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Family Releases Cell Phone Video of Charlotte Shooting; Charlotte Mayor: We're Open for Business; U.S. Working Class Whites Dissatisfied with the Economy; Twitter Spikes on Takeover Rumors; Yahoo Data Breach Puts Verizon Deal in Spotlight; Marriott Completes Merger with Starwood; U.S. Crackdown on Mail Fraudsters; MG to Halt Manufacturing in U.K.; IG Nobel Prizes Awarded for Imaginative Achievements

Aired September 23, 2016 - 16:00:00   ET


[16:00:00] RICHARD QUEST, CNN ANCHOR: Trading coming to an end on Wall Street. The Dow is off 120 odd points toward the close. Step up and

Inspiring Women to Inspire Girls with a strong gavel to bring trading to a close. It is Friday. It's September the 23rd.

A boom for some, Charlotte's business community is confronting the inequality in the city. We will be in Charlotte to find out if latest

position this Friday evening. Twitter's shares are surging. There are takeover rumors swirling. Is there anything to the rumor of a Tweet?

And quite literally, living as a goat for science. We're going to speak to one of the winners of this year's IG Noble Prizes. It may be a Friday, but

I'm still Richard and I still mean business.

Good evening, before we get to a business agenda, we start with a new video this evening showing the minute before the police shot and killed Keith

Scott, an African-American man from Charlotte, North Carolina. Now the cell phone video was recorded by Keith Scott's wife. Her attorney says the

family is sharing in because the police won't release their own body cam video of the incident. We're going to show it to you now. This is the

cell phone video from the wife. I need to warn you, of course, it may be disturbing.


RAKEYIA SCOTT: Don't shoot him. Don't shoot him. He has no weapon. He has no weapon. Don't shoot him.

OFFICER: Don't shoot. Drop the gun. Drop the f--king gun.

RAKEYIA SCOTT: Don't shoot him. Don't shoot him.

OFFICER: Drop the gun.

RAKEYIA SCOTT: He didn't do anything.

OFFICER: Drop the gun. Drop the gun.

RAKEYIA SCOTT: He doesn't have a gun. He has a TBI. (Traumatic Brain Injury).

OFFICER: Drop the gun.

RAKEYIA SCOTT: He is not going to do anything to you guys.

RAKEYIA SCOTT: He just took his medicine.

OFFICER: Drop the gun. Let me get a f--king baton over here.

RAKEYIA SCOTT: Keith, don't let them break the windows. Come on out the car.

OFFICER: Drop the gun.

RAKEYIA SCOTT: Keith. Don't you do it.

OFFICER: Drop the gun.

RAKEYIA SCOTT: Keith, get out the car. Keith, Keith, don't you do it. Don't you do it. Keith.

OFFICER: Drop the gun.

RAKEYIA SCOTT: Keith. Keith. Keith. Don't you do it. [SHOTS]

RAKEYIA SCOTT: Did you shoot him? Did you shoot him? Did you shoot him? He better not be f--king dead. He better not be f--king dead. I know that

f--king much. I know that much. He better not be dead. I'm not going to come near you. I'm going to record, though. I'm not coming near you. I'm

going to record, though. He better be alive because ...


QUEST: We did warn you it was very graphic. Brian Todd is in Charlotte. Brian, I need you, sir, to put that video into the context of what we know

what the police have said. How does this video -- what piece of the jigsaw does it help make the picture clearer?

BRIAN TODD, CNN CORRESPONDENT: Well, Richard, here is the context we can tell you and what the video does for that context. The video does not show

the shooting. So that part we still have not seen. The video does not show whether Keith Lamont Scott had a gun on him. It does, you know,

illustrate that the police are telling him, yelling at him multiple times to drop the gun, drop the gun. His wife yells at him to get out of the

car. She yells, Keith, don't do it. Is she yelling don't do it to Keith or the police? We don't know that.

Again, and in the context of the police not releasing their videotapes, they have body cam videos and they have dash cam videos. They have not

released those tapes to the public yet. There's a lot of pressure on them to do so. The Police Chief, Kerr Putney, has said in his review of those

tapes. It does not conclusively show Keith Scott pointing a gun at the police. The chief said in those videotapes that the police has it does not

show Keith Scott's hands. So apparently, Richard, and none of these tapes do we really see definitively a gun and Keith Scott's hands. But the

police maintain he had a gun when he exited that vehicle. That they recovered a gun on the ground and they say that gun was his. Again, we

have not seen him with a gun. We have not seen him pointing a gun at officers. So that's what we haven't seen.

[16:05:05] QUEST: So in that scenario, now last night, there were more protests even with a midnight curfew. There were protests in Charlotte

which were peaceful by and large, and indeed were praised for that. What is the fear -- and I see the National Guard is on duty all weekend -- what

is the feeling, not the fear, what is the feeling about what happens tonight?

