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CNN Presents - Pizza Bomber/Refund Robbery/Vanished
Aired November 22, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GARY TUCHMAN, CNN ANCHOR: I'm Gary Tuchman at the CNN center in Atlanta. Happy Thanksgiving. Here's what's happening.
The civil war in Syria claimed another 76 lives today. Reuters reports rebel forces captured a government army base in an important oil-producing region near Iraq. Attention also remains focused on a hospital in Syria's largest city, Aleppo. Rebels say it was bombed yesterday by government planes.
At least 50 vehicles were caught in a pile-up on Interstate 10 in East Texas near the city of Beaumont this morning. CNN Houston affiliates KPRC and KTRA report there was dense fog in the area at the time. No fatalities are reported, amazingly, but the highway was shut down in both directions.
And a Puerto Rican doctor says boxer Hector Camacho is brain dead after being shot in the head during a drive-by shooting two days ago. Nicknamed Macho Camacho, he boxed for more than 25 years and is a former lightweight and junior lightweight champion.
I'm Gary Tuchman at the CNN center in Atlanta. Next, CNN PRESENTS.
ONSCREEN TEXT: The following program contains graphic images. Viewer discretion is advised.
ANNOUNCER: Tonight on CNN PRESENTS, "Twisted Tale," a pizza delivery man robs a bank with a bomb around his neck.
UNIDENTIFIED FEMALE: These suckers say you've got 55 minutes, man. What are you going to do?
ANNOUNCER: And that's just the beginning of one of the most bizarre crimes ever. The twisted tale of the man known as "The pizza bomber."
UNIDENTIFIED MALE: It's like the federal government putting crack cocaine in candy machines. It's that easy.
ANNOUNCER: This isn't just a drug bust. It involves tax fraud and your refund is at risk.
Vanished. Two Florida men last seen with the same sheriff's deputy.
RANDI KAYE, CNN ANCHOR: Do you have any hope your son is still alive?
UNIDENTIFIED FEMALE: I don't believe that Terrence is alive. At this point, I have to find out what happened to him.
ANNOUNCER: The mystery surrounding two missing men. Revealing investigations. Fascinating characters. Stories with impact. This is CNN PRESENTS with your host tonight, Randi Kaye and Drew Griffin.
KAYE: Tonight, bizarre crime stories - a baffling whodunit, a brazing scam that's targeting your hard-earned paycheck and the mysterious case of two men in Florida who simply vanished.
DREW GRIFFIN, CNN ANCHOR: We begin on a blistering summer day in Erie, Pennsylvania. By the time the sun had set, one of the most bizarre bank robberies in the annals of the FBI had been committed. A man described by his family as the salt of the earth was dead, and a mystery full of strange twists was about to unfold with this phone call to 911.
OPERATOR: 911. What's your emergency? BANK EMPLOYEE: Yes, we just have been robbed.
OPERATOR: Was anyone hurt?
BANK EMPLOYEE: No. He just walked out the door.
GRIFFIN: August 28, 2003, Erie, Pennsylvania. Within minutes of robbing a bank, Brian Wells is surrounded by police, cross-legged on the ground and handcuffed. He told police he was a pizza delivery man and he delivered a pizza. The group he delivered it to captured him, he told police, put this bomb on his neck and told him to rob a bank.
BRIAN WELLS: Can you call my boss?
UNIDENTIFIED MALE: Yes.
GRIFFIN: He asks police to call his boss, then to save his life.
WELLS: Why is it nobody's trying to come get this thing off me?
GRIFFIN: 25 minutes tick by, then the device begins to beep.
WELLS: I heard the thing ticking when he did it. It's going to go off.
GRIFFIN: In an instant, the bank robber is dead.
The death of Brian Wells in this parking lot that day turned out to be only the beginning of the most elaborate, intricate and some say still unsolved bank robbery case the FBI has ever had.
DAVID HICKTON, U.S. ATTORNEY, WESTERN PENNSYLVANIA: At the end of it all, our system worked. Our law enforcement partners solved the puzzle, and we achieved convictions and long sentences.
GRIFFIN: The FBI, the local police and the U.S. Attorney's office simply want this case to be closed, but is it? Tonight, you decide. Did the FBI catch all the suspects? Did the FBI let one of them walk? Did the FBI make a mistake putting blame on a pizza delivery man whose secrets blew up in a parking lot?
