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Passengers Sickened from Deicing Chemicals; Former Child Actor Killed in Standoff; Walgreen's Ordered to Pay Back Millions to Feds

Aired December 24, 2008 - 13:00   ET

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

(BEGIN VIDEOTAPE)
RICHARD LUI, CNN ANCHOR (voice-over): It's no sweat for Santa, but those of us who travel by plane or train or car keep finding winter in our way. Don't tell these folks it's a wonderland.

It could be worse. All that snow and ice and slush could be sludge. It is a nightmare come true in Tennessee.

And quite a few politicians may be waking up to coal in their stockings this year, but who is No. 1 on the naughty list? You be the judge.

(END VIDEOTAPE)

LUI: And a very good day to you. I'm Richard Lui in for Kyra Phillips today. We're live at CNN world headquarters in Atlanta. You're in the CNN NEWSROOM.

First off for you this hour, we are following a developing story out of Seattle, a medical emergency at Sea-Tac airport there that has affected dozens of passengers on an Alaska Airlines flight.

The 737 was at the gate prepping for takeoff at the time, and apparently, some of the chemicals used to de-ice that plane got sucked into its ventilation system. Fumes then started irritating eyes. Passengers were getting sick. Several people had to be taken to the hospital.

All right. Let's drill down a little bit more. We've got more of the issues behind the symptoms as these chemicals were ingested, or rather inhaled by some of the people.

Medical correspondent Elizabeth Cohen, what do you got on it?

ELIZABETH COHEN, CNN SR. MEDICAL CORRESPONDENT: Well, you know what? The chemical that is often used in de-icing, one of the standards here, is called propylene glycol, and it can cause problems when inhaled.

There was a Swedish study that found that when people inhaled propylene glycol for just a minute, one minute, some people developed trouble breathing. They had trouble, upper respiratory irritation. They had trouble with their eyes. And we don't know how long these people were breathing it in. Now, propylene glycol is, indeed, safer than some of the chemicals that used to be used, but again, can still cause some upper respiratory irritation.

LUI: And Elizabeth, does everybody react to this inhalation of this chemical the same way?

COHEN: They don't. Actually, the Swedish study took a look at that, and what they found was that some people were hypersensitive to it. They actually had much more trouble breathing.

And of course, if you already have asthma or some disease like that, then breathing this in could be even more problematic.

And one thing that's interesting when the Swedes took a look at this issue, is that even perfectly healthy people developed irritation when they breathed this stuff in.

LUI: No doubt. It's used for de-icing and not to be inhaled.

COHEN: Right. That's not its purpose. Right.

LUI: Elizabeth Cohen, thank you so much. I know we're early in on this.

COHEN: Thanks.

LUI: You know, the down side of a white Christmas, with just hours to go before the gifts are opened and the turkeys are carved, thousands of travelers still trying to make their way home for the holiday.

It's been a mess all week, with ice and snow in much of the country. And today, more of the same. In the northeast, including New Jersey, some slick roads are making for some very slow going for folks.

The nation's air traffic also snarled again with some long delays and more cancellations at O'Hare in Chicago, for instance. Five hundred travelers had to spend the night there last night. Big delays are also reported in Cleveland and Newark, New Jersey.

Then we take you to Indiana. Icy roads there are making Christmas travel treacherous and difficult, no doubt. The 30-mile stretch of Interstate 69 had to be shut down for about four hours, but it's now open again.

And then for the weekend for you. A flood threat in Indiana when heavy rain is expected to move in there. They're concerned about flooding.

So Chad Myers is putting this all together for us, watching it for us at the CNN weather center.

And, Chad, you have to have, like, ten eyes to be watching all this. (WEATHER REPORT)

CHAD MYERS, CNN METEOROLOGIST: Tower cam out of New York City right now. Here's part of the problem why New York City and the airports are a little bit slow, because you just can't see very far. We tilted our camera down so you can see the park. But if that camera would tilt back up, you can barely see Harlem there. About three miles of visibility at JFK, at Newark and also at La Guardia -- Richard.

LUI: So a headache there, Chad. It could be worse, I guess?

MYERS: You know, I've seen many, many worse days than this. And so -- and we've had so many days to travel.

LUI: Right.

MYERS: This isn't the busiest day. Sunday will be the busiest day, I think: everybody trying to get home on the same day. But we've had Saturday, Sunday, Monday, Tuesday, Wednesday. There's been enough days to travel. People have spread out to get there day.

LUI: Very good point. Folks are just going to have to stay in and enjoy their holiday season today and tomorrow with all that cold weather outside.

All right, Chad. Talk to you in a little bit.

MYERS: I'll be here.

LUI: Appreciate it.

You know, this blast of winter weather that Chad's been telling us about is causing problems from coast to coast. Let's go to one of our i-Reporters, who's sending us their videos and photos.