TODD: Well, Richard, I heard speculation both ways that it might insight more passion on the streets tonight here in Charlotte. I've also heard

speculation that it won't. I've covered the incidents here in Charlotte, and the protests on the streets here, and the rioting and the protest in

Baltimore. What I can tell you is there is no way to predict accurately what will happen after something like this releases. There's no way to do

it. Every time I hear a prediction, very often, the opposite happens that evening. So there's just no way to really know.

QUEST: And just briefly, because it is always relevant in these scenarios, what is the weather expected to be like there this evening?

TODD: It's a good question, Richard, a very insightful question. It's something I always ask when we're heading into this. It looked like there

is going to be some rain this afternoon. There was rain this morning. We don't believe there will be rain tonight. I have not really seen a recent

weather forecast, but you're right, that's going to have a huge bearing on what happens tonight.

QUEST: Brian, thank you for putting context into these difficult matters, we appreciate it. Brian Todd who's in Charlotte and we'll come back the

moment there is more to report.

In terms of the place itself. Well, Charlotte, in North Carolina, the state has had one of the fastest rates of economic growth anywhere in the

United States. When you thing about these Southern belts, the sun belts, if you like, which have had such tremendous growth as people have flocked

to those parts of the world. Not least at which because they have antiunion rules. They are seen as a free work state, so open state. CNN's

Clare Sebastian now explains the unrest that's burst out in Charlotte is putting that prosperity under some question.


CLARE SEBASTIAN, CNNMONEY CORRESPONDENT (voice-over): As protests grip Charlotte, North Carolina, the city's mayor is trying to put a brave face

on the situation.

JENNIFER ROBERTS, CHARLOTTE MAYOR: The city is open for business today. Our transit system is running. Our businesses are open.

SEBASTIAN: And yet the violence in North Carolina's business capital poses a threat, not only to the streets but to the state's finances. Finance

that's are already reeling from another blow earlier this year when the state passed laws that discriminate against the LGBT community. The

violence now putting Charlotte in another bad light.

RICK ROTHACKER, REPORTER, CHARLOTTE OBSERVER: It's not good for the image of the city. It's not good for people psyche and I think that coming on

top of some of the anxiety we've had over the LGBT law, and see some of the economic it's from that. It is an odd time right now for Charlotte.

SEBASTIAN: Because of that LGBT controversy millions of dollars in business has been lost. Money from sporting events that were moved like

the NBA All-Star Game and concerts that were canceled by the likes of Bruce Springsteen, Ringo Starr and Demi Lovato. Before all this happened though,

Charlotte and North Carolina had been on a roll in recent years. Bank of America is based there, as well as Wachovia, which is now a part of Wells

Fargo. It's also home to the largest U.S. utility, Duke Energy.

PETER SHANKMAN, MARKETING EXPERT, ENTREPRENEUR: In the late 90s, I mean it was blowing up. You could not find an apartment. You couldn't find a

home. Everything was sky high pricewise. Every company in the financial sector, and a lot of the tech sector as well, was moving down there.

SEBASTIAN: And yet violence this week shows, not everyone benefits from the growth. Especially in Charlotte's African-American community. The

states African-American unemployment rate was over 10 percent last year compared with under 5 percent of the state's white population. Experts say

the state has to do something to address social and economic issues.

SHANKMAN: It is seen as a state that isn't in line with a lot of the other sections of the country. You're not going to attract great talent if

you're business and say, hey, come moved to North Carolina in this current situation.

SEBASTIAN: The pressure is now I North Carolina's leaders to answer these challenges and help keep the peace. Clare Sebastian, CNNMoney, New York.


QUEST: So Adam Rhew is the associate editor of the "Charlotte Magazine". It obviously must distress you when you see your city and your state being

pilloried in such a fashion. But the reality is, as Clare was reporting there, that the economic growth -- Charlotte and North Carolina likes to

point to the gleaming new industry that's have taken it far, but there is an underbelly of poverty and underserved, which is very much there.

We appear to -- I'm not sure if it was my question or just the question of what I was about to ask him, but if we do get him back, he needs to answer

that question about what's happening in Charlotte. These things happen, it is live television. Coming up to 10 past the hour.

[16:10:10] There are just six weeks left until the U.S. election. The new poll numbers from CNN and the Kaiser Family Foundation show the vast

majority of working class whites in the United States are deeply dissatisfied with the economy. 78 percent of working class whites say

there dissatisfied. 44 percent of white college grads, 74 percent of working-class Blacks and 54 percent of working class Hispanics. Now the

working class whites will most likely have a pessimistic outlook about the future of the economy. Half of them believe that kids will have a worse

standard of living than they did, 35 percent. So those are the numbers as it looks like at the moment. Joining me Betsy McCaughey, a Trump supporter

and former lieutenant governor of New York. The working class whites are to, some extent, you are a Donald Trump supporter?

