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Space Debris Forces Emergency Evacuation of Space Station; Madoff Heads to Manhattan Corrections; Third Straight Day With Stock Market Rally; Geithner Defends Budget Priorities; S.C. Governor Says "No Thanks" to $700M in Stimulus Cash; Banks Giving Back Federal Funds

Aired March 12, 2009 - 14:00   ET

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

DON LEMON, CNN ANCHOR: Well, he's had thousands of victims -- rich, poor, everyone in between. We're not talking about a serial killer, we're talking here about a serial swindler. Now Bernie Madoff will swap his penthouse for the big house.

Is that the only one out there, con artists on the make, out to get you? Avoid getting scammed. We'll tell you how. We're pushing forward here.

Hello, everyone. I'm Don Lemon live here at the CNN World Headquarters in Atlanta. You are in the CNN NEWSROOM.

We begin this hour of the CNN NEWSROOM with a close call high above the Earth. Let's go straight to CNN's John Zarrella in our Miami bureau to tell us what happened at the International Space Station.

What did you find out, John?

JOHN ZARRELLA, CNN CORRESPONDENT: Don, certainly some scary moments about an hour and a half ago. What happened is this. Space command last night detected a piece of debris from an old motor, literally a motor that would be used to put satellites into orbit, and a tiny piece of debris, literally a third of an inch. So if we look at this ruler, would have been about that big in width, was approaching the International Space Station. They didn't spot it until last night. So there wasn't enough time to do what they call a debris avoidance maneuver.

So instead of doing that, they had the three, the two astronauts and the one cosmonaut onboard the International Space Station, they had them get into the Soyuz Rocket, the escape vehicle that is permanently attached to the space station. They sat in there for about ten minutes. Again, about an hour and a half ago or so, while they waited for this piece of debris to either impact, or to pass by.

Now, in space terms, it was close. They had what's called a condition red. It came within 2.8 miles of the space station. Again, that's very, very close. And it was traveling at nearly 20,000 miles an hour; 5.5 miles per second. Orbital velocity is 17,300 to 17,500 miles an hour. So it was moving very, very fast. And they had to get that crew into the International Space Station. But again, all clear. It's passed by them. Everything is OK. The astronauts, the crew, back inside the International Space Station, Don.

LEMON: That is good news. John Zarrella in Miami.

Thank you, John.

Jail today, prison tomorrow. Not literally tomorrow, but June 16th, that's the day Bernie Madoff is sentenced in federal court for two decades of fraud, greed, and lies; a pyramid scheme that fleeced thousands of clients out of untold billions of dollars. Many of those victims are outraged that there won't be a trial, because they want to hear about it.

But there wasn't a deal either in all of this. Madoff pleaded guilty to everything the feds threw at him. That would be 11 felony counts ranging from fraud to money laundering to perjury. His clients numbered 4,800. And prosecutors estimate $170 billion flowed through his various accounts over the years. No one expects anything near that amount will ever be recovered from all of this. Very sad.

Let's go to Allan Chernoff outside the Manhattan courthouse where Mr. Madoff was this morning.

You've been talking to some victims. I want to know what happens next with Bernie Madoff, Allan?

ALLAN CHERNOFF, CNN SENIOR NATIONAL CORRESPONDENT: Well, Bernie Madoff did not have to travel far. Bernie Madoff, right now, is in the Manhattan Correctional Center, that's only a block away from where we're standing. Indeed, he was able to go there underground. It's connected to the courthouse where Madoff stood early this morning.

And so now Madoff being processed, and he is a prisoner of the system here in New York, the federal system. And he awaits sentencing. His sentencing set for June 16th. As you've said, his maximum sentence in prison could be as much as 150 years for running the Ponzi scheme.

LEMON: My goodness. So, he's going to be there, metropolitan, right downtown Manhattan. No place he's going to be holding much more serious than that. He'll be there for awhile?

CHERNOFF: Absolutely. And, you know, in court, the victims at least did express some satisfaction when the judge said he was remanding Madoff to jail. Applause burst out in the courtroom. The judge had to quiet down the victims. So, they have at least some satisfaction there. As you mentioned, some of the victims said that they would prefer to see a trial, to learn all the details.

LEMON: To learn exactly how this happened, they're saying, because they want to maybe just this information that comes out of Bernie Madoff, can keep it from happening to other people.

I want to talk to you real quickly about the property in Manhattan, the property in Florida, and other investments, or other assets that Bernie Madoff might have. What's going to happen with those? Is it clear now, is it clear yet, Allan?