It was a hot Thursday afternoon. Jean Heid was expecting to see her brother at a party that night, but she had one errand to run. A quick shopping trip on Erie's Peach Street. But there was trouble. Police had blocked the road. Cops and cars everywhere. She turned around and went home. It was only later that night, watching the 10:00 news she learned what that traffic was all about.
JEAN HEID, BRIAN WELLS' SISTER: My kids are sitting on the couch and then the story airs of this bank robbery and a man came into the bank with a bomb on him.
GRIFFIN (on camera): You are recognizing your brother?
HEID: My brother sitting there with this bomb on him. And I'm thinking, OK, the police have him, they'll find out who did this to him. Then as it goes on, it's like -- Brian exploded, you know, the bomb went off. Brian's dead. And I'm like, I can't believe this.
GRIFFIN (voice over): After the explosion, one of the first things the cops did was look inside his car and they found these meticulous notes that amounted to a bizarre scavenger hunt, notes given to Brian Wells, instructing him to follow a lengthy set of orders if he wanted to survive.
RICH SCHAPIRO, WIRED MAGAZINE: Laying out this puzzling highly complex scavenger hunt, directing him to go to specific places.
Rich Schapiro is a journalist who's written extensively about the robbery for "Wired" magazine.
SCHAPIRO: The notes suggested that at the very end of this, if he completed it in the allotted time, which wasn't much, that he would be able to save his life.
GRIFFIN (on camera): Have you asked yourself, why didn't my brother Brian get in that car and drive straight to the police station?
WELLS: No. I never asked that because Brian was in survivor mode. I truly believe that he was trying to save his life and others' lives.
GRIFFIN (voice over): But the police had no idea what to think. Was Brian Wells a victim? Was he in on the robbery? What were those notes all about and who wrote them? Why? There were no answers but plenty of agencies wanting to be involved in the biggest case Erie had ever seen.
BOB RUDGE, FBI SPECIAL AGENT IN CHARGE: We have formed a multi-agency taskforce comprised of the Pennsylvania state police, the ATF, the Erie police department, specifically their bomb squad, the United States Attorney's Office and the Erie County district attorney's office.
JIM FISHER, RETIRED FBI AGENT: I wouldn't be surprised if some game warden from Warren, P.A. was on the taskforce.
GRIFFIN: Jim Fisher, a former FBI agent and criminologist, studied the case from the beginning.
FISHER: So you have 50 people running around randomly conducting, you know, leads with very little coordination. No one really seemed to be in charge.
GRIFFIN: From the outset, he believes the FBI, the Erie police, all the law enforcement agencies involved were on the wrong track. This was not, he says, a bank robbery.
(on camera): You believe Brian Wells was murdered?
FISHER: Well, he was murdered. And it was the first-degree murder. This was an intentional, premeditated homicide. Moreover, it was extremely cruel in the way the crime was executed.
GRIFFIN (voice over): Not just the crime, the actual bomb was a crude masterpiece of someone's twisted art. Police would find intricate decoy cables, homemade lock. It all made into a bizarre puzzle wrapped around the neck of the victim. And whatever this was, a bank robbery, a violent murder, the case was about to take another bizarre, almost unreal twist.
UNIDENTIFIED MALE: There is a frozen body, it's in a freezer in the garage.
GRIFFIN: A second body, this one hidden in a freezer, and a new suspect telling an even stranger tale.
UNIDENTIFIED MALE: What came first, the body or the freezer?
UNIDENTIFIED MALE: The body came in, I put it on the carpet ...
GRIFFIN: Just ahead, a man, a body and an ever expanding cast of suspects.
GRIFFIN: As Brian Wells was on the ground in that half hour after he robbed the bank, another man was watching everything unfold from across the street. According to an FBI affidavit, informants said a 63-year-old handyman named William Rothstein, was sitting in his car, eyes focused on Brian Wells. Bill Rothstein, officials later said, was the mastermind behind the entire scheme.
BILL ROTHSTEIN: I put a cut piece of green tarp down here to put his body on.
UNIDENTIFIED MALE: OK.
GRIFFIN: This is Bill Rothstein a few months after that bank robbery in a police evidence tape, where he's explaining to a detective how he helped a former girlfriend, Marjorie Diehl-Armstrong, dispose of a body. UNIDENTIFIED MALE: What came first, the body or the freezer?
ROTHSTEIN: The body came in, I put it on a cart. I'll show you where the cart is. The cart has big wheels, not the cart with the small wheels. Yes, that one there.
GRIFFIN: But what's really going on here? What did that body in the freezer and Bill Rothstein's confession have to do with the collar bomb explosion that killed Brian Wells? In a word, everything.