And this scene from Shannon Nesbit in Brockport, New York. The snow is so heavy here it takes bulldozers to move it out of the way. Forget the shovel.

Then there's i-Reporter Adam Rudin (ph), who sent us these pictures of some of the trouble he encountered en route to Newark's airport last night. A couple of folks there. Huh? The transit trains were obviously packed.

And then because of the bad weather, some commuter trains out of New York's Penn Station to the airport, also canceled. Passengers also had trouble catching terminal shuttles to their gates.

And, of course, be sure to send us all your video and photos like that. Some really good i-Reporters sending us their experience. CNN.com i-Report there for us.

You know, a Canadian woman who spent several days in a snowy field says her faith kept her alive. Donna Molnar got caught in a blizzard Friday after going out to buy some groceries. Her car was found the next day, but search teams could not get it out until Sunday. Rescue dogs found Molnar Monday, buried under heavy snow.

(BEGIN VIDEO CLIP)

SGT. MARK COX, HAMILTON POLICE: I can honestly say that I didn't expect to find her alive, but the hope was there, and that's why we keep going.

DAVID MOLNAR, HUSBAND OF RESCUED WOMAN: It's a good Christmas for us. It's the best Christmas gift ever. Certainly could have been a lot worse.

(END VIDEO CLIP)

LUI: Now, Molnar has frostbite. She's in a hospital in serious but stable condition.

Incredible pictures out of east Tennessee for you. A neighborhood there now looks like a lunar landscape. Some 400 acres covered with sludge after a retention wall at a power plant was breached.

Now, the sludge contains waste from the coal fire plant above. It floated downhill out of a holding pond, destroying three homes and damaging a dozen more.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Such a disaster. It's an absolute disaster.

UNIDENTIFIED MALE: Sludge, ash, whatever they want to call it. It's pretty much everywhere.

UNIDENTIFIED FEMALE: I think the worst part is the stuff that we can't see. The houses that are washed away that we can just see pictures of from the helicopter.

UNIDENTIFIED MALE: When it blew, it rushed way down one valley, and then back flowed back out, and then came down here and took everything else with it.

(END VIDEO CLIP)

LUI: Wow. All right. Well, the sludge also ran off into a river that supplies many towns' drinking water. Environmental officials are waiting on results from water quality tests on that.

Caught up in a real nightmare commute. Yesterday's water main break outside D.C. trapped at least nine people in their cars and some of them up to one hour as the icy water rose around them. In some of the 911 calls, you can hear the panic.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: How many people are in your car?

UNIDENTIFIED FEMALE: Just me! UNIDENTIFIED FEMALE: Just you? OK.

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Can you -- you can't get out of your vehicle?

UNIDENTIFIED FEMALE: No, I can't. The water's -- it's going to drop me...

UNIDENTIFIED FEMALE: OK. How high is the water in your car, ma'am?

UNIDENTIFIED FEMALE: Ah...

UNIDENTIFIED FEMALE: Where's the water to now?

UNIDENTIFIED FEMALE: It's all over my car. Please...

UNIDENTIFIED FEMALE: Ma'am, ma'am, listen to me. OK? We have help on the way. I need you to try to stay calm. OK? Where is the water in your vehicle? How high up is it in your car?

UNIDENTIFIED FEMALE: It's all the way. It's getting all the way.

UNIDENTIFIED FEMALE: OK. I understand you're saying all the way. Can you give me a reference? Is it up to your knees? Is it up to your waist?

UNIDENTIFIED FEMALE: No, just all over. I can't explain. I just need you to help, please.

(END VIDEO CLIP)

LUI: Some of that water as high as four feet. Average car height about five. You can imagine some of the stress they had, described in that call at least.

And that lady, by the way, and everyone else made it out OK, in case you wanted to know, but rescuers had a real tricky time navigating huge chunks of asphalt and other debris along the way.

A couple pulled from their car talked about those first moments things went wrong with CNN's John Roberts.

(BEGIN VIDEO CLIP)

JOHN ROBERTS, CNN ANCHOR: What did you start to see and what did it suddenly develop into?

UNIDENTIFIED MALE: Well, I tell you what. Maria told me that she saw some leaves, or like debris, like somebody was blowing leaves, and then suddenly, we saw mud and raging water coming down. And the car stopped. Both cars on River Road stopped, and then the mud and the rocks and the debris started to make our cars skid sideways. (END VIDEO CLIP)

LUI: And utility officials still do not know what caused that break.

Holidays or no, U.S. citizens still are not spending like we used to, evidently. We learned today that November was the fifth month in a row that consumer spending has gone down, and that's the long slump in 50 years of recordkeeping.

But that's only half the story for you. Last month's decline was due, in large part, to a plunge in gas prices. Factor those out, and spending actually rose 0.6 of 1 percent. Incomes dropped last month for the first time since July. And that's a result of growing unemployment.