CHERNOFF: The federal government, the prosecutors, the investigators here, they are going after that. They are trying to unravel this long, long trail. Let's keep in mind the way this all transpired is that the big fish, Bernard Madoff, handed himself in. The way these things usually happen is that the government gets a whiff of something and they work their way up to the big fish. So they are working feverishly to try to find out where the money is, if there is much money remaining.

(CROSSTALK)

LEMON: And if anyone else is involved, maybe family members. We're hearing about that as well, Allan?

CHERNOFF: That is certainly a possibility. Bernard Madoff's wife, Ruth, was involved in the business. His two sons were running the trading business, which Madoff claimed was an entirely legitimate business.

LEMON: So we shall see if any other family members were involved, still to be determined.

Allan Chernoff, we appreciate it.

No tar and feathers, but plenty of wiped-out investors came out for Bernie Madoff's mea culpas. Well, one man, one man who lost $3 million, fears the whole story never will be known.

(BEGIN VIDEO CLIP)

RICHARD FRIEDMAN, MADOFF VICTIM: If Madoff acted alone, and people believe him, then those people are being scammed by Madoff today. There is no way in the world he could have acted alone. His operations were just too immense, too many statements had to be sent out. He could not go through "The Wall Street Journal" every day and pick out stock prices that fit into his statements. There had to have been plenty of other people.

(END VIDEO CLIP)

LEMON: That's a great question. There have got to be plenty of other people. It brings us to CNN's Senior Legal Analyst, Mr. Jeffrey Toobin.

Jeff, the investigation goes on, right? Who are the feds still looking at? Is Bernie Madoff the only one, or are they looking at someone else?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Certainly they're going to look at the other people who were leading the two companies that Madoff ran. Now, he said in his guilty plea today that the one company that's run by his two sons, and by his brother, is totally legitimate. Maybe so, but maybe not. I mean, that is an area that the feds are certainly going to be looking at, whether there was intermingling between the two companies, and whether other people in management knew that the investment fund was a complete fraud.

LEMON: Jeffrey, it would seem, though, and I'm just saying this, that if you're an officer in a company, if you're an accountant who works on the company's books, that somewhere in all of that there must have been some signs or clues; because these people are not just figureheads. A lot of these people worked on in-depth projects with Madoff's companies.

TOOBIN: And this wasn't just, you know, a few bad numbers in the books. This company was a complete fraud.

LEMON: Right.

TOOBIN: Every statement sent out was complete fiction. As he said, all he did was deposit investors' money in Chase Manhattan Bank and then send out redemptions from Chase Manhattan Bank. By the way, certainly the feds are going to want to ask the question, what did Chase Manhattan Bank know about this? They had this enormous bank account with all this money going in and out of it, might they have suspected something was going on here?

LEMON: And didn't they check it? Why doesn't anyone check into it? Why aren't there any certain precautions or things that -- steps you have to go through in order to prove your business and what you're doing is correct?

Here's what I think most people want to know about this. Because we heard that Bernie Madoff does have some assets still in his name. Not nearly enough to pay everyone back, but what about the victims? Are they ever going to see any money?

TOOBIN: They will probably see some money, but not much. I mean, the golden rule when it comes to fraud cases, small ones, or big ones, is that the money is mostly gone. You can't find it. This is a $50 billion Ponzi scheme. But I am certain there is not a $50 billion Swiss bank account out there. Most of the money is simply gone. If the investors get a few cents back on the dollar, they should count themselves as fortunate.

LEMON: You know, Jeffrey, I've got to run, but I think what's interesting is all the other Ponzi schemes uncovered after Bernie Madoff, or during this time, because people started looking into it, I went to dinner with a couple two nights ago, part of a Ponzi scheme, lost $190,000. Uncovered, after Madoff.

TOOBIN: It's no coincidence this all comes out when economic times are hard. Because it's in bad times that people are trying to get their money out of investments. That's when they start to redeem their investments. And if it turns out to be a fraud, that's when we learn about it. So they collect, you know, Ponzi schemes collect money in good times, but they tend to collapse in bad times.

LEMON: House of cards. Senior Legal Analyst Jeffrey Toobin.

Appreciate it, Jeffrey.

TOOBIN: So long, Don.

LEMON: They want your money, especially now in these tough times. And they'll stop at just about nothing to try to get it. How you can protect yourself from scam artists. We've got a list of red flags to look for, for you.

Also, tough talk from the president to the states, here. Serious advice about what to do with the stimulus money now headed their way.

(COMMERCIAL BREAK)

LEMON: All right. Some breaking news into the CNN NEWSROOM. And it involves a missile strike in Pakistan, believed to possibly be caused by the U.S.

