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Nancy Grace

Missing CNet Editor James Kim Found Dead in Oregon Mountains; Young Man Fakes Retardation for Money

Aired December 06, 2006 - 20:00   ET

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

NANCY GRACE, HOST: Breaking news tonight: How can an entire family go missing over a Thanksgiving road trip? That`s just what happened to a family of four -- mom, dad, 4-year-old, 7-month-old. Then a miracle, the mom and two children found, surviving by burning the car tires for warmth. After a massive search, tonight we learn the father, 35-year-old James Kim`s body, has been spotted there in the Pacific Northwest wilderness, Portland area.
And then to Tacoma, a mother and son duo facing jail time, accused of -- listen to this -- raking in over six figures by faking the son`s mental retardation for over 20 years, living a double life to scam government money, nearly $1 million. Prosecutors say they caught it all on videotape.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: At 12:03 hours today, the body of James Kim was located down in the Big Windy Creek...

UNIDENTIFIED MALE: This obviously is extremely tough on those that have an emotional commitment throughout these last several days here.

UNIDENTIFIED MALE: Most of us have breathed and lived this for days. And yes, you do take it personal. And it`s been tough.

(END VIDEO CLIP)

GRACE: Good evening, everybody. I`m Nancy Grace. I want to thank you for being with us tonight. First, to the Pacific Northwest, the Portland area, out to CNN correspondent Thelma Gutierrez. Thelma, thank you for being with us. Tell us about the discovery of Kim`s body.

THELMA GUTIERREZ, CNN CORRESPONDENT: Well, Nancy, all along, searchers had been looking within a five-mile gorge, a very deep, rugged area up in the mountains, for James Kim. They knew that he was lost in this area for about five days. Suddenly, today, as they were conducting a search over that area by helicopter, a pilot spotted something down on the ground. They had two SWAT members. They lowered them down to the ground. And that is when they discovered that James Kim had indeed died. And they then went into recovery mode -- Nancy.

GRACE: There in Merlin, Oregon, joining us, Thelma Gutierrez with CNN. Thelma, do we know yet the cause of death?

GUTIERREZ: No. At this point, Nancy, they are not speculating on that. James Kim`s body has been taken to the coroner`s office. They say that they will conduct an autopsy. They will have that determination a little bit later.

Right now, though, I can tell you that the search and rescue teams that are up here, everyone`s reeling from this. People are very emotional and very distressed because for the past five days, they said they had been breathing this whole thing. They had been living this entire nightmare, trying to go out and find him. And they were confident for a good amount of time that they would find him alive. And this is a man who`s very resourceful. This is a person who had camping experience. He took clothing with him. He had two lighters. Unfortunately, though, they did not get to him in time.

GRACE: Thelma, I understand that he left a trail of sorts of bits of map and clothing. Tell me about that.

GUTIERREZ: Well, you know, yesterday, Nancy, they discovered a pair of gray slacks near a drainage ditch where they believed that he had been walking through. And they knew from talking to the wife that this was an extra pair of pants that he had with him. And then later on, they started discovering bits and pieces of an Oregon state map. They also found a couple of sweatshirts, a red T-shirt, also a girl`s skirt, items that he had taken from his car as he went out to search for help.

They found all of these items in some kind of a pattern, and they believe that James Kim might have been wanting to let rescuers know that, in fact, he was there. I mean, they believe that he had placed those articles out there as some kind of a sign to the search and rescue teams.

GRACE: So Thelma, he was reaching out to the rescuers. He was trying his best. And I also understand, after reading all the research, Thelma, that some of the rescuers couldn`t even get up and follow his trail, he was so dogged, he was so determined to try to save his family.

GRACE: Well, you know, it`s so difficult from down below to really understand what the terrain is like up there. We were talking to a family who had been stranded out here back in March. They were stranded in that exact area. This is a place where you walk, it`s covered with snow. Suddenly, there`s a sheer cliff and you just fall right off the mountain. So it`s very, very treacherous.

And the rescuers, as you had mentioned, Nancy, were down on the ground, and they were looking up over this cliff. There was no way for them to even scale the cliff to be able to get to him. They believe that he walked about eight miles down the road, and for some odd reason, he went off into the woods. And they`re not sure if perhaps he just lost his way on the road and then got lost in the woods.