BETSY MCCAUGHEY, FMR. LT. GOV. OF NEW YORK: I am and they have taken it on the chin in this economy. Of course, almost everyone has. On average,

Americans are earning less now than did in 2007 in real 2015 dollars. In other words, there's been so little growth that most people are not making

any headway. They're scrambling to get up the ladder, but they're stuck on the same rung.

QUEST: We did get some good income numbers a few weeks ago from the U.S. government. Which does show income is now starting to rebound. It's still

less than it was before the crises.

MCCAUGHEY: That's right.

QUEST: Why do you believe that Donald Trump's policies are the right ones for these working class whites, and 50 percent of African-Americans, when

the numbers show his economic policies will balloon the deficit.

MCCAUGHEY: While, because that's not the real issue. The real issue is sparking economic growth. And his tax plan is designed to create 3.5

percent to 4 percent economic growth. Something That is very achievable in this economy.

QUEST: No it is not.

MCCAUGHEY: Let me explain why it is. Although you've already committed to buying me dinner when we hit 3 percent.

QUEST: Two quarters 3 percent.

MCCAUGHEY: Highly motivated.

QUEST: Now two quarters.

MCCAUGHEY: What happened is the reason that the economy is limping along at 1 percent, 1.2 percent despite robust consumer demand, is that

businesses are failing to invest. For three quarters in a row now, we've had negative business investment. And when a business doesn't buy another

truck, it can hire another driver. When it doesn't buy another computer, it can hire another office worker.

QUEST: So what you like and Donald Trump's policies that will --

MCCAUGHEY: The key is slashing the corporate tax rate to 15 percent. Less than half of what it currently is. American companies paid the highest

corporate taxes in the world. Even after all the loopholes and deductions, they're still paying far more than companies in other countries. They're

at a competitive disadvantage. Many of them are leaving and those that are staying are earning less doing what they could be doing in some other


QUEST: I can certainly see the sympathy argument of lowering the corporate tax rate to what it is. When you look at Ireland or the U.K. or others.

However, you haven't addressed the issue of the deficit. On this program, yesterday, the Committee for the Responsible Federal Budget Deficit, a fine

body of men and women, said that his policies balloon the deficit to $5.2 trillion.

MCCAUGHEY: Yes, and let me point out why I'm not worried about that.

QUEST: Should you be?

MCCAUGHEY: Oh, yes, no, no. Way back in the 1960s, the same naysayers said that to JFK. He looked at the economy when he came into office and he

said, oh my, we have too little tax revenue, and what are we going to do about it? We're going to cut tax rates. He said this to the economic club

of New York. The very same state in which Donald Trump --

QUEST: And in the 1960 --

MCCAUGHEY: -- and they said don't worry about the deficit, because, in fact, after a period, and he coined this phrase, "transition deficit", you

will see more revenue coming in. If you want more of something --

QUEST: This is trickledown economics.

MCCAUGHEY: No, No. Don't call it trickle down. Don't call it trickle down. That's not what it is at all. That is a disparaging term used by

Democrats to belittle Republican tax policy --

QUEST: Because it doesn't work. Those policies don't work.

MCCAUGHEY: Kennedy's tax cuts sparked 5 percent yearly economic growth --

QUEST: And Kennedy didn't have to deal with NAFTA, and Kennedy didn't have to deal with China

MCCAUGHEY: -- Reagan came into office and faced the same kind of failing economy.

[16:15:00] Slashed corporate tax rates again, and achieve many years of 4.5 percent growth. And let me point out, Reagan, too, said don't worry about

the deficit. By 1991, the deficit was heading down. So don't wet your pants about the deficit.

QUEST: So the last time by my reckoning, as I remember we were looking at this recently, the U.S. enjoyed 3 to 4 percent economic growth --

MCCAUGHEY: Through almost the entire 20th century.

QUEST: Not quite, not quite --

MCCAUGHEY: 3.5was the average.

QUEST: If you take post the 21st century it's not been happening --

MCCAUGHEY: Very dismal, and under Obama it's never hit 3 percent once.

QUEST: You can't take the last eight years as being typical. As the country has brought itself out of the great recession. Particularly when

you're trading --

MCCAUGHEY: The worse recovery since the 1930s.

QUEST: When you're trading partners like the European Union are in trouble, and China is slowing down.

MCCAUGHEY: Ok, let me point out that Donald Trump's competitor, opponent, Hillary Clinton, actually projects under her economic plan, 2 percent

growth as far as we can see in the future. I urge Americans not to vote for somebody who's willing to settle for 2 percent growth. We could do

much better. And the fact is I hear people say, 2 percent growth, that's worldwide situation. We won't achieve the kind of growth we had in the

past. It reminds me of when Malthus said, stop having babies, we won't be able to feed them anymore. And then came the steam engine, the combine and

we had abundance. Have faith in the ingenuity of development. We will have abundance again.