Bill Rothstein told police he was just doing Marjorie a favor. He claimed Marjorie had killed her abusive ex-boyfriend named Jim Rhoden (ph). But the FBI's investigation tells another story. Rhoden knew about the bank robbery plot and was about to go to police. Rothstein made that mess go away.
DOUGLAS SUGHRUE, MARJORIE DIEHL-ARMSTRONG'S ATTORNEY: He came to the house and helped. He took the body out, cleaned everything up, cleaned the walls, replaced floorboards, replaced everything, painted, got rid of everything that might have blood on it.
GRIFFIN: After Rothstein turned her in to police for the murder of her ex-boyfriend, Marjorie stunned investigators with another twist. She connected Rothstein to Erie's biggest bank robbery.
SUGHRUE: I mean, to build the bomb and test the bomb and all the components, he had to have already been building it and designing it. In doing that, he also said, I need some money, so Marjorie just gave him like $75,000 worth of money that she also kept at the house, so Bill Rothstein was left with two of the most important things to hold over Marjorie Diehl Armstrong. Number one, all her money, and number two, a dead body that would make her lose her liberty for the rest of her life.
GRIFFIN: Even though Marjorie Diehl-Armstrong had been talking with police, it took the FBI nearly four more years before it could tie up all the loose ends. Everybody, the FBI said, was involved with the robbery. Bill Rothstein, Marjorie Diehl-Armstrong. Even another suspect, a crack dealer named Kenneth Barnes. And Barnes claimed Brian Wells was in on the plot from the beginning and that he was duped.
SCHAPIRO: Wells was essentially told he would be robbing the bank, but the device that was being put around his neck would be fake, so he would not be putting himself in harm's way. As it turns out, he was double-crossed.
GRIFFIN: Criminologist Jim Fisher believes it was Rothstein who wanted to pull off the perfect diabolical crime that would baffle investigators. The elaborate scavenger hunt would eventually send police to a dead-end. The confusing yet meticulously crafted collar bomb, even the white t-shirt Brian Wells wore into the bank spray painted with the word "Guess" -- to Fisher, all of it hatched in the mind of a madman.
FISHER: The kind of motives we can understand, like a standard bank robbery, someone needs the money. And then we have a category of crime involving motive that a normal person can't really understand.
GRIFFIN (on camera): You're describing Bill Rothstein.
FISHER: That would be Bill Rothstein in my mind. To me, he fits, to a t, the profile of someone who would commit such a bizarre and pathological crime.
GRIFFIN (voice over): But now four years after the original crime, the government had to prove in court its theory was correct. And there were two big problems. Rothstein, the alleged mastermind, died before even officially being linked to the crime. And the other main suspect, Marjorie Diehl-Armstrong, had told so many lies, she was showing evidence of mental problems and a personality disorder.
SUGHRUE: The mental illness was a 30-year history. The personality disorders were a 30-year history.
GRIFFIN: Over many delays and many more years, the government finally obtained convictions on charges of bank robbery and murder. Life plus 30 years for Marjorie Diehl-Armstrong. A lesser sentence for accomplice, Kenneth Barnes, because he testified on behalf of prosecutors. Brian Wells, who died with that bomb around his neck, well, the federal government said he, too, was in on the crime.
HEID: When Brian delivered the pizza, he was accosted at gunpoint by a group of strangers whom he did not know. They shot at him. When he tried to run away, they knocked him to the ground.
GRIFFIN (on camera): The FBI version of that, as you know, is different.
HEID: That's a lie. That's a lie. That's all their fabrication.
GRIFFIN (voice over): The FBI did agree to sit down with CNN, to explain their case and their prosecution, how it all went down. They just wanted to know the day we'd arrive here in Erie and where the interview would take place. Then the FBI began asking us questions. Who else would be interviewed for this report? And suddenly, the interview with the FBI was off. Jim Fisher says the FBI and the U.S. attorney took the easy way out and never really solved the case.
FISHER: Bill Rothstein died about a year after the crime and he died with, in my opinion, all the secrets, all the answers. And to that extent, well, nobody literally dies laughing. He went to his grave knowing that he had outfoxed everyone.
GRIFFIN: Neither the U.S. Attorney's office nor the FBI would comment to CNN about Fisher's assertions. And yet there is someone who is alive, who Kenneth Barnes says was at Rothstein's house the day of the robbery but was never charged in the crime. He is the convicted sex offender granted immunity in exchange for testimony he was never asked to give. Next.