GRACE: Thelma, the snow there -- I`m wondering -- I can`t get an understanding of it. Is the snow up over the road, so he`s walking in the snow, he may think he`s on the road and he`s not on the road any longer?

GUTIERREZ: Well, that`s exactly what one of the family members that we had talked to, who were lost back in March, described to us. They say that this whole area is covered with snow. And so you`re walking along the road, you think it`s the road, suddenly, you can just step right off the mountain. And it`s a very, very dangerous area up there.

But that`s exactly how the rescuers described it to us. You have quite a bit of snow. Who knows what it was like the day after Thanksgiving, when the family actually got stranded, probably a lot more snow than there is right now. This man waits a week in the car with his family. They`re trying to survive. They burn the tires. They eat berries. They drink melted snow. They save what little provisions they have for the kids.

And then suddenly, he decides it`s time to walk out. And it must have been a very difficult decision, but he walks out along that road. And we know from what rescuers are telling us today that he walked down that road approximately eight miles and somehow lost his way.

GRACE: Joining me right now in Merlin, Oregon, Lt. Gregg Hastings with the Oregon State Police. Lieutenant, thank you so much for joining us again tonight. I saw one of your people practically break down in tears. You all took this search so personally.

LT. GREGG HASTINGS, OREGON STATE POLICE: We really did. It was -- it was tough news. All along, we really were optimistic that we were going to find James, and to all of a sudden have it end like this was extremely disappointing.

GRACE: To Andrea Macari, clinical psychologist. Andrea, that wife must be just torturing herself at this juncture, thinking, Why did I encourage him to go out? Why did I let him go out to try to get help? He`d be here alive with me and the children if I hadn`t let him get out of that car.

ANDREA MACARI, CLINICAL PSYCHOLOGIST: Can you imagine the "what if`s" this woman might be asking herself? It`s so sad. And I think, really, James had everything going for him. I really thought this was going to have a happy ending. Think about it. He had the determination of a father and a husband. He loved the outdoors. He was sort of like a closeted mountain man of a sort. He camped. He had lived in Oregon before. And he was also this gadget geek. He had the savvyness, the sophistication. You really would have thought he would have been able to navigate his way out of this one.

GRACE: You know, that`s a really good question. Back to Thelma Gutierrez, joining us, CNN reporter there in Oregon. Thelma, it`s my understanding that they may have gotten directions from one of these on- line map directories. Was this road closed for the wither? I mean, didn`t they notice that nobody else is on the road?

GUTIERREZ: Well, you know, on the question of this on-line map, we had heard that, too, Nancy. But talking with authorities up there who had detectives who actually talked to Mrs. Kim, they said that, actually, what happened is that they were making their way down to the Oregon coast. They were about to stay at a resort down there.

Suddenly -- you know, they`re driving. It`s evening. They missed the main highway turnoff, and so they pull out a map. Then they notice that there`s this other alternative route down to the coast. They decide to take it. It was not closed at the time. It looked from the map that it would be a short jaunt out to the coast. Suddenly, they`re stuck out in the snow.

We talked to another family who was stuck out there in March in the same exact area. They said, you know, you look on a map, and it looks like a fantastic short cut, but in fact, it`s actually a trap when you`re trying to take this in the winter, when the whole thing`s just covered with snow.

GRACE: Joining us also tonight, Brian Prawitz. He`s the news director with KQEN radio. He`ll be with us in just a moment to describe the terrain there.

With us also, Thelma Gutierrez. What is the terrain? I`m having a very difficult time imagining why the rescuers, giving it 300 percent the way they did, why they couldn`t pinpoint where this guy was. I mean, he was on foot in the snow.

GUTIERREZ: Well, you know, Nancy, one thing that we had heard yesterday that I think is very telling -- this is a very dense forest. There were five rescuers wearing very bright jackets, who were standing down below, waving at the helicopter. The helicopter went by, couldn`t even spot them.

We`re talking about a mountainous area full of ravines, very rugged terrain. Again, as we had said, you know, this family who was stranded out there before, they said that they were walking in chest-deep snow -- that`s in March -- through the area, that they could hear the planes up above searching for them, the choppers. They would wave. They would -- they had flares out. They had all kinds of reflective tape, you know, trying to get the attention of the people overhead. Nobody could even spot them. This is a very densely forested area.