And yet another figure for you: 586,000 first-time claims for jobless benefits. That's up 30,000 from the year before. And that's a much larger increase than experts had originally thought.

You know, it's a short day of trading that just came to a close, amid a slew of really lousy economic news. Alison Kosik is at the New York Stock Exchange with the latest on that.

Hopefully, despite all that bad news, Alison, folks still had a bit of a smile on their face?

ALISON KOSIK, CNN CORRESPONDENT: A bit of a smile here today, Richard.

You know, as you said, there is lots of lousy news out there, but investors chose to see the glass half full today, and as you said, a few reports came out today. Weekly jobless claims rose to a 26-year high. Personal spending fell for a fifth straight month in November. And orders for big ticket items, like TVs and washing machines, slumped 1 percent last month. And while weak, the drop-off in orders wasn't nearly as bad as expected.

Here on Wall Street, you can't call it a Santa Claus rally today, but in these tough times, I'll tell you, we'll take even a small gain ahead of the Christmas holiday.

And at the close of this shortened trading day, on light volume, take a look at the numbers. The Dow Industrials added 47 points, snapping a five-session losing streak. The NASDAQ and S&P 500 managed to hold small gains, as well.

The exchange will be closed tomorrow for the Christmas holiday. A full day of trading resumes on Friday -- Richard.

LUI: Alison, we'll call it a mini Santa Claus rally, or a Santa Claus elf rally? Right? We'll take it, though.

KOSIK: That sounds -- that sounds fair. Definitely.

LUI: Hey, you know, Alison, we noticed something as we watching what was happening down on the floor today. Some singing. Let's take a listen to this first.

(BEGIN VIDEO CLIP)

(MUSIC)

(END VIDEO CLIP)

LUI: Alison, aren't they supposed to be working, trading? They're out there singing? What's going on here?

KOSIK: Yes, there was hardly any working going on today. That song that you heard is called "Wait 'Til the Sun Shines, Nelly." Traders have been singing it since the Great Depression. They sing it every year on Christmas Eve and the last trading day of the year, which is usually New Year's Eve.

It's a song about hope for better times. It was appropriate during the Depression and, sadly, it resonates today, as well. The song was written in 1905 by the brother of the person who wrote another classic we all know and love, "Take Me Out to the Ball Game."

LUI: Ah. You good at a cappella? Want to do a couple bars here with "Just Wait Until the Sun Shines, "Nelly"?

KOSIK: You first, Richard. Go right ahead.

LUI (singing): Wait until the sun shines, Nelly.

KOSIK: There you go. We'll leave it there.

LUI: We'll leave it there. We better. OK, Alison Kosik there. Thank you so much. Have a good one, by the way.

You know, if you get a check out this month, out of the blue, from Wachovia Bank, cash it, deposit it. Just don't assume it's a fake or a fraud and trash it.

Wachovia's mailing out more than 740,000 checks worth more than $150 million to people who ordered from certain telemarketers between 2003 and 2007. And it seems the marketers and/or their payment processors stole from customers' bank accounts, and because the company's kept accounts at Wachovia, the bank was on the hook. The payoffs are part of a federal court settlement.

So bottom line here: the checks are for real and the timing, so far as we know, just a coincidence.

A heartwarming homecoming just in time for the holidays.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: For her age, it's beautiful. Because she's 4, and she's very determined to do what she did. And for me to see it finally, it's breathtaking.

(END VIDEO CLIP) LUI: A U.S. soldier returns from Iraq and Afghanistan to see her young daughter walking and talking for the very first time. We'll show you their touching reunion.

And who's been the naughtiest this year in the world of politics? We'll tell you who tops the list in our new poll.

(COMMERCIAL BREAK)

LUI: A huge company over bills Uncle Sam. We're talking billions of dollars here. And guess who blew the whistle? The guy in the back, filling prescriptions, and getting a law degree on the side.

(COMMERCIAL BREAK)

LUI: You know, quite a shock for Dallas police to realize here their suspect in a fatal shooting spree used to be on their side of the law.

Brian Smith was a Utah state trooper until his resignation earlier this year. He's in critical condition today after shooting himself in the head during a standoff with police. Cops say ballistics evidence linked Smith to at least one of two rush-hour murders on Monday.

(BEGIN VIDEO CLIP)

LT. CRAIG MILLER, DALLAS POLICE HOMICIDE UNIT: At this time we don't feel there's a threat and that people don't need to be concerned about being on the freeways, and it's safe to be out and about as you're doing your Christmas shopping.

(END VIDEO CLIP)

LUI: Now, according to Texas and Utah police, Smith became addicted to painkillers after an accident on the job.

California police have released the name of the man killed in a standoff near Los Angeles yesterday. Thirty-eight-year-old Manuel Benitez was a former child actor who went by the name Mark Everett. He was wanted in connection with the killing of his girlfriend four years ago.

KCAL's Suzie Suh has more on the hostage ordeal.