(on camera): Brian Wells' family is really wanting to know about you, sir. Please.
(voice over): Could this man hold the answers that would finally solve the case?
GRIFFIN: In her search for justice, Jean Heid said she has spent years trying to learn the truth from the one man she believes now holds the key to her brother's innocence. His name is Floyd A. Stockton, a convicted sex offender who authorities say was living with Bill Rothstein on the day of the bank robbery. He goes by the nickname, Jay.
HEID: Jay Stockton is a convicted rapist, serial sexual battery of his wife, and he's out there. He's out there, people.
GRIFFIN: He is the only one left alive and sane enough to tell the truth, she believes, yet the federal government has allowed him to go free. HEID: They know that my brother is innocent, 100 percent. And they know that Bill Rothstein, Jay Stockton are the co-conspirators in this crime that killed Brian.
GRIFFIN: According to this FBI affidavit, investigators learned of Stockton's knowledge to the crime when Stockton talked about it in a monitored phone call from jail. Stockton was released, then given immunity to testify for the government in the pizza bomb case. Investigators say they compared Stockton's handwriting to this handwriting on those scavenger notes found in Brian Well's car. It was a perfect match.
HEID: The authorities believe there were at least two people who wrote the notes, and Jay Stockton is definitely one of them.
UNIDENTIFIED MALE: On camera is Kenneth Eugene Barnes.
GRIFFIN: There is also the testimony of this man, Kenneth Barnes.
KENNETH BARNES: But it's like I say, I'd never kill anybody.
GRIFFIN: Barnes pled guilty and is serving a 20-year sentence for his role in the case. But it's this FBI search warrant affidavit, now obtained by CNN, which raises even more questions about why Jay Stockton has been allowed to go free. According to the affidavit, Barnes and others involved in the case say Floyd Stockton was deeply involved in the plot. Barnes even telling the FBI on the day of the crime, it was Stockton who went into the garage, got the collar bomb and handed it to Rothstein. When we asked then U.S. Attorney for Western Pennsylvania Mary Bette Buchanan, why Stockton never testified and was never charged, she initially told us Stockton was sick, had suffered several strokes and was unable to travel. After our initial phone call, Buchanan never talked to us again. And at a news conference in Erie, the current U.S. attorney, David Hickton, wasn't forthcoming either.
(on camera): What about Mr. Stockton, what can you tell us about his status and will he ever be prosecuted for this?
DAVID HICKTON, U.S. ATTORNEY, WESTERN PENNSYLVANIA: We're not in a position to comment on Mr. Stockton. GRIFFIN: Douglas Sughrue, Marjorie-Diehl Armstrong's attorney, says there's good reason the U.S. attorney and the FBI want to keep quiet about Jay Stockton.
(on camera): Do you think he is the one person who got away with this?
SUGHRUE: Oh, yes. He got immunity from the government. Absolutely. Free and clear. Convicted sex-offender, multi-time sex offender. The government felt that he was the least involved person, and so they gave him immunity.
HEID: They shouldn't have gave him immunity. He didn't deserve immunity. He deserved -- he is the guilty one that killed my brother. He deserved to be brought to justice.
GRIFFIN: Stockton has been featured on the television show, "America's Most Wanted." Private investigators have tried to track him down, but Stockton has literally vanished. At least that is what he may have thought until the day we found him.
These are pictures of Stockton today, two hours north of Seattle, down a side street in Bellingham, Washington, we found Stockton where he told our investigator he's been living in this duplex for the past six years but was soon about to leave. A week later, we spotted him leaving the duplex in a pickup truck. We followed to an RV sales lot, where he was eyeing a large recreational vehicle. It was perhaps the first time in years anyone had mentioned his involvement in the pizza bomb case.
How are you doing, Mr. Stockton, right? Drew Griffin. I'm with CNN. How you doing? It's taken a long time for me to find you. I wanted to ask you some questions. No, sir, Brian Wells' family is really wanting to know about you, sir. Please.
As fast as he could, with his driver's side window lowered, Jay Stockton sped away, not saying a word.
Mr. Stockton, this is Drew Griffin again with CNN. Brian Wells' family is really just trying to get to the truth of the matter about particularly their brother. You're the only one alive and sane enough to tell the truth. And that's what they're after.
He has refused all of our phone calls, refused to respond to notes placed at his door. The assistant U.S. attorney who prosecuted the case insists to us Jay Stockton would tell us what the federal government has proven in court, that Brian Wells was involved with the bank robbery.