GRACE: Thelma, describe the response when the rescuers looked down and they see the body prone there in this position. They knew immediately that Kim was dead. It`s my understanding the searchers broke down in tears. They`ve been trying for days and days around the clock to find this guy.

GUTIERREZ: Well, they had been trying to find him. They had worked tirelessly. They were working 12-hour shifts, Nancy, in these freezing temperatures, in very, very rugged terrain. And again, as you led off your show with the undersheriff breaking down -- he literally said that he was crushed, that many of the rescue workers were devastated to find out that the work was in vain. They had hoped all along that they would be able to find this man alive, that they would be able to reunite him with his wife, Kati, and his 4-year-old daughter and 7-month-old daughter.

GRACE: Yes, where are they right now, Thelma?

GUTIERREZ: But that wasn`t...

GRACE: Where are they?

GUTIERREZ: Pardon me?

GRACE: Where are they, the family?

GUTIERREZ: Right now, as we understand it, Nancy, the family is in seclusion, of course, mourning this loss.

GRACE: With us there on the scene, CNN correspondent Thelma Gutierrez.

Take a listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is where the car was located. There is a road, comes off the end of this yellow line, comes through here, comes around, there was the car. We were able -- Mr. Kim, when he left the car, followed the road up to the start of this drainage. That`s the top of the drainage, and that`s where he dropped down into it. This is where the pair of pants were found, when we talked about that. He worked down the drainage. This is where the articles of clothing were found yesterday by the helicopter that we retrieved. Come further down, this is where Mr. Kim was found.

UNIDENTIFIED MALE: Based on what the searchers were describing, the terrain they were working in, I would -- it seems superhuman to me that he was able to cover that amount of distance, given what he had and also given that he had been nine days in the car prior to leaving it.

UNIDENTIFIED MALE: My team left the road at drop point one. We hiked down into the canyon. It was extremely rugged, very steep terrain. It was very wet and slick, a lot of cliffs, poison oak. We hiked down to the creek, followed the creek for about an hour until we heard the news, and then we hiked back up to the road.

UNIDENTIFIED MALE: I can only describe him as an extremely motivated individual. I would hope that I could do the same thing in the face of my family needing my help. I would describe him as a true hero.

(END VIDEO CLIP)

GRACE: As you know by now, the body of James Kim, the 35-year-old father who set out in the snow, extremely rugged terrain, to save his wife and children, tonight is dead. After a massive search by volunteers and professionals, his body was spotted today by a helicopter.

Back out to Lt. Gregg Hastings with the Oregon State Police. Again, Lieutenant, thank you for being with us. Have you spoken to the person that actually spotted Kim?

HASTINGS: I haven`t spoken to the person that actually spotted him, but we`ve -- there have been several debriefings as the searchers return here, and those that were involved in it, I think it`s safe to say that it was obviously very disappointing and very moving. And this is someone that we felt was out there, and we were moving in one direction and we thought we were in the right direction, and we were trying to find him alive. And we didn`t. And that`s the most disappointing part of this.

The Kim family are tremendous individuals. We`ve spent time with them. We have liaisons that have been with them throughout this whole ordeal. We`ve come to know them very well, those that have been with them very closely. And it`s a real shock. And you know, our hearts and prayers definitely go out to them. And I know that that`s an often used statement, but it definitely is true.

GRACE: Out to Dr. Daniel Spitz, forensic pathologist. Dr. Spitz, thanks so much for being with us. Dr. Spitz, we know that he had been out in this freezing temperature, out in the snow fighting the elements, believing he was saving his wife and children. What would he have gone through? At the end, would he have been suffering pain, or would he be so fatigued and suffering from hypothermia that he would not know what was going on?

DR. DANIEL SPITZ, FORENSIC PATHOLOGIST: Well, you know, you would suffer from pain in the early stages of hypothermia. But toward the later stages, you become delirious. You become delusional. And really, pain is not the primary sensation at that point. It was more early on within the earliest stages of hypothermia that you experience the pain.

GRACE: What do you mean by pain? What would you suffer?