QUEST: Which one of us gets too to choose the restaurant?

MCCAUGHEY: Let's go to a steak house.

QUEST: The thought of sitting next to red meat and you is enough to terrify me. You're on. Two quarters of 3 percent growth.

MCCAUGHEY: Yes. I agree.

QUEST: Whoever wins.

MCCAUGHEY: Otherwise I owe dinner at a fancy fish place.

QUEST: I think I've just been slapped on the head with a piece of wet fish.

The Chief Executive of Salesforce is partial to the occasional tweet. Does it make the company favorite to buy Twitter? It's QUEST MEANS BUSINESS on

a Friday.


QUEST: Twitter stocks soared more than 20 percent after CNBC network tweeted that the social media platform is considering selling itself. Now

Alphabet, which owns Google and Salesforce are mentioned as potential suitors. Paul La Monica joins me. Look at that. It is not often you see

that on a stock that's not been doing terribly well to begin with. Do you give credence to the report? Well, the reports are there. Do we think

it's accurate?

PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: I think something is going to eventually happen. Twitter cannot remain an independent company if it's

user growth remains stagnant at best.

[16:20:02] To do as your former guest just did, I don't think it's going to be, so sushi or whatever meal you want, if Marc Benioff

actually winds up buying Twitter. I still think it's going to be Google. Alphabet has interest in increasing its social media presence to fight.

Facebook. And Twitter's chairman used to work for Google, Omid Kordestani, so it's a natural fit I think.

QUEST: What does google gain by buying Twitter? Yes, it's got a certain foothold in the market, but what does a gain?

LA MONICA: I think what is interesting about Twitter lately is that, even before these takeover rumors lifted the stock, you have Twitter really

impressing people with its live video capabilities, which could lend themselves naturally to Google and YouTube. NFL, the two games so far on

Thursday night, have been a huge success. Everyone is conditioned to criticize Twitter for the most minor of sins. People have raved about

those streams. You also have the political debates that are going to be coming up as well. So Twitter is really turning into a place for news,

political, sports junkies, that might not be everyone that's on Facebook talking about what their kids had for breakfast, but it is still a market

that matters.

QUEST: But the idea of telling your mother-in-law what you were doing and telling great auntie Bess where you have been on Twitter, are you saying

that's passe to the future of it? And actually it's prime ministers making press statements. It stars given their reaction to dead colleagues.

LA MONICA: I think Twitter and their future is clearly in video. We all know in the media business that ads for video definitely are worth more

than your typical text based stories and what have you. I think that is what Twitter's future -- that's where it's going to be. It's increasingly

going to be video.

QUEST: What have you bet me?

LA MONICA: I think some sort of seafood or sushi, whatever, whatever. I don't think it's going to be Salesforce. I think that was the bet. If

Marc Benioff is watching please don't buy Twitter.

QUEST: I just need a free meal out of somebody before tonight's program is over.

LA MONICA: Hopefully your next guest will bet you as well.

QUEST: As we continue tonight, it's the biggest data breach in history. Yahoo's troubles may just be starting. At least 500 million of its user

accounts have been hacked. And it's raised questions about its potential $4.8 billion tie up with Verizon.

Verizon says it learned about the breech two days before it was publicly disclosed. There is a potential out clause, of course, in the contract to

purchase, a material adverse change clause. Companies could also renegotiate to reduce the price once you bear in mind what Yahoo's

liabilities may be. And it might also result in a class action lawsuit. Kurt Wagner is senior editor at Recode. The tech news site which first

reported the story. Firstly, congratulations on reporting it. It was an excellent scoop. A straightforward question for a straightforward answer,

and I'm not betting you anything about dinner, the question is when did yahoo know about the breach?

KURT WAGNER, SENIOR EDITOR, RECODE: I wish I had the street forward answer for you. We found out in it back in August. The public did, and it's

definitely known that Yahoo knew about it long before then, but we don't know exactly how long before. A lot of this information I believe is from

2014. So have they known for two years? And if they didn't know for the last two years, then what were they doing in that time? And how did this

go unknown for that long? I wish I had an answer.

QUEST: So they are, to use the vernacular, they're screwed either way. Because if they didn't know that they had a breach in 2014, they should

have, and if they did know since 2014, then they are even deeper trouble. So it's a sort of a case a case of when did you stop beating your wife?

WAGNER: I don't know if I would use that exact example, but yes, you're right. I mean, why would they -- if they knew and they didn't issue a call

for people to reset passwords and to be aware of this. I mean this is a huge failure on the company's part in terms of protecting their users. And

as we know, Facebook, Twitter, Yahoo, these consumer tech companies, their users and the data is all that they really have.