(BEGIN VIDEOTAPE)

LT. LIAM GALLAGHER, LOS ANGELES COUNTY SHERIFF'S DEPARTMENT: The suspect claimed that he was going to shoot it out with the police, claimed he was going to kill the child, harm the child.

SUZIE SUH, KCAL REPORTER (voice-over): In the middle of a busy shopping plaza, a hostage situation shut down streets, evacuated businesses.

UNIDENTIFIED MALE: We closed the doors. SUH: And stunned witnesses.

UNIDENTIFIED MALE: It was kind of scary. Because, you know, everybody with guns and everything.

SUH: Police responded to a report of a suspicious person who appeared to be a transient walking with a little boy on an El Monte sidewalk.

GALLAGHER: He produced a handgun. He moved the child that he had in his hand, was holding by the hand, between himself and the officers.

SUH: The man reportedly took the 6-year-old boy into the Tai Pan Chinese restaurant and barricade himself in the bathroom.

GALLAGHER: He had a semiautomatic pistol and a revolver.

SUH: After two hours of trying to negotiate with the man...

UNIDENTIFIED MALE: There was a couple of bangs.

SUH: ... a SWAT team went in to rescue the boy.

GALLAGHER: There was an exchange of gunfire. The suspect was hit and killed at the scene.

SUH: The boy was also hit. It's unclear if he was wounded from the man's gun or police gunfire.

(END VIDEOTAPE)

LUI: Police say the boy, Benitez's son here, is expected to recover. Authorities also are looking for his mother. That's Elizabeth Velasco.

Santa knows it already, and he's got lumps of coal with their names on them. He knows these folks. But do you know who has been naughty and who has been really naughty this year in politics?

(COMMERCIAL BREAK)

LUI: Walgreen's has paid back millions of dollars for over billing the government. The company says this error is now fixed, but it might never have come to light if a pharmacist there did not put his new law degree to good use.

Here's Drew Griffin from CNN's special investigations unit.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): They were co-workers first, then friends. And it wasn't long before they realized they were unwittingly involved in massively overcharging Medicaid, their own company over billing for hundreds of thousands of prescriptions. NEIL THOMPSON, FORMER WALGREEN'S PHARMACIST: I saw these reimbursements coming up higher, because they actually printed out, and you actually saw hard copy come out of the computer as to how much it should be, and I knew that wasn't right.

GRIFFIN: Neil Thompson and Dan Buerance worked at this Walgreen's pharmacy not far from downtown Minneapolis, and as they worked here, they say store owners used an internal billing system, automatically double charging Medicaid for prescriptions. Troubling enough to Neil Thompson, but even more serious when he saw it happening all over the state.

THOMPSON: I floated at 97 different Walgreen's pharmacies in the Minnesota area and identified these claims starting to get done wrong all over the place.

GRIFFIN: Both say they alerted their superiors. Dan Buerance was alerted by e-mail from one of them, that it was basically none of his business.

DAN BUERANCE, FORMER WALGREEN'S PHARMACIST: You need to do it this way. Do not ever change this cash price, period. And so it was three times, which I went to my immediate supervisors. And each time I got kind of the door slammed saying, "You know, just do it this way."

GRIFFIN: Now the twist. While Walgreen's was double billing and ignoring warnings from its own pharmacists, one of those pharmacists, Neil Thompson, was studying law. He graduated with a law degree. And his first case, you might say, was blowing the whistle on his own company.

THOMPSON: Dan produced most of the evidence. We had paper copies of all of these over billed claims. We carefully redacted them to make sure there was no patient information on them and turned those over to the government officials.

GRIFFIN: It took nearly three years working with the FBI and the U.S. attorney's office undercover, you might say, because Dan and Neil were still working on the inside. Then Walgreen's found out.

So early in 2005, the two pharmacists filed their own suit, a false claims act that would give them some of the money if Walgreen's had to pay up.

BUERANCE: It may be $3 here, $10 here, but at the end of the day, we're talking millions of dollars.

GRIFFIN (on camera): It actually turned out to be $10 million. That's how much Walgreen's had to pay back the U.S. government and four states for the over billing.

Walgreen's never admitted any guilt, and said it had already fixed the internal billing problems, which it called inadvertent.

(voice-over) The company claimed the errors happened because of their unique requirements when Medicaid is billed as a secondary insurer, and resulted in both under billing and over billing.

But this wasn't the only time Walgreen's had run afoul of the government. Just last June, the drugstore chain paid far more in fines: a total of $35 million to the federal government and 42 states, all because of disputes over Medicaid reimbursements. Again, it called them inadvertent billing errors.

THOMPSON: They know more about pharmacy billing than anybody, and anybody can get it correct. It should be somebody like that.

GRIFFIN: Overall, for the fiscal year that ended last October, the government says a total of $358 million was falsely billed to Medicaid nationwide. And that's only the amount they know about.