We're going to get you to the ground now and CNN Producer Zein Basravi joins us now from Karachi.

What are you hearing about this, Zein?

ZEIN BASRAVI, CNN PRODUCER: Well, Don, we're hearing from intelligence sources that at least four missiles from a suspected U.S. drone have struck what is suspected militant target in the Kurram Agency (ph), a region of Pakistan's tribal areas on the border with Afghanistan. A local political official in Kurram Agency, is telling us that at least 11 people have been killed in the strike, and six are believed to be injured. The death toll is expected to rise as high as 25. But that death toll is unconfirmed at this time.

What we've seen in the past, 2008, as many as approximately 30 strikes of this nature. The Pakistan military and government continuing to say these are unhelpful and do not help them in the fight against the Taliban, and against the militancy in Pakistan. But with the federal government and the provincial government negotiating with Taliban militants in parts of the country, this policy that the United States of drone strikes in the Pakistani area is expected to continue since the United States is criticizing the negotiations of the provincial and federal governments in Pakistan with the militants and the Taliban.

LEMON: Part of the operations that have been happening over there. This is supposedly an unmanned drone, unmanned plane that killed up to seven people in northwestern Pakistan. Joining us on the phone is Zein Basravi; he's a CNN producer. He's in Karachi. He'll keep us updated on any new information we get on this and we'll bring it to you right here in the CNN NEWSROOM.

Thank you, Zein.

Meantime, the FBI has made two arrests after agents searched the office of Washington, D.C.'s chief technology officer. An FBI spokeswoman says the search is part of an ongoing investigation, but she didn't reveal what it's about. One week ago President Barack Obama named a former head of the office, Vivek Kundra as his administration's chief information officer. A law enforcement source tells CNN that Kundra is not involved in this case. We'll update you.

President Barack Obama and Vice President Joe Biden have some advice for states getting billions of dollars in the government's massive stimulus package. Don't blow it, that's the advice. Both men had some stern warnings for group state officials today at the White House. Mr. Obama said if his administration sees states misspend the money, then his words, "We're going to put a stop to it."

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We're going to have to make sure that every single dollar is well spent. We've got to go above and beyond what I think is the typical ways of doing business, in order to make sure that the American people get the help that they need. And that our economy gets the boost that it needs.

(END VIDEO CLIP)

LEMON: The vice president was equally blunt, warning state leaders to remember that the stimulus plan is, quote, "not your usual federal grant."

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: We don't get this right, folks, this is the end of the opportunity to convince the Congress that anything should go to the states. Your state legislatures are struggling, your governors are struggling, members of the house and senate are struggling. They don't want to take up one another's burden.

(END VIDEO CLIP)

LEMON: Health care reform, of course, is a major piece of the president's economic agenda. The first regional White House forum on health care is getting underway this hour in Dearborn, Michigan. Several more are planned around the country. And you can watch today's reform at www.healthreform.gov. On the bottom right-hand side of your computer, it says watch the forum at 2:00 p.m. EDT. Press on that, the video will come up for you. Also, the link, CNN.com, check it out. We'll get all the information you need.

All the talk about healthcare reform comes as a new study, by a business group, finds Americans aren't getting much value for their health care dollars. The Business Roundtable reports Americans spend $2.4 trillion, trillion, a year on health care. That's about 2.5 times more per person than any other advanced country. Based on what it calls a value scale, the report concludes that the U.S. trails Canada, Japan, Germany, the UK, and France in overall health care value.

Pushing forward. Your money and the president's economic plans. We'll go live to Capitol Hill to find out how the states plan to spend those billions in stimulus dollars and what it could mean to you.

Also, her husband set a hectic pace. But First Lady Michelle Obama seems to be keeping up right with him. She's been everywhere, from soup kitchens to the cover of "Vogue" recently. More from our White House Correspondent Suzanne Malveaux now.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice over): Inauguration night, Michelle Obama makes her debut. And she hasn't stopped

MICHELLE OBAMA, FIRST LADY: Do you see who is up here with me?

MALVEAUX: In her seven weeks as First Lady, she captured the nation's attention like no other.

NIA HENDERSON, POLITICO.COM: Well Michelle Obama is out of the gate much faster and more focused than most of the first ladies we've seen over the last couple of years. Laura Bush by her own admission had a real kind of late start. Hillary Clinton had been traveling in early March and meeting with folks on the Hill over health care.

MALVEAUX: Gracing the covers of "Vogue," "People," "US Weekly" and "Essence," even Oprah is moving over to make room for Michelle. It's hard to believe nine months ago, the New Yorker satired her as a radical. This month she is sashaying down the catwalk.