QUEST: Let's talk quickly about the Verizon side of it. If Yahoo knew in August, and they are now saying -- I mean let's give them the benefit of

the doubt and say July, August -- and Verizon only found out when the deal was done. I mean Verizon quite rightly will be spitting feathers.

WAGNER: Oh, yes. Sources have told us at Recode that Verizon executives there are not happy with this. And in the fact that they were in the dark.

And other bidders have come forward and said the same thing. So I think when you look at what Verizon could do, I mean, this deal is not down,

right? So this $4.8 billion deal is not set in stone. So I think there will be some serious conversations left to be had.

[16:25:00] QUEST: Kurt, finally, another question I am trying to sort of understand. If this breach happened in 2014, but the data was only trying

to be flogged publicly in 2016, what was happening in the meantime? Why would the hackers wait two years?

WAGNER: Well, that's a good question and it makes me wonder if perhaps some of this data was being sold in the meantime just not publicly.

Sometimes this information is stolen by hackers because they want to turn around and sell it. So it makes me wonder if, A, was that going on just in

private, and B, did it come to a point where maybe no longer was that information as valuable to them, and so they just simply said, Well, we're

going to make it public now. That we've already gotten most of the value from the data. So if indeed the data is from 2014 and they've had for two

years, I have a hard time believing that it's just been sitting there gathering dust for the past 24 months.

QUEST: Kurt, you have been great giving us the crucial facts we need to know. Thank you, sir, for coming on tonight. And again, congratulations

for the scoop.

WAGNER: Thank you.

QUEST: If you're checking in tonight to either a Starwood hotel or a Marriott hotel or one of the 30 brands that the new company has, you're now

staying with the world's biggest hotel company. The $13 billion deal that brought together Marriott and Starwood closed today. 30 brands, 5,700

hotels, more than 1 million hotel rooms. The Marriott's chief executive, Arne Sorensen, joined me in the C-suite, and admitted -- remember he

started wanting to pay 12.5 billion. He ended up paying 13.6 billion. He had to pay more than he wanted.


QUEST: You are the largest hotel company in the world.

ARNE M. SORENSON MARRIOTT INTERNATIONAL CEO: How about them apples? Huh, it's great. I'm so excited to get this thing done, finally.

QUEST: You paid more than you wanted to, admit it.

SORENSON: We paid more than we wanted to. Or stated it differently, we had a better deal in November when we announced it than we did when we

closed it. But still a good deal. Starwood is a great company. They built tremendous brands. Great marketing, great loyalty program and we're

pleased as can be to have it.

QUEST: Your challenge now is what to do with 30 brands. Now I've read enough quotes from you that you love them all, and you're going to look at

them all. But 30 is too many, would you agree?

SORENSON: No, absolutely not. The point of this deal fundamentally is about the loyalty program and offering our loyal customers choice.

QUEST: But unless you to some extent, rationalize or at least integrate -- you're competing against yourself, which I know you've done before, and

that's not unique in the hotel industry. But in somewhere like New York, or Los Angeles, or London, you literally at the top end, the midland and

lower end, will be competing against yourself.

SORENSON: well competing against each other, but also knowing a market better and offering more choice within a market. So we have in Washington

DC and Atlanta, two markets in the United States, we've each had more than 100 hotels for well over a decade. Our hotels perform better in those

markets than where we have lower distribution. Why? Because we understand the markets better and we offer that much more choice. And when somebody

says, I'm going to Washington, they're going to go look for Marriott.

QUEST: Your loyalty program has 54 or 55 million, theirs has in the lower 20s. I assume there's a certain amount of overlap. You know yet what?

QUEST: Less overlap than we anticipated.

QUEST: Right, so basically your loyalty program is getting nearer to the population of the United Kingdom.

SORENSON: We think we'll have 85 million separately identifiable customers. You'll say, well, how can you take 55 and 25 and get 85. There

are some differences in the way it's counted, whether their actives or in actives and if they're active how recently they were active.

QUEST: So you've just gone up to the population of France.

SORENSON: So we're about 85 million. Now that includes folks who haven't seen us in a couple of years, so they're not necessarily all active. But

they are folks that we can contact and who we can know, and who we can market to.

QUEST: You will have to grow organically. I mean the regulators will absolutely never let you buy another chain again.

SORENSON: I don't know that that is the case.

QUEST: You're looking.

SORENSON: We are in a highly diverse industry. With total price transparency, and our market share in the United States will be only 15

percent. So this is nothing like the airline business. And half of those 15 percent are priced by our franchisees, not Marriott. That is not to say

were looking for another deal right now. We've got years of work ahead of us in order to integrate this and build the kind of platform that we've

think we can build.


QUEST: Arne Sorenson of Marriott, and I will be writing about that in tonight's newsletter, which is hitting your mailboxes just about now if

you've signed up for it. And you know where you sign up for newsletter. The QUEST MEANS BUSINESS newsletter is It arrives

after the New York market closes. Prepares you for the day ahead.