Drew Griffin, CNN, Atlanta.

(END VIDEOTAPE)

LUI: The mind of Madoff. How could one man allegedly dupe so many smart and successful people out of so much money? We've got some clues.

(COMMERCIAL BREAK)

LUI: And it is 30 minutes after the hour. We hope you're having a great day before Christmas, if you celebrate it. Here are some of the stories that we're working on for you, right here in the CNN NEWSROOM.

It is a busy, frustrating Christmas eve, as airports, as well as on roadways across the nation. Thousands of travelers are still trying to make their way home. You got it. Cold, wet, snowy stuff. Weather is not helping very much.

Of course, then there are dozens of passengers on an Alaska Airlines flight at Sea-Tac Airport that had a bad start to their flight. Some of the chemicals used to de-ice the plane got sucked into the 737's ventilation system making passengers ill. Several were taken to the hospital.

And the pulse of the economy feels a little weaker today due to some dismal new numbers. Today we learned that jobless claims rose more than expected. Last week's claims, the highest in more than 26 years.

All right. What a mess on the ground and in the air as Christmas travelers try to make it home for the holiday. Chad Myers is watching it all for us in the CNN weather center right now.

And Chad, you're not only watching that, it looks like those delays are starting to get going now?

MYERS: Yes. In the New York area they are starting to build, 15 minutes at a time.

What you're doing -- if you're sitting at the airport right now -- well one, send us an i-Report and tell us about your story -- but you're seeing your plane go from a 3:00 departure to 3:15, to 3:25. And then all of a sudden you go, am I really going to get on that plane? Is it going to be canceled?

Airlines do not like to cancel flights. Trust me. I know you think oh, they'll cancel it because it's easier. No, they need that plane where it needs to be. So that's why not as many planes get canceled as you might think, especially on a day like today. They will be slow but most of those planes will certainly get in the air, if they can. Certainly no forward cancellations if they don't have to. They want to get you there for sure.

We've been talking about how bad of a year it's been out there. People having trouble buying presents and all that kind of stuff. But I'll tell you what, we've got our Santa tracker out here, Richard. And Santa has been back to the North Pole three times to reload the sleigh. So I think the elves were doing maybe some extra work up there --

LUI: O.T.

MYERS: O.T. -- right now, Santa is in Mumbai, India. It used to be called Bombay. You'll see him fly all the way through Europe and down through Africa. And then eventually, probably 6:00, 7:00 tonight, he's going to head over the Atlantic Ocean, and you better be in bed by then. Got to get to bed early tonight -- Richard.

LUI: He's got that overdrive working for him, I guess? The jet engines, the whole nine yards.

MYERS: Usually we see him go back and reload a couple times. But not three times already. So he is. Those reindeer are working hard today.

LUI: Santa tracker, Chad Myers, thank you so much. Appreciate it.

MYERS: You got it.

LUI: All right. Chad of course will be back with more on the weather for us, as well as Santa.

This blast of the winter weather that Chad has been telling us about today is causing problems from coast to coast certainly. And our i-Reporters are sending us their videos and photos.

Just take a look at this video sent in by one of our i-Reporters in Washington State.

(BEGIN VIDEO CLIP)

HILLARY OHM, IREPORTER: I've been around snow all my life and I'm not that easily impressed. But this is getting ridiculous. The snow is still falling lightly and there are more predictions for the coming days before Christmas. And I just thought you might like to -- to take a look at what we've got out here in eastern Washington. I've got to go take out the garage. So I'll be back.

(END VIDEO CLIP)

LUI: All right. Great report, by the way. Thank you so much.

A snowstorm this big in Washington State is a rarity, by the way. And more winter weather is heading that way. Send us your videos and pictures to ireport.com. We love all of them. That was great one for instance.

In this winter storm season, a lesson learned the hard way. A Massachusetts man trying to melt ice on his porch set fire to an apartment building. And authorities say the man was using a homemade device a hose and nozzle attached to a propane tank. No injuries were reported, but the families in the three apartments that were damaged had to move out.

Autopsy results are due next week on the New York financier who apparently committed suicide over the Madoff scandal. 65-year-old Thierry de la Villehuchet was found dead yesterday in his locked office with slashed wrists and staggering losses on the books of his hedge fund. Now Villehuchet's firm says it lost $1.5 billion of clients' money in the $50 billion pyramid scheme allegedly run by renowned investor, Bernie Madoff. He is under house arrest awaiting trial.

Even by the standards of Wall Street what Madoff allegedly pulled off was huge until it came crashing down. At its core, it's pretty simple. But as we hear now from CNN's Allan Chernoff, the same cannot be said of Bernie Madoff.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: In the Wall Street world of big personalities, Bernard Madoff did not stand out. He was low key, understated, his business card had no title. Friends say he was shy. But inside was the drive of a highly competitive person.