SPITZ: Well, it`s like all of us have experienced at one point when you`re cold, although magnify that many times. You know, you begin to have extreme pain all over the body as a result of being cold. And it`s only as your body temperature begins to fall that you have lack of oxygen to the brain, where you become delirious, and then no longer experience that pain, but body functions change, and ultimately, death occurs.

GRACE: What is paradoxical shedding?

SPITZ: Well, what that is, is that some people who are in stages of hypothermia will actually begin to take off clothing. And it`s paradoxical because it makes no sense as to why somebody who`s becoming hypothermic might actually remove clothing. But that is something that people do toward the ends of their life oftentimes.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: At 12:03 hours today, the body of James Kim was located down in the Big Windy Creek...

UNIDENTIFIED MALE: Mr. Kim was located down in the area where the search activity was occurring. Arrangements are being made to have him removed from the area to an undisclosed location.

UNIDENTIFIED MALE: It`s always important, number one, to know exactly where you`re going, know the weather conditions, to actually prepare, always let somebody know where you`re going, have adequate food, clothing in the vehicle in case something should happen. And the best thing is, is if you`re not sure of your route and you are not sure of the weather conditions, don`t chance it.

(END VIDEO CLIP)

GRACE: After being trapped in their car in the Pacific Northwest wilderness, surrounded by snow, living off snow that had melted, berries they could forage, the father sets out to save his family, wandering in the snow five days. Today, he is discovered dead.

Out to Mike Brooks. Mike, what is the very latest?

MIKE BROOKS, FORMER D.C. POLICE, SERVED ON FBI TERRORISM TASK FORCE: Well, Nancy, they also found a note in the car where his wife and two children were found nearby. Apparently, they had left the car also when they were found. As you recall, the helicopters did find her. She had opened up an umbrella to signal the helicopters. But they had already left the car and had left a note in the car, Nancy, on where they were going to be going and what direction they were heading.

There was also an SOS found along that road. They don`t know if it was left there by Mr. Kim or if it was done there by his wife.

They`re going to perform an autopsy tonight. The cause and manner of death, which could be hypothermia, it could be trauma because of the fall over the cliff -- they will release that sometime tomorrow, they say.

Also, it`s very unfortunate he was only found, after going eight miles, only about a half mile from the car. So it looks like he backtracked, didn`t know exactly where he was going, probably got disoriented a little bit because of the conditions because, if you recall, all he had on was a jacket, a winter jacket, tennis shoes. He did have on snowshoes but also jeans. So he really didn`t have any winter gear. And they say that he was a true hero, and they were very surprised that he survived as long as he did, and got eight miles, Nancy.

GRACE: You know, Mike, I just keep thinking about him. In his mind, he thought he was saving his family, his wife and two children back in the car. And with each step, it must have been incredibly painful to take step after step, suffering from freezing, hypothermia. Five days out in the snow this guy lived trying to save his family.

And one thing that I can`t quite understand is they were gone now 12 days. And I`m not quite sure how the search unfolded. Explain that, Mike.

BROOKS: Well, apparently when they did find her, they said that she basically told them where he set out and what road he was on. So they got two very experienced trackers to go ahead and try to follow behind him. They had a coordinated air and ground search. Nancy, they even had a swift water rescue team in the water down below the gorge, looking for him there. They went all out.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think you would find that anyone you interviewed would say that James was an incredibly kind and caring person. He will be missed on a personal level, most importantly, but obviously, on a professional level, as well.

(END VIDEO CLIP)

GRACE: Imagine suffering pain with every step you take through blinding snow, trying to save your wife and two children trapped in a car miles away. That`s exactly what 35-year-old James Kim endured, his body found today by a rescue team.

How do you survive, suffering from hypothermia, fighting the elements? Joining us right now, Cheryl Perlitz, life change and survival expert. What should he have done?

CHERYL PERLITZ, SURVIVAL EXPERT, AUTHOR, "SOARING THROUGH SETBACKS": I think, actually, James did a lot of the right things. He had signaling devices. They had a plan. I think what happened, actually, is that he made the mistake probably that any expert or experienced woodsman makes, and that is to take a little bit of risk. People who are not as experienced are not as likely to take those.