[16:30:02] Massive in scale, global in scope. The U.S. Justice Department is vowing to crack down on mail fraud. A special CNNMoney Investigation

revealed the companies behind the scams.


QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. We're going to be showing you a CNN investigation that

reveals the companies behind a scam global in scope. Honored for living as a goat literally. We're going to speak to the winner of this year's IG

Nobel Prize. Before all of that this is CNN and here the news always comes first.

The wife of an African-American man killed by police in Charlotte, North Carolina has released her own cell phone video of the shooting. An

attorney for the family of Keith Scott says the footage is being released because the police won't reveal and release their own video of the


The Syrian government says an all-out military offensive is under way against rebels in eastern Aleppo. Opposition activists claim, they're

saying that 150 air strikes hit the city on Friday and at least 120 people have been killed. Many others are trapped beneath the rubble.

Ted Cruz who ran to be the Republican presidential candidate has endorsed Trump. It's an unexpected reversal from Cruz who repeatedly said he would

never endorse the Republican candidate. Donald Trump says he is greatly honored and looks forward to working with Cruz for many years.

President Obama has vetoed a bill that would allow family members of the 9/11 to sue Saudi Arabia. The White House claims it could expose U.S.

diplomats and servicemen to litigation in other countries. Republican and Democratic leaders in Congress say they'll override, or at least attempt to

override the veto next week.

The U.S. Justice Department is launching an unprecedented crack down on global mail fraud. Now these are the people who prey on the desperate, the

sick, and the elderly, offering unrealistic offers. An international network of con artists and companies tricked some of America's most

vulnerable people out of literally everything they had. Now the Attorney General of the United States, Loretta Lynch, said that the U.S. government

agencies are working to shut down the scammers who have caused so much pain to so many.


[16:35:10] LORETTA LYNCH, U.S. ATTORNEY GENERAL: Their activities, the activities were here to talk about today, have cheated Americans out of

hundreds of millions of dollars. This fraud is massive in scale. It is global in scope, and it can be devastating on an individual level.


QUEST: One of the main targets of the crackdown is a Canadian payment company that's called PacNet Services. The company has now been labeled a

significant transnational criminal organization by the American Treasury Department. CNNMoney exclusively confirmed that PacNet is a key target in

this crack down. And we witnessed how countless victim's lives have been devastated by the horror of mail fraud.


ROB COLLINS, FATHER HAS GIVEN THOUSANDS TO MAIL SCAMS: The people who do this to people, they don't have enough prisons for you guys.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT (voice-over): Rob Collins says mail fraud scams drained his dad's life savings.

COLLINS: He was spending all of his check each month on these sweepstakes and the psychics.

Hey dad.

Every time he called me, "I'm winning $10 million, $15 million. I'm winning a new Mercedes."

ROMANS: He would send checks to claim his prize.

COLLINS: Have you ever gotten any money back?


ROMANS: Jennifer Bell saw the same thing happen to a relative.

JENNIFER BELL, RELATIVE GAVE LIFE SAVINGS TO MAIL SCAMS: She actually took out a reverse mortgage on her home so she could continue to give more money

to scams. She had given away the entire value of her home, approximately a hundred thousand dollars.

ROMANS: The scams varied, but many had one thing in common.

BELL: When we went through her bank accounted, I kept noticing these little $25 checks. But I noticed they were all processed by one company

called PacNet.

She was sending money to a different person. But the processer was always the same.

COLLINS: I saw that PacNet on lots and lots of checks.

ROMANS: PacNet is a payment processer. It says it does everything in its power to prevent fraud, but our investigation finds that while it does work

with legitimate businesses, it has processed payments for an alarming number of scams that have faced serious government actions.

Here's how it works. Global fraudsters need a way to stay under the radar and bring in money from victims in all sorts of currencies. That is where

companies like PacNet come in.

PacNet cashes checks for clients under its name and takes its cut of course. PacNet says it is a victim too and cuts ties when it is alerted to

anything illegal. But that's little consolation for some families.

BELL: Literally to have all of her money suck away from her systematically by scammers. It's just devastating. There is no house. There is no

nothing. You know, she didn't have a proper funeral. She didn't have any of that. All she had was junk mail.


QUEST: Investigative reports stems from months long investigation into PacNet by our CNNMoney writers, Blake Ellis and Melanie Hicken, who joins

me now in Washington. Good to see you both. Superb report there. So Blake, from what I understood of this there are really two sides to this.

There's the fraudsters and then there are those companies that if you like, inadvertently or middle men facilitate the fact that it can happen and the

fraud can take place. Is that right?

BLAKE ELLIS, CNNMONEY INVESTIGATIONS, SENIOR WRITER: Yes, exactly. So there are the fraudsters are the ones who perpetrate the frauds and the

scams that are preying on elderly victims all over the world. And then there are the payment processors like PacNet, which the company we looked

into, that are cashing those payments. And without the processors, the scammers would never be able to get the money from victims.