M. OBAMA: You're all invited.

MALVEAUX: Once dogged about questions about patriotism, Michelle Obama has fully embraced it. A major part of her portfolio is supporting families of the troops and today all eyes are on her visit to Ft. Bragg. In D.C., the First Lady hit the ground running, visiting federal workers. She also made surprise appearances going out for lunch and visiting soup kitchens and schools.

M. OBAMA: A place where they make candy and chocolate!

MALVEAUX: But before she even became first lady, she told me her first priority was clear.

M. OBAMA: I like order. And I thrive in stability. And I find that my kids thrive in the same regards.

MALVEAUX: Mommy in chief to her daughters, Sasha and Malia.

(END VIDEOTAPE)

MALVEAUX: And, Don, they try to keep things as normal as possible for their daughters. They go to the parent/teacher conferences. They still read to them at bedtime. Obviously her trip to Fort Bragg, that is in complement with her husband's agenda.

LEMON: I like the way you put that, Mommy in Chief. That's a pretty good way of putting it. Now, the first lady is today visiting Fort Bragg. Is this part of her push to talk to military families?

MALVEAUX: Absolutely, Don. This is something that is very high profile. She's talked to military families before, but obviously Fort Bragg, a major military installation. A lot of people who have suffered over in Iraq, and who are also going to Afghanistan. And she's going to complement what her husband has been talking about. That is, mental health, how important that is, pay, better pay for the troops, and really taking care of those families. That's something that is at the top of her agenda now, Don.

LEMON: Very interesting to see her, yesterday, with the former first lady, now secretary of State. That's an interesting pair to see together.

Thank you very much for that, Suzanne. We appreciate it, at the White House.

MALVEAUX: Thanks, Don.

LEMON: Job sites tailored for black and Hispanic workers hit extra hard by unemployment? There are Web sites tailored to everyone. We'll talk to you about those. But especially for African-Americans and Hispanics, we'll give you some advice here. Because they're hit harder. Log on with us in just a sec.

(COMMERCIAL BREAK)

LEMON: Let's take you to Canada's Atlantic Coast, this hour, where a frantic search and rescue operation is going on. A helicopter with 18 people onboard went down in frigid, windy conditions off Newfoundland. Now, at last word, here's what we're being told. One survivor had been found and rushed to a hospital in St. John's Newfoundland.

The chopper was ferrying workers to an offshore oil platform when it made what is described as a controlled emergency crash landing. The area is about 56 miles southeast of St. John's.

CNN's Jacqui Jeras can tell us all about the area where the helicopter went down. We're both here in the CNN Severe Weather Center.

So, were there bad conditions, windy conditions?

JACQUI JERAS, AMS METEOROLOGIST: There were. Probably we don't think that weather necessarily contributed to it, but it has everything to do with the survival kind of conditions.

So check out this map behind me. Those little triangles that you see on my map? Those are buoys. So they're basically weather observing sites that are out in the middle of the ocean. It gives us a much better idea of what's been going on near the site.

These guys took off from Halifax and on their way to an oil platform, which is out here off Newfoundland. They were located about 54 miles south and east of the St. John's area. This is the closest site we could find. There you see the water temperature, around 32 degrees. You cannot survive in 32-degree water for very long at all. However, there is a little bit of hope. Not only because they did find at least one survivor, several rafts were found out there as well. But they also had some equipment on board, some survival suits that can help you stay alive for about 24 hours out there. So we're hopeful that they had those suits on.

I understand there are also some signals being detected from some of those suits. Cross your fingers. We're going to continue to follow this breaking situation.

Now, another breaking story that's been going on today, we had a very close call that happened on the International Space Station today. The astronauts actually had to seek emergency refuge inside of an emergency hatch. Here's why. This is space debris that you're looking at out there. And a piece of space debris about this big, about a third of an inch was moving at the International Space Station at like, what was it, 20,000 miles per hour.

There is all kinds of spice debris out there. There you see some of it. There were two satellites that collided a month ago. And the white and red, these are the tracks of them. And the International Space Station came right within it. It was a close call. But everything turned out A-OK.

LEMON: I'm going to call you the universal meteorologist. You're like giving us a forecast from the universe, from space.

JERAS: We do more than just weather around here, Don.

LEMON: You certainly do. You summed it up. Good news about what happened in space. But boy, we certainly hope they find those guys in Newfoundland.

JERAS: Yes.

LEMON: Thank you very much, Jacqui.