But there are a lot of survival techniques that you can use to help you in this situation. When you think about all the people that get caught in cars when they`re least expecting it during a snowstorm -- expect always the unexpected. You never know what`s going to happen next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: At 12:03 hours today, the body of James Kim was located down in the Big Windy Creek.

UNIDENTIFIED MALE: Mr. Kim was located down in the area where the search activity was occurring. Arrangements are being made to have him removed from the area to an undisclosed location.

(END VIDEO CLIP)

GRACE: What went wrong? A 35-year-old man trying his best to save his wife and children set out on his own through the Pacific Northwest wilderness, through icy temperatures and blinding snow. He survived five days outside the family car. Could he have survived longer? And where did it all go wrong?

Searchers overhead desperately trying to save his life, they discovered his body today as they flew over by helicopter. Out to Bryan Prawitz, the news director with KQEN Radio.

Welcome. Thank you for being with us, Bryan. Describe the terrain.

BRIAN PRAWITZ, NEWS DIRECTOR, KQEN RADIO: Very steep, very rugged. Even more steep and rugged than you probably imagine. I drove the road today trying to get a sense of what the Kims were thinking as they tried to find their way through, and we`re talking 4,000- and 5,000-foot elevations, very steep grades going up, very slippery.

Now it`s packed ice. It was even difficult to get up today, needed four-wheel drive to get up some places, absolutely remote. Gorgeous, beautiful country, but also very, very dangerous.

GRACE: What do you think went wrong, Bryan?

PRAWITZ: Well, I think that, from the reports, they missed the first very obvious way to get to the coast, Highway 42 out of Roseburg. Then, as they went further south, they`re looking for a route to the coast and tried to go over through Merland (ph) over to Gold Beach, and they wound up on not a very well improved basic one-lane logging road, probably thinking it was going to hook over to the original one that they meant to take.

GRACE: Right. Out to the lines. Shannon in California, hi, Shannon.

CALLER: Hi, Nancy. Thanks for taking my call.

GRACE: Yes, ma`am.

CALLER: My daughter and I love your show, and we wanted to say that our thoughts and prayers go out to the Kim family. In the past couple of weeks, I`ve heard numerous stories of people getting lost on the same dead- end road. Is there any explanation as to why the county hasn`t put up a dead-end sign or "not a through street" sign on this road? Because this happens all of the time, especially like to people that R.V.

GRACE: You know, excellent idea. And I was just listening to Thelma Gutierrez earlier describe this other family who had gone through a similar plight as James Kim`s. What about it -- to Brian Prawitz -- what about this road?

PRAWITZ: That was something the locals talked about. They were frustrated that the veer -- there`s a split in the road that the Kims took to the right. It appears it`s the main road, but it`s not. The local people said that`s an 18-mile-long twisting dead-end.

So even if the Kims had not gotten stuck or continued forward, they wouldn`t have come out on the other side. But it sounds like they were just kind of looking for a place to back up. Locals wish that the Bureau of Land Management would have a more clear sign there, with an arrow pointing to the coast that way, instead of to the right, where the Kims went.

And they say, in the winter and the summer, there are people who get stuck. In the summertime, you just run out of gas. In the wintertime, it gets a lot worse.

GRACE: Let`s unchain the lawyers. Joining us tonight of the Atlanta jurisdiction, Renee Rockwell, out of California, Michael Cardoza joining us out of San Francisco. Michael, is this a lawsuit?

MICHAEL CARDOZA, DEFENSE ATTORNEY: I don`t think so, Nancy. If she came into my office, Mrs. Kim, and wanted to sue anybody, she would first of all have to be very angry at someone. If she were angry, we`d talk about that, because if we did do a lawsuit, it`s not going to bring Mr. Kim back. That`s number one. And you know the emotion of a lawsuit.

GRACE: Well, Michael, that goes without saying, that it`s not going to bring Mr. Kim back. But if this...

CARDOZA: Well, I understand that, but...

GRACE: ... by far not the first person to rely on a public road sign and end up like they have ended up.

CARDOZA: Nancy, I understand all that. But a lot of people get very angry, and they find some lawyer that will bring a lawsuit. So who do you sue in this case?

Do you go after the mapmaker because the map they were following didn`t designate properly this particular road? Was it in red? Was it not in red? Would they have recognized that? Should the county or the city have put a chain link across the road, said, "Don`t go this way during the winter"? There are all sorts of people that we could look to.