DR. ALDEN CASS, PSYCHOLOGIST: There is a need to prove to the world that I am somebody powerful; I am so intelligent; I am so respected by the rest of the world.

CHERNOFF: Madoff earned respect. In the 1970s and '80s he built an innovative high-tech trading firm correctly anticipating that the buying and selling of stocks would become computerized. The Madoff firm traded for big retail brokers like Fidelity and Charles Schwab, stealing volume from the New York Stock Exchange.

He impressed trading expert Jim Angel.

PROF. JIM ANGEL, GEORGETOWN UNIVERSITY: Here was a very intelligent man who knew the business very well and who also was very driven to succeed.

CHERNOFF: Madoff was successful, but matching buy and sell orders is not a glamour job on Wall Street, not like managing other people's money. He bolstered his reputation by becoming non-executive chairman of the Nasdaq stock market in 1990, '91 and '93. At that point, Madoff was earning tens of millions of dollars. He owned properties that dwarfed his 1970s home in Rosalind, New York.

ANGEL: Here's somebody who didn't need to start a scam to become a multi-millionaire many times over. And yet apparently, there must have been some flaw in his makeup that led him to get into this mess and to dig himself in deeper and deeper.

CHERNOFF: Madoff graduated in 1960 from Long Island's Hofstra College, before it became a university, with a major in political science. One investor told the "Wall Street Journal" that Madoff confessed to him this year, "I wish I had gone to Wharton or Stanford."

Madoff lacked a pedigree. He was not an alumnus of a prestigious school. But at the Palm Beach Country Club and other social circles, he created and aura of exclusivity by selectively choosing whose money he would manage, in effect creating a velvet rope like a chic nightclub.

JERRY REISMAN, ATTORNEY: Madoff made it feel as if it was an exclusive club. And that's how he sucked his people in, that's how he got them to go into it this. And it was a fantastic, brilliant job of marketing.

CHERNOFF: Madoff reported steady annual returns, 10 to 18 percent, year in, year out, never seeming to lose.

CASS: That determines whether you're a success or failure. They get the identity from how solid their returns are.

CHERNOFF: Bernie Madoff joined the board of Yeshiva University, then became chairman of its business school. His prominence kept investors from questioning his success, even those whose monthly statements were pure fiction.

Last month, Madoff even reported to them that cash was held in Fidelity's Spartan U.S. Treasury money market fund. Fidelity says it hasn't had a fund by that name for three years.

(END VIDEOTAPE)

LUI: All right, Allan joins us now live.

Allan, so we started by talking about de la Villehuchet, a big financier who was brought into this. What's the full extent of the losses that you know about right now?

CHERNOFF: Richard, the truth is nobody knows exactly how big the losses are. We've heard the number $50 billion. That number actually comes from Bernie Madoff himself. That's what he told his two sons when he admitted it to them. When he spoke also to two FBI investigators he said that he had lost at least $50 billion. Now, it does not seem at all that's the original investment that had been made. Maybe that's a number from the peak, maybe that's a number Madoff made up when he registered with the SEC finally two years ago as an investment adviser. He said he was managing $17 billion. But, again, that's from Bernie Madoff.

The numbers we have from people who have admitted to losing money with Bernie Madoff, those numbers are in the billions. Well over $10 billion. We don't know yet the full extent. Not everybody has come forward.

LUI: And what an extreme case, as you outlined for us, at least in the numbers. But Allan, also, the dynamic as we move to how this happened or why it happened. And Bernie Madoff -- the comment was made about a personality flaw.

Is this something that is commonly seen in such big finance folks?

CHERNOFF: Well, I don't think you can say that it's commonly seen, but it has been seen before. It's almost like the kid who's at the top of the class, the kid who seems to be the smartest, then caught cheating. It's people who are incredibly successful and it's just not enough for them.

Ivan Boesky is one name that comes to mind of the insider trading scandal back in the 1980s. Boesky was considered to be one of the top arbitragers on Wall Street, a very skilled investor. He ended up being caught in an insider trading ring. So that's just one case, one example of somebody who didn't seem to need this at all.

LUI: Wow. All right. Well, Allan Chernoff, I know you continue to research the story because we don't know the outer ends of it as of yet, as information still comes in to us.

Allan Chernoff in New York. Thank you.

LUI: 'Tis the season for list making. And we wouldn't presume to speak for Santa here, but we wondered which politician that you would put on top of this year's naughty list. Well, sorry, Governor. Rod Blagojevich, he who allegedly tried to sell a U.S. Senate seat from Illinois, was named by 56 percent in a CNN Opinion Research Corporation poll as the naughtiest.

Former New York governor, Eliot Spitzer, you can see there, came in No. 2 with 23 percent of the votes. And former North Carolina senator, and Democratic presidential hopeful, John Edwards came in third in that poll. Those two were caught up in sex scandals.