Billions of dollars are on the way, but different states want to spend the stimulus money in different ways. Different strokes for different states, I guess you can call it. What will the spending package mean to you?

(COMMERCIAL BREAK)

LEMON: All right. Let's take a look now at what Wall Street is doing. You can see the Dow up 181 points. And then trading there at 7,112. At least there's good news, the Dow up at this moment. We'll see.

Wall Street is pushing its rally a third straight day. We'll check in, despite a surge in people losing their jobs and then also losing their homes, we'll have a full market report coming up on CNN.

Let's talk now about the foreclosure numbers. They are especially grim. Foreclosure filings are up 30 percent just from one year ago. Seventy-four thousand homes were lost to foreclosure in February. And during that month, in total, nearly 291,000 default notices, auction sale notices, and actual bank repossessions were reported. That's up about six percent from January.

Numbers like that have Freddie Mac reeling. The government- backed mortgage lending company is asking the government for nearly $31 billion in extra funding. Thirty-one billion in extra funding. Freddie says, it lost nearly $24 billion in the last three months of last year; its sixth straight quarterly loss. The company's been mostly backed by your tax dollars since the government took it over last September along with the even larger Fannie Mae.

You know, it is a tough time to be treasury secretary. Just ask Tim Geithner. He's taking some heat today from senators in both parties. Geithner's on the Hill to talk about the president's budget priorities, and insists calls for more spending and the higher deficits that will result are just temporary.

The committee's democratic chairman, Kent Conrad, calls those projected future deficits, "unsustainable." That is a quote.

Hundreds of billions of dollars heading some 50 different directions. It seems like every state has a slightly different idea for how to spend its share of the federal stimulus package. Let's bring in now Lisa Desjardins on Capitol Hill. She's with CNN radio.

And Lisa, I want to talk to you about this. How are the states handling their share of this stimulus right now?

LISA DESJARDINS, CNN RADIO: It really is an avalanche of money for these states. A lot of it going to transportation and education, health care. What a lot of these states are doing, Don, is they're appointing, you guessed it, a stimulus czar. Some 15 states so far have appointed stimulus high officials to oversee the money that they get.

Also, a lot of folks at home will want to know, there are websites all over the country that states are putting up so that people can see how much money their state is getting, where it's going. Some 32 states - as you can see there's one right there from Ohio - 32 states have those websites. If you want to find out, and I know you do, does Georgia have a website? They do. You can find it by going to recovery.gov. Go to the right side and look where it says, "state progress." They show all the state stimulus websites that are up there - Don.

LEMON: Interesting, a stimulus czar. I wonder who they're hiring, especially with a lot of cities and states laying people off. If they're going to keep someone, bring someone on staff or pay an extra salary.

DESJARDINS: That's right.

LEMON: Cause, you know what, they could save that money by hiring someone on staff. OK, so one governor actually, Lisa, very adamant about not accepting any federal money. Why don't you tell us who that governor is and why.

DESJARDINS: South Carolina's Mark Sanford. He's known for not liking to spend money. I covered him in South Carolina. I'll tell you, his staff was worried about dropping a paper clip. And he is saying he would - it's true. I knew staffers who were nervous about that.

LEMON: Thrifty? Are you saying they're very thrifty? Spendthrifts there?

DESJARDINS: He's a thrifty man. He does not like to spend taxpayer dollars. And he is saying he's refusing $700 million that his state would get unless he can use it to pay down long-term debt. The trick with the stimulus is, President Obama says it should all go to things now. There's a big fight in the South Carolina State House, and his own republican colleagues are going to try and vote around him. And they probably will get that money, but they'll have to override their own governor.

LEMON: OK, very interesting.

What else is Congress doing today, since you're there on the Hill? What do you know?

DESJARDINS: How about it? For all of you interested in water and sewage, a big clean water bill in the House just passing now. And you know, what do these guys do every day? I think it's important to keep tabs. But that's the only thing on the docket today.

LEMON: Hey, they are working. Lisa Desjardins, we appreciate it. Thank you very much for that.

There's a similar story, you know, when it comes to the banks as well. We talked to you about states. You may think that every bank in America is clamoring to spend those billions of dollars in bailout funds. But not so fast. After getting an infusion of your tax dollars, some banks are now deciding it's not such a good idea.

CNN's Carol Costello explains why.