Would it be a successful lawsuit? No. And I think that, if she went down that road, it would be a horrible, horrible mistake.

GRACE: I don`t know what the success would be, either. Renee Rockwell, in the Pacific Northwest, I know for sure up in the Rocky Mountains, the higher you go, the more difficult it is to stay on the road. And my experience has been, when hiking -- hey, Michael. Guess what? I can see you.

CARDOZA: You can? OK. I was getting feedback.

GRACE: I liked it. I wish now I hadn`t told you.

CARDOZA: I was pointing here because I was getting feedback on my earpiece, so...

GRACE: I wish I hadn`t told you. I liked it.

CARDOZA: I can hear myself talking. Yes, that`s good, that`s good.

(LAUGHTER)

GRACE: Renee, what I was saying was that the road is marked to protect the hiker or, in my case, at that point, the driver, so you don`t go off the road. You can`t see the road from the snow. And it`s amazing to me that this has happened on several occasions. Now, it`s turned deadly. I don`t know that I agree with Cardoza that there is no legal cause of action.

RENEE ROCKWELL, DEFENSE ATTORNEY: No, I will disagree, because, Nancy, you know better than anybody, people can file lawsuits for any reason whatsoever. And, unfortunately, it takes either a death...

CARDOZA: Doesn`t make it right.

ROCKWELL: ... or a lawsuit -- no, it doesn`t make it right, but people have their day in the court -- either a death or a lawsuit to make people change. One sign, one bar across the road that says, "Do not go this way." Listening to Thelma, she was saying all the right roads -- all the right words, that there was another family that got stuck and these people felt...

(CROSSTALK)

GRACE: And everybody knew it.

ROCKWELL: ... in a trap. So, I mean, I would imagine that there might be a lawyer that will take this case.

GRACE: Well, I`m not so sure that I agree with either one of you that it would definitely not be successful. I`m sure that Mrs. Kim doesn`t have her mind on that tonight. As we know right now, an autopsy is going to be performed on her husband.

Out to Brenda in Oklahoma. Hi, Brenda.

CALLER: Hello, Ms. Grace. Thank you for taking my call.

GRACE: Thank you for calling.

CALLER: My main question is, of course, being a mother, how are the mother and the children doing?

GRACE: Out to Mike Brooks. He`s been on the case from the very, very beginning. You know, Mike, I was asking Andrea Macari, the shrink with us tonight, the psychologist, you know the mom was probably saying, "Don`t go. Don`t go. Stay with us," or else telling him, "OK, go try your luck." She`s probably torn up so badly tonight that she didn`t beg him to stay.

BROOKS: You`re probably right, Nancy. And it sounds like that they probably had some kind of plan, because they found her -- as I said earlier -- they found her a short distance away from the car. So maybe there was a plan that, if he didn`t come back within a certain amount of time, that they would also head out.

Because, you know, as I said, they found her and the girls -- they found the children a short distance away. And when the helicopter came over, they opened up the umbrella to signal the helicopter. And that`s the only way they found them in that thick canopy of woods.

GRACE: To Pat Lalama, investigative reporter also covering the story, what do you know about Kim`s family tonight, Pat?

PAT LALAMA, INVESTIGATIVE JOURNALIST: Well, we know that, first of all, that the body is being taken to a state police crime lab, of course. And there we`ll find out as much as we can about exactly how he died.

We know that the family, the mother and her two children, are in seclusion. Her mother, Kati`s mom, has done a lot of the speaking for the family. You know, what I find remarkable, Nancy, is the survival tactics, how strong this woman and her two children must be.

I was just in Chicago this weekend, similar temperatures with all the right clothing, and I was miserable after about 20 minutes. I can`t imagine -- she breastfed her 4-year-old daughter to feed her child, because she had been breastfeeding the 7-month-old child, feeding them berries. I mean, they were just marvelous.

GRACE: Out to Kalani in Hawaii. Kalani? Florida.

CALLER: Hi, Nancy, how are you doing?

GRACE: Hi, dear.

CALLER: I just want to know, you know, there`s murderers, all type of people out in the world, and they take, and there are people that they`re murdering, and they take them to these remote areas. Why are there not any type of cell phone towers at all in these areas that can be able to, when you call, they know where you`re at, instead of only putting them in the big cities?