QUEST: It all begs the question then, doesn't it to some extent, of how much, whether it be PacNet or any other payment processor, how vigilant

should these companies be against the large number of checks that they must receiving?

MELANIE HICKEN, CNNMONEY INVESTIGATIONS, SENIOR WRITER: Yes, well I mean they're there are warning signs, there are key warning signs that banking

officials have supposed to look for. A large number of small deposits. There are a lot of returns from unhappy customers. Our understanding is

many of the schemes involved may have had some of the warning signs. But was interesting is the U.S. government has gone even further than that to

say that not only was PacNet cashing the checks, but they were actively helping their clients evade authorities. So the U.S. Treasury Department

has said that PacNet executives were lying on custom forms, routing checks through secret bank accounts. It went beyond what the typical banking

official would be doing.

[16:40:04] ELLIS: But it is interesting because PacNet has said to us that it has never knowingly processed payments for scammers. But what we found

was something completely different. We found scam after scam that was processed by PacNet. And the government found that they very much

knowingly were processing these payments.

QUEST: Even, let's give PacNet the full benefit of the doubt here, even if they were unaware initially, certainly later on they were made very well

aware on numerous occasions, if I'm right, Blake, They've been made very well aware that this was going on. And do not seem to have taken steps to

stop it.

ELLIS: Yes, well even with the Maria Duval scam that we talked to you about a while back, the government found that they had been warned by a

State Attorney General that about the Maria Duval scam and about complaints that they had gotten, and even after that, PacNet continued to process

payments. We found so many examples of scams where there were these government warnings. There were criminal actions against these scammers,

and PacNet continued processing payments for them.

Melanie, to some extent you can't completely protect people totally from against themselves. These scam artists are out there, hearing the report,

it's tragic a woman managed to fritter away the value of her house, but I'm not sure what society does to protect people from themselves.

Well, what we've heard from family members, the advice that they would give so that other people aren't in their shoes is, these victims tend to have

dementia or Alzheimer's. And so they don't realize what they're doing. So family members we've talked to have said I wish I would have tried to get

power of attorney years ago. I wish I had paid a little closer attention. It's a delicate topic. People don't want to ask their parent to hand over

their checkbook. But a lot of the victims we've talked to had said they wished they had that tough conversation years ago.

A British classic in Chinese hands. The carmaker MG is moving all of its manufacturing to China. We're going to hear from a member of Parliament

who says MG is making a wrong turn.


QUEST: MG, the very name conjures up the iconic vehicle, a statement of motoring at its best in the British style. Now they will no longer be made

or at least the cars will no longer be made in the United Kingdom, total production of the MG is moving to China. Now MG, it's spiritual home has

always been Longbridge in Birmingham.

[16:45:01] The plant of course has been making automobiles for decades, a vast number of Austins, British Leylands in the 1960s and 70s. It opened

in 1905 and of course then now it is owned by Nanjing Automobile Corporations, a Chinese company,

but in the U.K.

Well if you step into the production line I will be able to show you exactly. Now first made engines for some of MG's most famous cars. Look

at that. Get right in there, the MGA in the 1950s. That's what you call a true motorists delight.

And there on the production line, well, they state getting a little more utilitarian and a bit more ordinary, the MG 1100. Arguably one of the

first built in Longbridge in the 1960s. and funny enough the year I was built.

In 2005 though MG Rover entered administration. The company moved on and you have them continue and it is now owned now by SAIC, China's largest car

maker. In 2011 you have the MG 6, the first new car launched in the U.K. for some 16 years. And these are the two cars currently operated at that


The MGG S and the MG 3. 2015 was the most successful year to date. Most cars are sold abroad. But the question of course is how much of the car is

actually manufactured in the U.K. versus merely assembled at the Longbridge plant.

Well, the whole thing is hugely disappointing bearing in mind the great mark of MG to have such a decision. Those are the words of Richard Burden

a British member of Parliament from Birmingham Northfield who joins me now from Longbridge via skype.

Sir, thank you. There was an inevitability about this wasn't there in the sense that the cars were really only being assembled there. The parts were

already being imported to a large extent. It was only a matter of time before the Chinese decided to make the cars and just ship them in.

RICHARD BURDEN, MINISTER OF PARLIAMENT, BIRMINGHAM, NORTHFIELD: I'm not sure that is true. That is certainly the case, but the assembly at

Longbridge these days is very, very different from the heritage that MG and Rover before it had at Longbridge. It's not been a manufacturing plant.

But as you said in your introduction there. The thing about Longbridge is it is part of the spiritual home of that mark. And that is why I think it

is a bad move for the Chinese company to cease all assembly there. I think the main point that I and others has been making to them is they're doing a

lot of good work there, they are doing research and development there. A lot of technical stuff. Let's talk with them about how we can add value to

that. And then look at the issue of assembly after that.

