting officer, has reached a plea deal and is going to testify against Enron's top bosses, Ken Lay and Jeffrey Skilling at their trials. Causey was supposed to have gone to trial with them.

Now, with more of this hour's top stories, here's Erica Hill at HEADLINE NEWS.

ERICA HILL, CNN HEADLINE NEWS: Thanks, Heidi. The White House continues to insist President Bush's domestic surveillance order is limited only to suspects in the war on terror. There have been reports that telecom companies are helping the government collect and analyze massive amounts of e-mail and phone conversations, but the White House had no comment on that today.

The president, meantime, is spending the holiday week at his Texas ranch. The White House says he's catching up on some reading. One of the books said to be a critical view of the role of the U.S. military in Iraq and other places around the world.

The U.S. military confirming the deaths of two American pilots. Their Apache helicopter crashed west of Baghdad yesterday. The Apache, with the crew of two, is the Army's primary attack helicopter. The Pentagon says no hostile fire was involved in the crash.

The death toll for the war in Iraq now stands at 2,174.

After changes in security at the nation's airports, then Transportation Security Administration says it is seizing thousands fewer sharp objects from travelers compared to last year's holiday travel period. Still, the TSA is waiting -- says waiting times for security about the same. An average, about five minutes.

And Santa may have come and gone. Analysts, though, can't exactly figure out whether the season was naughty or nice for retailers. And analysts say it remains to be seen whether those gift cards and after-holiday sales can help boost retail sales above expectations.

I don't know if I can do a little damage tomorrow, Heidi, maybe I can help them out. Back over to you.

COLLINS: Yeah, fly up to 5th Avenue, we'll do it together. Erica Hill, thank you.

Coming up next, the answers to questions you might ask your doctor but only after a few too many drinks.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Why do men have nipples?

UNIDENTIFIED MALE: You're asking me?

UNIDENTIFIED FEMALE: For piercings.

(END VIDEO CLIP)

COLLINS: Do you know the answer? Jeanne Moos know as place where you can find it without being embarrassed. Stay with us for that.

(COMMERCIAL BREAK)

COLLINS: There are some questions you can ask out loud on a prime time cable TV show and some you better not. But now there's a place where you can find a doctor's answers to all of them. Our Jeanne Moos had some fun getting them.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice over): If you've ever wondered why you yawn when someone else does, if you've ever questioned why you have an inny rather than an outy, if you're navel gazing has wandered north of the belly button to ponder ...

UNIDENTIFIED FEMALE: Why do men have nipples?

UNIDENTIFIED MALE: You're asking me?

MOOS: Now you can ask them. The guy who wrote this: "Hundreds of Questions you Would Only ask a Doctor After your Third Martini."

Does urinating on a jellyfish sting stop the burn?

UNIDENTIFIED FEMALE: Yes.

MOOS: Wrong. She must have been watching "Friends."

COURTNEY COX, "FRIENDS" ACTRESS: Jellyfish sting, no, it hurts it hurts.

MATT LEBLANC, "FRIENDS" ACTOR: You're going to have to pee on it.

COX: It doesn't hurt that bad.

MOOS: Dr. Billy Goldberg says forget urine, use vinegar.

Dr. Goldberg is an emergency room physician who teamed up with a humorist to write the book.

DR. BILLY GOLDBERG, CO-AUTHOR, "WHY DO MEN HAVE NIPPLES?": People harass me at parties, I get phone calls in the middle of the night from my family. Someone's tongue turned black from drinking Pepto Bismol.

MOOS: Folks ask things like can you lose a contact lens in the back of your head? Nope.

GOLDBERG: It's a closed space, so it can't really go anywhere.

MOOS: Is it bad to crack your knuckles? Not Really. You're just popping air bubbles, though you might stretch your ligaments. But let's get down to basics. Why does sweat stink? Because it's basically water.

UNIDENTIFIED FEMALE: Because it goes through a lot of crap to get out.

UNIDENTIFIED FEMALE: Maybe because there's something that you ate?

MOOS: Sweat stinks when it interacts with bacteria on the surface of the skin.

Maybe you've wondered if it's dangerous to hold in a sneeze.

UNIDENTIFIED MALE: You hold something back you might blow your brains out your ear or something like that.

MOOS: Sneezes have been clocked at up to 100 miles an hour.

As for contagious yawning? They think it has something to do with human subconsciously imitating one another.

GOLDBERG: I like the fact that other animals yawn. I never knew that. I found out that fish yawn. Have you ever seen a yawning fish?

MOOS: We've seen a yawning two-headed turtle. Where one head yawned and other followed suit. But why do men have nipples?

UNIDENTIFIED MALE: Women need something to play with as well.

UNIDENTIFIED FEMALE: Piercings?

MOOS (on camera): Piercings, that's excellent. Actually all embryos develop nipples until the male chromosome kicks in at about six weeks.

Co-author Mark Leyner showed off his embryonic souvenirs.

MOOS: That's a third.

MARK LEYNER, CO-AUTHOR, "WHY DO MEN HAVE NIPPLES": That's a little thing. That's not a third one.

MOOS (voice over): If you ask most guys why men have them?

UNIDENTIFIED MALE: I don't know. Maybe I'm a morphodite (ph).

MOOS (on camera): OK. Thank you. Morphodite.

MOOS (voice over): Now, there's a guy who finds the nipple inexplicable. Jeanne Moos, CNN, New York. (END VIDEOTAPE)

COLLINS: And there's this. Can you catch a disease from a toilet seat? The book says, yes, of course, but it's not very common. However, sitting in your office might be worse for your health than sitting on the toilet.

For instance, a typical office space has 400 times more disease- causing bacteria on it than the average toilet seat. I know because I did that story. We'll be right back, everybody.

(COMMERCIAL BREAK)

COLLINS: That's all we have tonight, everybody. Thanks for joining us. "LARRY KING LIVE" starts right now.

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