I don`t care if you`re with Cingular, AT&T, whatever; they need to put some type of cellular towers in places that are remote, because things like this -- this is not the first time this happened, Ms. Grace, you know?

GRACE: You know what? You`re absolutely right, Kalani in Florida.

And out to you, Renee Rockwell. While telephone companies are not necessarily always public -- they`re not all public -- they are all regarded as a public service. I don`t know that she`s that far off the mark.

ROCKWELL: No, and, you know, I was talking to Mike about it. It is all about the dollar. But, interestingly enough, that is how they went to that particular spot. They triangulated the last ping and found where they needed to start that search. And miraculously, they were at least able to recover the mother and the two girls.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Insurance carriers are literally hemorrhaging millions and millions of dollars, monies in unparalleled dimensions because of fraudulent insurance schemes.

UNIDENTIFIED MALE: Some people think that insurance fraud is a victimless crime. Speaking on behalf of the industry, it is not.

(END VIDEO CLIP)

GRACE: I am sick over this story! A mother-and-son duo facing jail time. They`re accused of raking in over six figures, we believe, for 20 years, faking this little boy`s illness. Yes, it all started when he was around 8 years old. He`s in his 20s. They have been getting money, money, money, pretending this guy is, quote, "mentally retarded." This mom telling authorities he had the mind of a toddler. Wait until you hear the rest of the story.

Out to Gene Johnson with the Associated Press, welcome, Gene. Go ahead.

GENE JOHNSON, REPORTER, ASSOCIATED PRESS: Hi, Nancy.

GRACE: Hit me.

JOHNSON: Well, basically, prosecutors say, just as you said, that ever since he was about 8 years old, this mother, Rosie Costello, has been coaching her son to feign that he was mentally retarded and that he used this to go in and convince the Social Security officers to pay.

GRACE: How much money are we talking about, that we know of, between him and his fake little sister?

JOHNSON: It looks like about $222,000 over about 20 years.

GRACE: And that`s all that we know about. Hey, I don`t know if you`ve got a monitor, Gene -- Gene is with us from the A.P., Associated Press. Here`s this guy. He goes to court. Do we have sound to this, Elizabeth? He goes to court to fight a traffic ticket, and he defends himself like a lawyer in open court. He didn`t know that there was a camera in the courtroom.

There`s the judge. He`s like F. Lee Bailey. He`s Johnny Cochran arguing this ticket. There he is. He`s just giving them you know what in court. Then he`s telling the government, to the tune of hundreds of thousands of dollars, that he has the mind of a toddler. Take a listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I didn`t have the insurance, but I wanted (INAUDIBLE) and a copy of it. So they gave me a copy of it. And the reason why I didn`t have the car transferred is because I wasn`t going to keep it that long, and then I lost the title. And now I`ve got to (INAUDIBLE)

(END VIDEO CLIP)

GRACE: Liz, when you can, show me the video of how he was behaving when he was meeting with the government counselor, convincing the counselor he couldn`t speak, he couldn`t bathe himself, he couldn`t feed himself. The mother says she`s got to drive him around.

There he is kind of cowering back there in the corner. And throughout it, he refuses to speak, respond to orders. He just kind of picks at his face throughout the entire proceeding.

Out to Pat Lalama, investigative reporter, who, along with Gene Johnson, has been studying the case. What can you tell me, Pat?

LALAMA: Well, you know, what`s interesting about this -- I mean, I got to tell you, you people out there think you`ve got like mama control problems? I`d say this takes the cake.

And, by the way, this guy has a job in a body shop and lives with his girlfriend and her two kids. I`d love to be a fly on the wall in that house.

But apparently, the prosecutors -- and, by the way, they`ve charged them with two counts of fraud, one for conspiracy to defraud. The other one is to defraud the Social Security Department. Now, they can prove -- they say through the two videotapes -- they can prove the last 10 years. They know that for a fact, but they think they got all that money 10 years before.

And, as you mentioned, there is a sister somewhere that the feds can`t even find, and they think the mother did the same thing with her, but they`re not even sure she is related. Go figure.