MARSHALL PICCININI, ASSISTANT U.S. ATTORNEY, WESTERN PENNSYLVANIA: No one could have sat through this criminal trial without understanding the degree of evidence linking Mr. Wells to these particular participants.
GRIFFIN: In fact, the same affidavit that implicates Stockton repeatedly implicates Jean Heid's brother. The suspects involved saying Brian Wells knew the plot all along, was involved in the planning, was part of the band of criminal misfits trying to rob a bank. Jean Heid will never believe that. She believes her government is lying.
HEID: They let an innocent man, my brother, die while in their custody, and they didn't even lift a finger to help him. This case is going to be looked at for years to come. And they don't want it known that they screwed up. Brian never would have done this.
GRIFFIN: Jean Heid is still claiming her brother's innocence and still says she won't rest until she can prove it. Meantime, there's a new book about the case that's scheduled to be published later this year. One of its authors is a reporter for the local newspaper in Erie, who's been following the case all these years. And the other author, a now retired FBI agent, who was the lead investigator.
Coming up, it's being called the new crack cocaine of crime, thieves stealing your tax refund before you even know it. How do they do it? Randi Kaye's special investigation is next.
GRIFFIN: Imagine filing your income taxes only to be told someone else has already done the same thing and gotten your refund.
KAYE: It's a fraud so big that the IRS doesn't even know how much money is getting into the hands of criminals, although law enforcement says it's well into the billions of dollars.
GRIFFIN: Every taxpayer is at risk, and as our investigation reveals, the criminals have gotten incredibly brazen, in spite of an IRS crackdown on refund fraud. It's gotten so out of hand, police call this the crack cocaine of crime.
KAYE: Now, for the first time in our investigation, you'll see the fraud as it unfolds in Florida, where in some neighborhoods refund robbery has become a way of life.
UNIDENTIFIED MALE: Westbound on 163.
This is a known gang member. Let him get around us.
KAYE: We've just rolled up on what police say is evidence of one of the biggest and easiest frauds in America to pull off. A crime hidden on a piece of plastic, a debit card.
UNIDENTIFIED MALE: He's got the cards. He just purchased them, it looks like.
KAYE: Those debit cards, police say, are used to take advantage of fast tax refunds from the IRS. The thieves are stealing those refunds by stealing people's identities, filing returns online with phony information, and getting the IRS to put the refund money on the debit cards.
UNIDENTIFIED MALE: This is what they're buying. See Green Dot money cards, Target. He went to Target and spent 600 bucks. And he paid with a debit card.
UNIDENTIFIED MALE: What did you get? $1,000 for Christmas in gift cards?
KAYE: Police say the man they pulled over, who's already facing identity theft charges in another case, is a known member of the infamous Money Avenue Gang, which specializes in this kind of fraud. Not surprisingly, he's in no mood to talk.
I'm just curious what you do for work that you drive such a fancy car.
UNIDENTIFIED MALE: I don't know nothing about that.
KAYE: You don't know nothing about that? Can you tell me if you know anything about identity theft happening around here?
UNIDENTIFIED MALE: I don't know nothing about that.
KAYE: Are you involved in any of the tax fraud?
UNIDENTIFIED MALE: I don't know nothing about that.
KAYE: Detectives Craig Catlin and Rocky Festa (ph) of the North Miami Beach, Florida Police Department will later charge him with buying these gift cards with stolen tax return money. Police say here's the same guy on video at Target using a debit card in someone else's name with a fraudulent tax refund on it. And police say he used that debit card to buy those gift cards that were on the front seat of the car.
UNIDENTIFIED MALE: Come on, man.
KAYE: He's arrested for marijuana possession, but police later charge him with grand theft in connection with tax refund fraud. He pled guilty to the drug charge but not guilty to grand theft.
How easy is it to do this?
DET. CRAIG CATLIN, NORTH MIAMI BEACH POLICE DEPARTMENT: The fraudulent refunds are so easy, it's like the federal government putting crack cocaine in candy machines. It's that easy.
UNIDENTIFIED MALE: We already have one detective on the scene with an eyeball on the jewelry store.
UNIDENTIFIED MALE: You guys show up, because we'll need help over there.
UNIDENTIFIED MALE: A car just pulled up, the target we observed receiving 23 fraudulent U.S. Treasury checks.
KAYE: Police in North Miami Beach alone, with just 98 officers patrolling a city of 41,000, have seen over $100 million in tax refund fraud just in the last two years alone.