What didn't make the poll, these folks didn't at least. But a few other movers and shakers were tripped up by scandal this year. Remember these? Alaska senator, Ted Stevens, for one, convicted of corruption then narrowly rejected by voters. And then there's Louisiana congressman, William 'Dollar Bill' Jefferson." Indicted by the feds, fired by constituents. And remember Kwame Kilpatrick? The ex-Detroit mayor resigned in a plea deal arising from x-rated text messages to and from a former aide.

Some folks that may make the naughty list.

Hey, you know, traders? Adult therapy? How some wizards of Wall Street are trying to lift their spirits in these hard economic times. Do not miss it. Next hour in the NEWSROOM.

And some people are making the holidays less about God and more about the good of mankind. A humanist joins us live in the NEWSROOM to shed light on human life, an alternative to Christmas.

(COMMERCIAL BREAK)

LUI: Celebrating humanity, reason and hope. It's an atheist alternative to Christmas, Hanukkah and Ramadan. Human Light is a secular holiday observed in late December that commemorates human achievement. Patrick Colucci from the New Jersey Humanist Network joins us right now.

Let's start with this if we can, Patrick. Human Light celebrates the idea of humanism, right? What is humanism to you?

PATRICK COLUCCI, N.J. HUMANIST NETWORK: Humanism is a philosophy of life. It's not a religion. It's a secular philosophy and it's based upon human needs and interests.

We believe in using science and reason to understand the universe, and to solve human problems. And humanists believe in practicing the common moral decencies and the personal responsibilities, social responsibility. And we believe that working together, drawing upon the best human capacities, that we can build a better future for each other in the here and now, not in an afterlife.

LUI: And you celebrate, each year, Human Light? That's the equivalent of saying a Christmas day, per se.

What do you do during that celebration? Which happened I guess, on the 23rd of this month, right?

COLUCCI: Yes. Human Light Day is the 23rd, but most people celebrate it on or about that time, not exactly that day, necessarily.

LUI: And what do you do to celebrate? We were looking at some of the pictures on your Web site. We did see what looked to be doctors or scientists speaking with some of the people that are at the celebration.

COLUCCI: Yes. They were entertainers, actually.

We have -- it varies quite a bit. There's no rules or rituals about how to celebrate Human Light. And so it can vary depending on whatever group is doing it and how they want to have it.

I think what you're seeing there is one of the children's entertainment shows we had that was based around science demonstrations. LUI: OK. Science demonstrations. So you do have some people of a science background during this period.

So, I wanted to go to something that I found in the "Wall Street Journal," Patrick. The "Wall Street Journal" saying that the American Humanist Association spent $42,000 on a bus ad saying, "Why believe in God, just be good for goodness sake."

Now, this is a picture of that ad, if you can see it.

COLUCCI: I barely see it.

LUI: Is Human Light anti-religion, then, would you say? Or just --

COLUCCI: No. One of the things that's important about Human Light, is it's a holiday that's very positive. Now, there's not -- I can't explain everything here, but we have a humanlight.org Web site. But there are certain principles we, who formed Human Light, want to strongly recommend people use when they celebrate the holiday. And one of them is that it not be negative or critical of religious people.

You know, it's a positive, upbeat celebration of our humanist values and we're not there to be negative or critical of others' holidays.

LUI: Understood.

COLUCCI: And we also think it's very important to have a celebration that's a social-type gathering and that's friendly towards kids and has family-type entertainment and that's fun.

LUI: Right.

And last question for you, Patrick.

COLUCCI: Sure.

LUI: Just want to squeeze this is in before we run out of time. How many people celebrate Human Light Day?

COLUCCI: Well, we don't know exactly how many people because it's spread around and there's no rules about reporting to us at the Human Light Committee who's doing. So -- but we do know each year that there may be 20 different celebrations in different cities around the country. And how many people, it's hard to say.

But the number of humanists can vary. Up to 10 or 11 percent of people say they have no religion or don't believe in God, and I think a large part of those people are humanists.

But part of what Human Light is is to reach out to those people and provide a venue or an event where if they are of like mind they can see this and it's out there in the community. It's a community- oriented event. And on our Web site, humanlight.org, we do provide suggestions. But again, they're just suggestions, about how people can celebrate their Human Light holiday.

LUI: Patrick Colucci, thank you so much for stopping by. So I guess Happy Human Light Day is appropriate.

COLUCCI: Happy Human Light to you. I don't know if you celebrate it, but thank you.

LUI: OK. Thank you so much.

COLUCCI: All right. You're welcome.

LUI: The stork drops off a huge Christmas surprise for cycling legend and cancer survivor Lance Armstrong.

(COMMERCIAL BREAK)

LUI: He beat the odds and cancer and has dominated the world of competitive cycling. Now Lance Armstrong and his girlfriend Anna Hansen are expecting a baby, something doctors told that couldn't happen. Our senior medical correspondent, Elizabeth Cohen, is here with the details on why this is so extraordinary.