GRACE: And if you take a look at the list running behind me, it`s just so easy to steal taxpayers` money. Take a look at this list: Munchausen`s syndrome; conversion disorder; psychiatric disorder; carpal tunnel; tennis elbow, tendonitis; chronic pain syndrome; whiplash; neck injury; migraine; lower back; rotator cuff.

There are how to fake these and hundreds of illnesses. These are the ones I found today. It took me about 12 minutes online to find this whole list you`re seeing running behind me.

To Gene Johnson with the A.P., Gene, to fake this illness, this, as they say, mental retardation, mentally handicap for 20 years, did this kid, was he required to stay out of school? Did it he even go to school?

JOHNSON: Prosecutors haven`t said to what extent he went to school. Basically, he just had to keep going back for these periodic visits to the Social Security office so that they could kind of take a look and see if there had been any change in his condition that would affect his benefits. And according to the prosecutors, he just kept on with the act.

GRACE: Well, Gene, I wouldn`t be surprised if he hadn`t gone to night law school to hear him argue in court to try to beat a traffic ticket. The only good thing coming out of this is the traffic ticket has been deferred.

Back out to you, Pat Lalama. How many aliases and residences did this con team have?

LALAMA: Well, there were numbers of them, and that`s how they were able to get by the government this long. I mean, next time, if I get audited, I`m going to say, "Hey, go worry about these kinds of people." But apparently they would just change a middle name, change a first name. That`s how they were able to do it.

GRACE: Let`s unleash the lawyers. Joining us, Renee Rockwell, Michael Cardoza. Michael, the reality is the prosecutors are seeking 10 years. Even if they got 10-years sentence, how much time would they do?

CARDOZA: Well, federal, you do 85 percent of that time, but I can tell you what happens in cases like this. I`ve defended them. The government`s between a rock and hard place, because they wan the defendant and all defendants to return that money. So if you put them in jail, they`re not going to be able to return that money.

So you can, as a defense attorney, if the defendants come in with money, if they have access to the money and they can use that to plea bargain, oftentimes the government will say, "You know, pay that money back, and we`ll lighten that jail time." So, as I say, do you give them jail and obviate the chance to get the money back or what do you do?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There`s a lot of medical evidence in this case as to how he is affected by whatever impairments he might have. And it`s just not consistent with what the government has seen when surveilling him.

It`s an aggravating factor in a case like this whenever somebody`s using a minor to commit a crime; it`s something that`s taken into consideration at sentencing.

(END VIDEO CLIP)

GRACE: Faking a mental illness, a retardation as they called it, mental retardation for 20 years, starting when this kid was 8 years old. To Andrea Macari, clinical psychologist, what do they mean exactly -- what`s the definition as they are saying mental retardation?

MACARI: Mental retardation is when a person has an I.Q. below 70 but also has impairment of functioning. In other words, they cannot complete daily activities of life, like bathing themselves, or they have impaired social relationships or they can`t communicate.

Nancy, I`m so angry over this case, because I really see my role on your show as being an advocate for the mentally ill, to defend their rights, but lately, I`m constantly being asked to comment on dirt bags like the Costellos who use and abuse the mental health system for their own gain.

I have to tell you: I`m sick about it. It`s an insult to me; it`s an insult to the millions of American who`s suffer from mental illness every day.

GRACE: Listen, listen, I`m very, very distraught, having a handicapped family member, and what all we have lived through, the anguish we have lived through, and to see this, to see the system ripped off.

Before I say goodnight, I just wanted to say a special welcome back to Michael Cardoza after the loss of his father. It means so much to us that you are back with us, friend.

CARDOZA: Thank you, Nancy. That`s awfully nice of you. Thank you.

GRACE: Let`s take a break from all our legal analysis to remember Marine Private Heath Warner. He was just 19, Canton, Ohio, killed, Iraq. He enlisted the senior year of high school. He wanted to join the Marines since he was 5 years old. This guy loved break-dancing, martial arts, and learning foreign languages. He leaves behind grieving parents and two younger brothers, 14-year-old Chandler, 7-year-old Ashton. Heath Warner, just a baby himself, American hero.

Thank you to our guests. Our biggest thank you, to you, for being with us. NANCY GRACE signing off. See you tomorrow night, 8:00 sharp Eastern. And until then, good night, friend.

END