CAROL COSTELLO, CNN CORRESPONDENT: Don, when of the bank bailout plan was approved back in October, banks across the country were required to take millions of dollars in taxpayer money so they wouldn't fail. A few weeks ago Congress decided to allow the banks to repay the money when they could raise sufficient private capital. And guess what? Turns out a lot of banks didn't even want the money in the first place.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): If you thought the banking industry was going completely belly-up, not so. A growing number of banks is telling Uncle Sam, "Take my TARP money, please." IBERIABANK Corp. is giving back nine $90.6 million. TCF Financial is returning a whopping $361.2 million. And Signature Bank will say bye-bye to $120 million in bailout funds. Analysts say, "What?"

LARRY SABATO, POLITICAL ANALYST, UVA: The average person in the street is going to wonder what was really up, because if they are giving the money back so quickly, did they really need it?

COSTELLO: Confused because last October, President Bush convinced the country America's banks needed taxpayers to fork over $700 billion so the government could buy up bad assets and unfreeze credits, and they need that money now.

GEORGE BUSH, FORMER PRESIDENT OF THE UNITED STATES: We're facing a choice between action and the real prospect of economic hardship for millions of Americans. For the financial security of every American, Congress must act.

COSTELLO: So while the infusion of cash helped keep many banks afloat, many of them now want to take their chances without government backing. In part, because they're concerned the government might change the rules, and also because of, um, public humiliation.

REP. BARNEY FRANK (D), MASSACHUSETTS: It's simply unacceptable for people to be holding federal taxpayer dollars and engage in this kind of maverick behavior.

COSTELLO: Northern Trust, the target of that zinger, for its sponsorship of a golf tournament, says it will repay its $1.57 billion in bailout money ASAP.

Financial institutions are also finding it difficult to make sound business decisions in partnership with the federal government.

JERRY ELLIG, ECONOMIST, GEORGE MASON UNIVERSITY: The past few months, a lot of banks have come to realize that when you have the federal government as a non-silent partner, every business decision becomes a political decision.

(END VIDEOTAPE)

COSTELLO: What does this all mean? Well, Jerry Ellig, the economist you just heard from, told me it could in fact be good news. That some of the banks every thinking, gee, we don't need the money, we can get along without it. We're stronger than we thought we were. And that just might signal a bit of a turn-around - Don.

LEMON: All right, Carol Costello, thank you very much.

It's about as far as you can get from a luxury penthouse and still be in Manhattan. The Metropolitan Correctional Center, that's what we're talking about. That's where Bernie Madoff is calling his new home now, but only for the next three months. After that, he is packed off to prison.

And you know if you've been watching CNN all day today, the one- time "Wizard of Wall Street" pleaded guilty today in federal court to running the biggest Ponzi scheme in history. He could get 150 years when he's sentenced on June 16th. His thousands of shattered clients will probably wind up with little, if nothing at all.

Allen Stafford - Stanford, I should say, is no Bernie Madoff. He is a Texas financier accused in a multibillion dollar fraud scheme. But Stanford is not admitting anything. Court papers filed in Dallas indicate he's pleading the fifth refusing to testify, refusing to give up documents the government wants. For now at least, this case is civil broad by the SEC. It is not criminal. We'll follow that for you.

In these tough times, a lot of scam artists are on the prowl and they're hoping to make you their next victim. So what do you need to be aware of, and how do you protect yourself? That's where we turn to our personal finance editor, Miss Gerri Willis. She joins us now from New York with the very latest.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's right.

LEMON: So, how do you protect yourself? Where do you turn to, Gerri?

WILLIS: Well, you know, look, the stimulus bill is stimulating crooks. That's according to the Better Business Bureau. Scam artists are using the headlines, the confusion about the new programs the government is putting together, the worry about the recession, to take your money. OK?

So take a look at this ad. I'll give you an example here. Promoting an easy grant solution kit, right? Has a picture of the president on it. This is actually a website. It claims it can get you thousands of dollars in government grants. Just send us your credit card number.

Hmm. You don't want to do this. This is a scam. This is a rip- off. You want to be careful here.

Let me show you another scam that's tripping people up as we get closer and closer to tax season this year. It's an e-mail that's even gone out to some of our staff here at CNN. Look at this fine print, "We've determined you're eligible to receive a tax refund." Guess what, "the refund value is $189.60."

It sounds so convincing. Why would they pick that number, right? But the reality is, guess what, the IRS never e-mails people. They do not e-mail taxpayers. They don't call you on the phone either. If you're in trouble with the IRS, you're going to know it. They're going to come to your front door. Your attorney, your tax accountant is going to call you and say, we're having a very big problem. It's not going to be a mystery. They're certainly not going to fill up your e-mail inbox.

LEMON: They will get in touch with you, just not by e-mail.

And you know, Gerri, the thing is, if it sounds too good to be true - that's what I always say, no matter what it is, online, whatever. If it sounds too good to be true, then it probably is.