It's big money. The criminals cash in those debit cards as quickly as possible, showing off their riches with expensive luxury cars -- Jaguar, Porsche, BMW, Mercedes Benz, and souped up sports cars with expensive rims. They flaunt fancy watch, diamond pendants worth $55,000, and other jewelry, this one inscribed with the words "money hungry."
Is this all about fast money, fast lifestyle?
INTERIM CHIEF LARRY GOMER, NORTH MIAMI BEACH PD: I think it is. The money doesn't mean anything to them, because they can make so much of it.
KAYE: The fraudsters buy Social Security numbers from insiders at hospitals, doctors' offices, even car dealerships. Any place where you have to give your personal information. Larry Gomer, the interim police chief, says as soon as the thieves buy a debit card, they're off and running.
GOMER: They register that card in the name of the victim. They already have the victim's name and date of birth and Social Security number for the return that they are going to file.
KAYE: When the tax refund hits the debit card, the identity thieves call it the drop. The criminals then take the drop money to ATM machines and grocery stores to get the money off the card as quickly as possible, as these police videos of suspects who were later arrested show. And while the debit cards are widely used for fraud, the criminals are so confident they won't get caught, that at times they even have actual U.S. Treasury checks sent to them.
In this North Miami Beach neighborhood, where the Money Avenue Gang operates, tax refund fraud has replaced drug dealing.
So in the cars that you pull over, do you find instead of bricks of drugs, do you find bricks of debit cards?
UNIDENTIFIED MALE: Debit cards. And the other thing that we find that we get lucky on sometimes is the actual ledgers of the names, Socials and date of births.
KAYE: That they've stolen?
UNIDENTIFIED MALE: Yeah, they've stolen.
KAYE: And no one is safe. These two detectives among four in the unit who fight this very crime are themselves victims of tax refund fraud.
Detective Denise Love got a call just hours before our interview that someone had filed a tax return under her name.
DET. DENISE LOVE, NORTH MIAMI BEACH PD: Here we are, living a legal life and working a job, you know, and these crooks are rolling around in $100,000 cars and staying in penthouses on Miami Beach and throwing money at strip clubs and everywhere else.
KAYE: With your money?
LOVE: With my money. KAYE: Detective Jose Marin got this chilling message when he tried to file his return this year. Someone else had already done it under his name.
DET. JOSE MARIN, NORTH MIAMI BEACH PD: The thing that really hits us hard is that it mostly affects our family. And when you start messing with our family, it's something -- you take it to another level. So you get upset.
KAYE: Marin was counting on more than $9,000. Love was expected $6,100.
LOVE: I know from dealing with victims that it's going to be a long time before I see that money.
KAYE: Coming up, what does the IRS say to some officials who charge it's making it too easy for your money to wind up in the hands of criminals?
Why hasn't the IRS stopped that?
KAYE: It's just another night on the streets in Tampa, Florida, where police say tax refund fraud is the new crack cocaine for criminals.
UNIDENTIFIED MALE: That's over 2,000 in cash.
This lady doesn't have a job. She's unemployed.
KAYE: But inside her SUV, it looks like she went on a shopping spree, and police find this in her purse. Someone else's Social Security number and an online tax filing website, a red flag for fraud.
UNIDENTIFIED MALE: She got the information from somebody, their Social, their e-mail address, dollar amount that they're going to put in for with the federal government that they get a return on.
KAYE: And anyone can learn the crime. This handwritten guide confiscated by police spells out how to get away with it, something this police informant and convicted felon we'll call Cheryl knows all too well. She says she teaches friends how to do what's known on the street as the drop -- someone else's tax refund dropped on to a fraudster's debit card.
CHERYL, POLICE INFORMANT: This is like some of these guys get together, and we're going to meet here, and (inaudible), we all work together. Some people I know get up at 8:00 in the morning and don't finish until 8:00 at night.
KAYE: It's like a full time job.
KAYE: But do you think anybody who is involved in tax refund fraud thinks about the person whose identity they've stolen, whose IRS refund they're taking?
CHERYL: No. They try to get to the top. They want to be better than the next person.
KAYE: The goal, make money as fast as possible.
CHERYL: Fast money, you have to flash it. You have to let others know, hey, I got this.
KAYE: Even if it means you are going to go to jail? CHERYL: Yes.
KAYE: And the lure was apparently too much for Cheryl. Just days after our interview, she was arrested for tax refund fraud.
CHIEF JANE CASTOR, TAMPA PD: The process is broken.