Not expected necessarily.

COHEN: No, not expected. This has happened before. For example, you may have heard of Evan Handler, he's an actor on "Sex and the City." He had leukemia and had multiple, multiple, multiple rounds of chemotherapy and radiation. He was also told he would never be a father and he also got his girlfriend pregnant. So this does happen. And he said when he went back to the doctors that they told him, oh, yes, it is more likely than we used to think.

So, maybe this is what happened, is that 10 years ago when Lance Armstrong had cancer that back then they thought that he would never father a child naturally, but well, 10 years later, the science has changed. Actually, a French study shows, when they looked at men with testicular cancer who had chemotherapy, that one-third of them did lose their fertility, but that means that two-thirds of them did not.

Now, it can take years for a man's fertility to come back after chemotherapy, sometimes up to four years. But for many men, it does eventually return.

LUI: Well, he has been called superman before.

COHEN: That's right.

LUI: Certainly because of all of the races that he has won.

Let's move to another question folks will be thinking about, and that is of course birth defects. Is that a concern?

COHEN: Right, because he received so much chemotherapy, you might think, would that actually harm the DNA that is in his sperm? And the answer is, actually, when they look at the children whose fathers had chemotherapy, those children are no more likely to have birth detects than children whose fathers did not get chemotherapy.

So again, conventional wisdom here is wrong. There's no reason that his child would have birth defects -- would be more likely to have birth defects than any other kid.

LUI: And he's got three other children, right?

COHEN: He does, from his ex-wife.

LUI: Right.

COHEN: But what he did there, was that before he underwent chemotherapy, he stored his sperm. This is not an uncommon thing for a man to do before undergoing chemotherapy. And his ex-wife got pregnant with that stored sperm by using artificial fertility methods.

But again, not how it happened here. Got his girlfriend pregnant just the old fashioned way.

LUI: So, he got a little bit of a present, shall we say?

COHEN: There you go. There you go. That's right.

LUI: Senior medical correspondent, Elizabeth Cohen, great story. Thank you.

COHEN: Thanks.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Mommy! Mommy!

(END VIDEO CLIP)

LUI: Yes, a memorable homecoming for one soldier mom in Florida. For the first time ever, her daughter was able to run to greet her.

(COMMERCIAL BREAK)

LUI: It was a simple act, but it was an early Christmas present for a U.S. soldier returning from Iraq. Her 4-year-old daughter ran to her, and that is extraordinary since doctors once thought that she'd be confined to a wheelchair her entire life.

Rene Marsh with CNN affiliate, WSVN, has more on the homecoming from Fort Lauderdale, Florida.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Mommy! Mommy!

RENE MARSH, WSVN REPORTER: This was more than just a happy holiday homecoming for this soldier home from Iraq. It was the moment doctors told army specialist, Syd Leslie, she would never see, a moment that made this mother's eyes well up. Her daughter was walking.

UNIDENTIFIED FEMALE: Mommy, Mommy!

SYD LESLIE, U.S. ARMY: It is an amazing feeling. Amazing feeling. I will never forget this feeling. I'm glad to be home with my kids.

MARSH: 4-year-old Cheyenne (ph) Leslie diagnosed with cerebral palsy as an infant. She was never expected to walk or even talk.

UNIDENTIFIED FEMALE: Toys.

MARSH: But as Syd served in Afghanistan and Iraq the past year and a half, Cheyenne fought her own battle. After months of aggressive physical therapy, came the miracle; this little girl's determination defied the doctors' prognosis.

S. LESLIE: For her age, it is beautiful. Because she is 4 and she's very determined to do what she did. And for me to see it finally, it is breath-taking.

MARSH (on camera): What do you want to say to your mom now that she is back?

UNIDENTIFIED FEMALE: Toys.

MARSH (voice-over): She doesn't say much, but her excitement is obvious. Her mother, proud she pulled off what many called impossible.

DOMINGA LESLIE, SOLDIER'S MOTHER: Hope. Faith. I believe that anything is possible.

UNIDENTIFIED FEMALE: Mommy, mommy!

(END VIDEOTAPE)

LUI: Leslie is home for the Christmas holiday. She has a few more months of army service before she is permanently reunited with her daughters. When that happens, she says now that Cheyenne is walking, she is taking the daughters to Disney World.

OK. So, we couldn't find any water skiing squirrels today, so this will have to do. Can you guess what those are? The jolly old elf, showing that he doesn't need a sleigh to have a good time, at least when he's water skiing. Santa has been skiing the Potomac River for 23 straight years now with good form and a smile and a wave. It's a D.C. thing.

Also spotted today, by the way, knee-boarding reindeer, the jet- skiing Grinch and Frosty the Snowman in the dinghy. What a way to celebrate there in D.C.

The next hour of the CNN NEWSROOM starts right now.