WILLIS: That's right.

LEMON: So you know, what if you think you've been contacted by one of these artists? What do you do next?

WILLIS: Well, let's bring them down, bring them to justice, right? Cause you don't want them hurting somebody else. If somebody's calling you, they're going to call your mom, your grandma, your grandpa. They're going to hit people who are really vulnerable.

So, Federal Trade Commission, ftc.gov. They track this stuff, particularly online.

Federal Bureau of Investigation, their website is IC3.gov for some reason. Federal Bureau of Investigation, that's their website.

The Better Business Bureau at bbb.org. They have stories on this on their website all the time about what the scams are, what the red flags are, what you're seeing. You can call them as well, the local one in your community, and see if there's a scam operating in your area that you need to be aware of. And if you're just worried about them, you should contact them, too, so they can start investigating and bringing together information.

But look, this is an outrage. These people are trying to rip you off. You've got to make sure you understand what's going on. And you definitely want to make sure that you have all your ducks in a row.

LEMON: That last piece of advice you gave us is really good, because it's really easy to check it out before you get stuck or scammed. You can check it out and go, you know what? Give the information to the Better Business Bureau, whoever, and have them investigate it.

WILLIS: That's right. That's right, Don.

LEMON: Gerri, we appreciate it. Always good to see you. Thank you.

WILLIS: My pleasure.

LEMON: You know, everyone was hit hard - is hit hard by this latest financial crisis and the unemployment numbers. But did you know that black and Hispanic workers were hit even harder by the unemployment numbers? We've got help on the way for you.

(COMMERCIAL BREAK)

LEMON: This just in to the CNN NEWSROOM. It is breaking news. It is good news, for now.

Let's go to Wall Street and Susan Lisovicz will tell us about a rally - Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, every picture tells a story. So let's show the Big Board. And let's just savor those gains, Don, because we're seeing a huge rally. We're seeing a third day of gains for the three major averages. And we haven't seen anything like that since the end of January. At the end of January, by the way, when we did have three days of gains, it paled in comparison to what we're seeing now.

The Dow up basically 600 points since Monday's close. And that's a nine percent increase. Why is that? A few things. GM shares up big. GE shares up big. Pharmaceuticals up big. You've got a rally. We also - it's about time. We thought we'd leave it at that.

Back to you.

LEMON: And I said, let's hope it holds - thank - by the closing bell. Thank you. Susan Lisovicz, we appreciate it. We'll get back to you if something happens.

New jobless numbers are out, so brace yourself. This isn't good. They're worse than expected. Six hundred and fifty-four thousand Americans filed first-time jobless claims. That was just last week. That's 10,000 more than what economists had predicted.

And how tough is it to find a job these days? Well, just ask anyone of more than 5.3 million Americans. That's a total number continuing to file for jobless benefits.

The government says, the jobless rate for whites is 7.3 percent. That's well under the national average of 8.1 percent. But unemployment for African-Americans and Hispanics, way higher. Way higher, it's up in the double digits.

The rate among Asians is lowest. It's 6.9 percent.

So a couple of resources, especially we want to tell people who were hit hardest. Everybody's hit, but we're just offering a little bit of advice here.

The first one, let's talk about jobs, finding jobs. Black jobs.com. It's an interesting name here. Interesting to figure out what's going on. Just go to blackjobs.com. And then right here, if you want to scroll down to the bottom, it will ask you what job are you looking for. You can plug that in, and it brings this up. There you go. Talk about the job and then look and it says, that one is for a social job, social worker, what have you.

Then, latcareers.com - L-A-T-CAREERS-DOT-COM. Here, go to that website, and also there's a listing for hot jobs, where people are hiring. Scroll down and find that and you can see software architect, online. And A-M-P or AMP order services; senior administrative assistant; merchandising - all these jobs here.

And it's interesting to find out. I need to talk about exactly why are these jobs specifically for Latin? Why are those jobs for black people? I think maybe this may have something to do with speaking Spanish, but that's a good question to ask. And I'm going to figure that out for you. Why just blackjobs.com? Cause everybody's hurting. It's a good resource, though. Good resource.

Do you know that times are tough? Obviously, we all know that. And when you're competing with your kid for a job, man, that is even tougher. Desperate adults crash a teen job fair in Denver.

(COMMERCIAL BREAK)

LEMON: OK, at this time, "Team Sanchez" is back there frantically working on what's coming up in about eight minutes, right here on CNN.

What do you have for us, Rick?

RICK SANCHEZ, CNN ANCHOR: Mexico, Mexico, and Mexico.