KAYE: In Tampa alone, where police estimate the fraud approaches a staggering half billion dollars in the last two years, Police Chief Jane Castor says the IRS efforts to curtail it aren't working.
CASTOR: I don't think I have ever seen this magnitude of fraud that is just wide open. It's wide open. There just doesn't seem to be much being done about it.
KAYE: She says suspects charged by local police know the penalties are light. Unless there are federal charges, which in most cases don't happen, or take a long time to file. For its part, the IRS identified $6.5 billion in tax refund fraud related to identity theft last year.
CASTOR: I'd like to hear the other side of that equation, too, an estimation how much got through.
KAYE: That's what we wanted to know. But after weeks of asking, the IRS's deputy commissioner, Beth Tucker, still could not provide an estimate of the fraud that's gone undetected.
Just to be clear, you can tell us how much has been caught, but the IRS can't say how much of this fraudulent money has ended up in criminals' hands?
BETH TUCKER, IRS DEPUTY COMMISSIONER: We process 140 million tax returns at IRS on a given year. The greatest majority of our taxpayers file a legitimate tax return. So, do some of these fraudsters, perpetrators actually get a tax refund illegally? Unfortunately, yes. But for the actual size of the problem, we probably need to get back to you with a number.
KAYE: We're still waiting on that number. Typical, says Tampa mayor, Bob Buckhorn, who is furious with the IRS.
Has the IRS disappointed you and your city?
MAYOR BOB BUCKHORN, TAMPA, FLORIDA: I don't know. I haven't seen them. As far as I'm concerned, they're missing in action. They have not been helpful. They have not been a player. They have not taken responsibility for their side of the enforcement. If anything, you know, we've been banging our heads against their door asking for help and getting nothing in response. The silence has been deafening.
KAYE: Is the IRS missing in action in Tampa? What's your response?
TUCKER: No. The IRS is not. In fact, we have significantly increased the amount of resources we've devoted to identity theft, which is a heinous crime. KAYE: Just one week after our interview, the IRS sent a team to meet with Tampa and North Miami Beach Police officials. Law enforcement tells us there's a simple solution to curbing much of the fraud. Don't allow the refunds to be put on debit cards.
Why hasn't the IRS stopped that?
TUCKER: Not every taxpayer has a bank account. And so the debit cards that are issued by a third-party provider are a legitimate way for taxpayers to get their refund.
KAYE: The IRS does not verify information entered on the return before issuing the refund.
How much of this has to do with a speedy return? I know you want to get the return to the taxpayers as early as possible. Is that part of the problem?
TUCKER: The balancing act is something that we're constantly aware of. I mean, the American taxpayer that's worked hard all year long and is depending on that legitimate refund, they have a right to get that refund from IRS as quickly as possible.
KAYE: And the fraudsters, they know time is on their side. The faster the IRS sends out the returns, the sooner they get some hard working taxpayer's cash.
BUCKHORN: It's an underground epidemic. It has taken the place of street level drug dealing.
UNIDENTIFIED MALE: Are these your cards?
BUCKHORN: It is a very, very scary proposition.
KAYE: The Treasury inspector general says it can take victims of fraud more than a year to resolve their cases. And, according to police, this problem is only getting bigger, as more criminals learn just how easy it is to pull off. Police also say they've been told that even high school students are doing the fraudulent returns.
Up next, the mysterious disappearance of two men in Florida last seen in the hands of a law enforcement officer. We investigate.
KAYE: Whatever role race may or may not play in the Trayvon Martin case, recent history in Sanford, Florida and elsewhere gives many in the African-American community reason to suspect and in some cases fear the police. On his blog, the film director, Tyler Perry, describes an intense traffic stop he had with police in Atlanta. He's also calling attention to the disappearance in Florida of two men whose last known encounter was with a now fired sheriff's deputy. My investigation into the missing men.
KAYE: Marcia Williams hasn't seen her son in more than eight years.
Do you have any hope your son is still alive?
MARCIA WILLIAMS: I don't believe that Terrance is alive. At this point, I have to find out what happened to him.
KAYE: What happened to Terrance Williams is anybody's guess. He was last seen outside this Naples, Florida cemetery on January 11, 2004, with this man, Sheriff's Deputy Steve Calkins.
Investigators say Calkins' story about meeting Terrance Williams here at the cemetery just doesn't add up. At one point, Calkins said he pulled Terrance Williams' car over because it was having problems. But when he called his friend in dispatch, he reported the car had been abandoned. He never let on he'd had any contact with the driver, Terrance Williams.