QUEST: Right. On that point --

BURDEN: They have done it the other way around.

QUEST: But there is still going to be that other work done and that design, the work being done there, and to some extent the inevitability is

the shifting to the lowest common factor of the actual assembly whether because the goods are already being manufactured there or it is simply

cheaper to make the cars there.

BURDEN: Certainly they're facing big cost pressures. The site they're operating on

at Longbridge is far too big for the scale of operation they're doing. And because they import the kits, if you like, of those cars. The value of the

pound has dropped, a lot of that to do with the result of the referendum on the EU.

And that has added to their costs a lot, so I do understand their problems, but I worry about what they're doing, it is because having a base of

manufacture or at least assembly in the U.K. and in Longbridge is important to their brands. They're not doing their own brand any favors by

jettisoning until we're able to talk to them about how we can add value to the really good stuff their doing there on research and development.

QUEST: Well, anyone who remembers Longbridge from the big days of the rallies outside to the marvelous days of manufacturing, sir. I can well

understand why you are putting up such a strong fight. Thank you for joining us tonight on this Friday, I really appreciate it.

BURDEN: Thank you, very much.

QUEST: As we continue after the break, if you have ever wondered what it was like to be a cat or a dog for a day, we will introduce you to the man

that lived as a goat and who won an award for doing so. Well, I promise it is all about making, creating, and innovating.


QUEST: Here on QUEST MEANS BUSINESS we do a lot of thinking and quite a lot of laughing. Well, the IG Nobel prizes honor achievements that make

people do exactly that. They laugh and then think. And we wanted celebrate with them also after the 2016 winners were announced last night

at Harvard, the IG Nobel. These were our favorites. In the field of economics, Sarah Forbes and Mark Avis for their work on assessing the

perceived personalities of rocks. From a sales and marketing perspective.

Them you have the field of chemistry, slightly more tongue in cheek, Volkswagen for solving the problem of excessive automobile emissions by

producing fewer emissions when the cars are being tested. I am sure they weren't laughing about that in Germany. It is either magic or cheating

depending on your point of view.

And then the field of biology. Thomas Thwaites for creating prosthetic limbs that allowed him to live with and understand the movement of goats.

And for that he won the IG Nobel award. And the IG Nobel award winner Thomas Thwaites joins me now.

Sir, I mean, congratulations. I --


QUEST: Why did you want to live as a goat for three days and what did you learn?

THWAITES: It is not as strange of a thought as it sounds.

QUEST: I assure it is, sir.

THWAITES: Maybe we need some introduction. I think we may have all had a thought like that, you know, certainly when I was a child, I can remember

wanting to be the pet cat or something so I didn't have to trudge off to school. I think at root it was this, I was going through a bit of a slump,

a down patch in my life, and I guess that thought recurred, wouldn't it be lovely to take a holiday from all of this become a goat.

QUEST: Of all of the animals you choose, why a goat?

THWAITES: Actually, I started off wanting to become an elephant, but after a bit of research, it became clear that -- I mean, it became clear that

elephants, I don't know, they're almost a bit too human. They eat with an appendage, so I wanted to get away from that experience, and also they sort

of seem to understand their own mortality, they're kind of -- I wanted to escape from those thoughts on my own mortality. I just wanted to be.

QUEST: So my final question, sir. What did you learn from this? Because the IG Nobels have a serious underlying point to them. Besides the good

laugh that we had. What is did you learn?

THWAITE: I think it was a philosophical investigation. I think it was more a kind of a reminder that we are nothing but animals, ourselves.

Despite all of our kind of wondrous sort of -- our wonderful minds, or wonderful brains. We are at root animals as kind of fallible and

irrational as any other of the creatures on the planet.

So possibly more of a philosophical investigation, but if you want something a bit more kind of factual, well, I learned all about the tastes

of different kinds of grass in a pasture and I learned to be a bit of a grass connoisseur.

QUEST: Sir, we're very grateful that you're back on two feet. Congratulations, on your IG Nobel. Next time I'm in the U.K., I insist we

get together to discuss more about living as a goat. Thank you, sir, good to have you on the program.

We'll have a Profitable Moment after the break.


QUEST: Tonight's Profitable Moment. Marriott is now the largest hotel group in the world. And in doing so we need to remember, of course, that

the biggest is not always the best. Arne Sorensen talked about that very point to us this evening.

But even so, the sheer size and scale of Marriott is now mind boggling. The largest with over a million rooms where you can stay. It is almost

enough to make you want to be a goat. That's QUEST MEANS BUSINESS for tonight. Whatever you're up to in the week ahead, I hope it is profitable.

I'm away next week, I'll see you when I get back. Have a good week.