LEMON: And more Mexico, yes.

SANCHEZ: We did a series on Mexico this week. We've been doing something all week long, Don. And what's interesting is, we've gotten a bevy of responses. I mean, people e-mailing me, telling me I have no idea what the hell I'm talking about. Also, those of us saying, you know what? That's a good series you're doing, that's important stuff you're talking about.

But even more importantly, we got a call last night from somebody in Congress who says, I want to come on your show and talk about this. Because I'm the chairwoman of the committee that's going to be meeting with, dealing with the border, securing the border, with drugs, with what's going on down there, with the violence that's going on in Mexico. And who knows, we might even be able to get something done as a result of what's going on across the border, rather than just talking about it. And I have no idea what this video is.

What is that?

LEMON: That is a space station it looks like, Rick. Is that - oh, it looks like Mars.

SANCHEZ: Really?

LEMON: Yes. We don't know what it is. But it's interesting, isn't it? Is that the rover on Mars?

SANCHEZ: You know, if they did that in Mexico, the problem would be solved. We would not have a...

(LAUGHTER)

LEMON: We could have those little drones, those little things in Mexico figuring out who are the bad guys and what's going on. Maybe that's a solution.

SANCHEZ: It's all about robots, baby.

Hey, look. There's something interesting that we're going to be talking about today, other than -- by the way, did you see the Dow? Up 218.

LEMON: I did. Yes, first time today.

SANCHEZ: Well, you know what, let's not say anything about it yet. We might spoil it.

Is part of the problem, Don, and this is not Bill Maher I'm going to be interviewing, we know what he would say. Is part of the problem to perhaps gain back $77 billion by legalizing marijuana?

LEMON: Rick, you know, I've been having this conversation with my team. I've been having this conversation with a lot of people. Saying that if we do tax marijuana...

SANCHEZ: Seventy-seven billion.

LEMON: Billion dollars.

SANCHEZ: Seventy- seven billion dollars.

LEMON: You don't even have to legalize it. You did decriminalize it, like other places do, get the money off of that and that way you can pay back some of this deficit.

SANCHEZ: We're not talking to like a comedian or Bill Maher, or anybody about this. We're talking to a Harvard economist who's an expert on everything related to the money side of this, and we're going to ask him the hard questions.

LEMON: There's a real ground swell out there, Rick. And a lot of it came, you know, after Michael Phelps. People started e-mailing me - I'm sure on you on Twitter or whatever - saying, maybe it's time we need to rethink marijuana and especially with the economy, and decriminalize it and get the tax money from it.

SANCHEZ: Or at least present the arguments that are being made without just automatically closing the door and saying, that sounds crazy.

LEMON: Yes. That it? I'm sure you got a lot more. But we got wrap now.

SANCHEZ: There's more, but I can't give it all to you.

LEMON: Yes, we don't want to give the whole show away. You got to stick around in a couple minutes.

SANCHEZ: All right, Donnie.

LEMON: About five minutes. Rick Sanchez, we appreciate it, sir. Thank you.

SANCHEZ: Thank you, man.

LEMON: All right. The AARP, champion of retired folks everywhere, may have pushed back its own employees' retirements. The lobbying group has just announced its suspending - suspending 401(k) matches. AARP says it was a difficult decision, and hopefully just temporary. The goal, of course, is saving jobs there. But just this week, reports came out, the group's eliminating about 240 positions.

Here's another sign of the dismal job markets. Well, adults crashing a job fair for teens in Denver. You need a job, but you go to one for teens because you need a job so bad. Dozens of companies sent reps to talk about mostly part-time and summer jobs that usually go to teens, adults showing up.

Some of the first in line, though, were old people. Colorado's unemployment rate is 6.6 percent in January. And metro Denver, it's almost a point higher.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's a lot of competition. And I guess now we have to look at adults as fierce competition. You know, like they're in the same market that we are.

UNIDENTIFIED MALE: I feel for them also right now with this being summer, getting ready to go on spring break and summer vacation, it's hard on them, too, to try and find a job.

(END VIDEO CLIP)

LEMON: You know, three counties co-sponsored that job fair, and you can expect more in the coming weeks. Teens competing with their parents, parents competing with their teens.

Also, we just showed you blackjobs.com and latcareers.com. Both of those sites are targeted to recruit minority talent. You can see right there on the home page of the blackjobs.com, they market saying they're the largest network providing online careers, centers or people with employees, African-American employees. So that's - they market themselves that way and that's why they say it is a good place to go.

All right. Now we go to the CNN NEWSROOM with Rick Sanchez in just a moment, after a break.