STEVEN CALKINS: I got a 'homie' Cadillac on the side of the road here. Signal 11, signal 52, nobody around.
Maybe he's out there in the cemetery. He'll come back and his car will be gone.
KAYE: But if the driver was not around, how then was Deputy Calkins able to run a background check using Terrance's name and birth date?
DISPATCHER: Last name?
CALKINS: Williams. Common spelling.
DISPATCHER: Date of birth?
CALKINS: 4-1-75. Black male.
KAYE: Yet just four days later, Calkins claims to remember nothing of the car or the driver. Listen to what he says when a sheriff's dispatcher calls him at home.
DISPATCHER: You towed a car from Vanderbilt and 111th Monday, a Cadillac. Do you remember it?
DISPATCHER: Do you remember, she said it was near the cemetery.
DISPATCHER: The people at the cemetery are telling her you put somebody in the back of your vehicle and arrested them. And I don't show you arresting anybody.
CALKINS: I never arrested nobody.
WILLIAMS: Isn't that amazing. He's a seasoned veteran, and he couldn't remember four days later?
KAYE: So you don't buy that?
WILLIAMS: No, it's not true. It's not true at all.
KAYE: Eight days after Terrance vanished, Deputy Calkins was ordered to write a report. And it's in this report that a different story emerges. Deputy Calkins says he drove the 27-year-old father of four to this nearby Circle K, where he says he thought Terrance worked. And it is that version of events that concerned investigators, because just months earlier, they'd heard the same story from Deputy Calkins about another missing man.
23-year-old Felipe Santos vanished October 14th, 2003 after Deputy Calkins responded to the scene of a minor accident involving Santos. He issued Santos a citation and put him in the back of his sheriff's car. Santos' brother, who was also at the scene, asked we hide his face out of fear for his own safety.
Did Deputy Calkins tell you where he was taking your brother?
UNIDENTIFIED MALE (through translator): The officer never told us anything. Later we went to the jail, and my brother wasn't there.
KAYE: When Calkins was questioned about Felipe Santos, an undocumented worker, he told investigators he dropped Santos off at a Circle K.
Sheriff's investigator Kevin O'Neill (ph).
UNIDENTIFIED MALE: We have no independent corroboration of anybody telling us that they saw Williams or Santos at one of these Circle K's. That's strictly Calkins's testimony. And I think we can add up where we can put his testimony at this point.
KAYE: O'Neill says neither of missing men were ever seen on Circle K's security cameras. And there's more. About a month after Terrance Williams disappeared, Steve Calkins gave a sworn statement during an interrogation. He told investigators he had called this Circle K, where he says he dropped Terrance Williams off. He told investigators he made that call from his work-issued Nextel phone. But when investigators said they pulled his phone records and told him there was no record of a call to this Circle K from his cell phone, he brushed it off, saying simply, quote, "I don't know what to tell you."
You've been doing this for a long time. You know when something doesn't smell right. Do you think that Deputy Calkins had anything to do with the disappearance and possible deaths of these two men?
UNIDENTIFIED MALE: He's absolutely in the middle of the investigation, and everything I turn to brings me right back to Steve Calkins.
KAYE: Months after Santos and Williams went missing, Deputy Calkins, a 16-year veteran, was fired for lying in connection with the investigation of Terrance Williams. Calkins hasn't been charged with a crime because no criminal evidence was ever found linking Calkins to the disappearances. In the case of Terrance Williams, investigators say the deputy's car was searched and described as immaculate. Calkins's home was never searched, because according to investigators, they didn't have the evidence needed for a search warrant.
We wanted to ask Steve Calkins some questions, but couldn't get past this woman.
Hello. Hi. Sorry to bother you. I'm Randi Kaye with CNN. I'm looking for Steve Calkins.
WOMAN: No. You can get the camera out of our property, please.
KAYE: He's not on your property.
KAYE: Is he here or is he--
KAYE: In 2006, Calkins did tell a local paper he didn't do anything wrong, blaming the coincidences of the missing men on very bad luck. He suggested maybe they ran away.
WILLIAMS: If Terrance was alive, Terrance would have had somebody to contact his mother. I know for sure, that's one thing that he would do in a heartbeat, call my momma.
KAYE: According to the Collier County Sheriff's Office, the tips are still rolling in, but nothing concrete enough to make an arrest. It is, of course, a very active investigation.
That's it for tonight's show. I'm Randi Kaye.
GRIFFIN: And I'm Drew Griffin. Thanks for joining us.