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Propane Gas Facility Explodes in Florida; Weiner Drops in Polls; "Housewife" Faces Fraud Charges; Fraud in Rehab Clinics?

Aired July 30, 2013 - 11:00   ET

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

(COMMERCIAL BREAK)

JOHN BERMAN, CNN ANCHOR: Hello, everyone, I'm John Berman in for Ashleigh Banfield today.

And we start in Florida where a propane gas facility went up in flames, sending several people to the hospital.

And the flames were not the only thing shooting up into the air. The blast also shot 20-gallon propane tanks into the air.

One nearby resident said it felt like bombs going off.

CNN's Adriana Hauser is live in Tavares, Florida. Adriana, do officials know how this all started?

ADRIANA HAUSER, CNN CORRESPONDENT: Good morning, John.

They're starting to have an idea what could have possibly caused this massive fire that was -- that began with a series of explosions here in Tavares, Florida.

We know now that there were no fatalities as a result of this explosion. Authorities are calling this a miracle and a blessing, given the huge fire and the series of explosions that took place here last night around 11:00 p.m.

Authorities here say that the focus now is the investigation. And there is nothing -- there is no conclusion yet, but they're starting to believe, John, that the cause could have been equipment failure or human error.

We won't know for sure until the investigation is concluded, but that is what authorities hear are starting to believe.

Let's take a listen. We had an opportunity to listen to Richard Keith, fire chief of the city of Tavares.

(BEGIN VIDEO CLIP)

CHIEF RICHARD KEITH, TAVARES FIRE DEPARTMENT: We don't think that there was any act of sabotage or anything like that. We honestly think it was probably an equipment failure with a combination of maybe human error from one of the staff.

(END VIDEO CLIP)

HAUSER: John, eight people were injured. Some of them were flown to local hospitals. We don't know the extent of their injuries.

We also know that there were 24 employees inside of the plant at the moment of the explosion. And the fire chief also said these employees were actively manipulating the cylinders.

We had the opportunity to tour the facility and what we saw, fortunately, no longer any fire. The fire has been put out, but we did see piles and piles of canisters of the 53,000 canisters that officials say were inside the plant at the moment of the explosion.

Some of them were just scattered. Some of them had obviously exploded, but you could see the debris as you approached the plant.

And now we're waiting, John, for the conclusion of this investigation that is involving not just local, but also state officials and authorities, John.

BERMAN: Adriana Hauser in Florida for us. Those pictures, so dramatic to see, that area is littered with those propane tanks. It could have been a lot, lot worse. Our thanks to Adriana down in Florida.

Back here in New York, he's dropped to fourth place in the latest poll, but Anthony Weiner says he will not drop out of the race for mayor of New York City. This morning he joined other candidates to talk about small business issues.

Rosa Flores joins us now from New York. Rosa, the question, was he able to avoid the sexting scandal and keep the discussion on the issues?

ROSA FLORES, CNN CORRESPONDENT: You know, he always tries. He starts the conversation about, you know, his message to the middle class, things like affordable housing, safer streets, and it always diverts somehow to the sexting scandal. He just can't avoid it.

Now, earlier today, he -- Sydney Leathers, who is his online sexting partner, had an interview with Howard Stern. And in this exchange, she gave us a little timeline.

And the best way to describe it is it's just TMI, too much information, about their sexting exchanges. And while most of this is not fit for TV, not fit for television, we did find a small G-rated snippet that -- where she's talking to Howard Stern about Anthony Weiner sending her lewd photos of himself.

(BEGIN AUDIO CLIP)

SYDNEY LEATHERS, WEINER'S SEXTING PARTNER (voice-over): I think I was like flattered that he trusted me enough to send them in the moment, and also just completely baffled that someone so book-smart could be so stupid in life.

HOWARD STERN, RADIO HOST: Yeah, because now you ...

(END AUDIO CLIP)

FLORES: There has been one bombshell after another. Anthony Weiner has been trying to separate himself, like I said, from all the drama associated with his sexting spree. That's why he's been waking up early and staying up late, hitting the campaign trail.

Now, this morning, he and other candidates talked about issues impacting food vendors, you know, those mobile food trucks that sell hot dogs and pretzels in New York City.

(BEGIN VIDEO CLIP)

ANTHONY WEINER, NEW YORK MAYORAL CANDIDATE: I say to my colleagues, there already are concessions for vendors in the parks.

Look, I happen to like the hot dog guy. I happen to like buying coffee in little (inaudible) because I didn't want to go and dine in a fancy place.

The difference is there's a Manhattan ethos and there's an outer borough ethos.

(END VIDEO CLIP)

FLORES: Now it's hard not to chuckle when you hear him say things like that.

Now, in the meantime, we've been keeping an eye out for Huma at all of these events, and she's been a no-show, but she was spotted in D.C., dining with Hillary Clinton's spokesperson.

And, John, we've got to say that everywhere he goes, he's greeted with applause. So if you don't -- it makes you think that's probably why he's staying in the race.

BERMAN: Everywhere he goes, greeted with applause, but no doubt everywhere he goes, greeted by more questions and perhaps some snickers at well.

Rosa Flores on the story for us, thank you so much. Appreciate it.

Checking now on some other stories we're following. Embattled San Diego Mayor Bob Filner, fighting accusations of sexual harassment, now says he's going to get two weeks of intensive counseling next month, but he wants taxpayers to pay the expenses.

The city council meets today to decide what to do.

Plus, at least eight people are recovering today after a row house exploded in downtown Philadelphia. The blast also ripped the walls off the two houses next door.

Fire officials say it started when a contractor was lighting a hot water heater in the home which was being renovated. In Washington, police have a suspect in custody in connection with vandalism at the National Cathedral. Two areas inside were splattered with this green paint you're looking at.

Police are looking into whether the woman may have also vandalized the Lincoln Memorial and a statue outside the Smithsonian.

A judge in the Bradley Manning court-martial is expected to hand down the verdict in about two hours. The Army private is accused of aiding the enemy by handing over thousands of classified U.S. documents to Wikileaks. Manning faces up to life in prison.

And in Arkansas, just some amazing video of a jailbreak here, deputies were dealing with one inmate when the other jumped over the counter, crawled through the glass window and just ran out the front door of the Garland Center. There he goes. He's off.

Derrick Estell took off in a waiting car. You can see the officers going after him. Investigators say Estell is considered armed and dangerous. Stunning, stunning images.

Speaking of stunning images, we know that reality TV isn't always that real, but two stars of "The Real Housewives of New Jersey" are getting a healthy dose of reality.

They're in court and they're facing dozens of charges for lying about just how much they make, the gruesome details after this quick break.

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BERMAN: As we all know on "The Real Housewives of New Jersey," it's all about money and meltdowns. Well, we could be on the verge of a epic meltdown.

Two stars of the show are in big trouble for allegedly not playing fair with their very real money.

Nischelle Turner is live in Newark where they were in court this morning.

And, Nischelle, there were just a few people there when they walked into court, right?

NISCHELLE TURNER, ENTERTAINMENT CORRESPONDENT: Yeah, just one or two or 50 people in the media there, waiting for the Giudices to make their initial court appearance.

Now, John, you know, when they walked into federal court this morning and walked in to see the judge, they were very quiet. They sat right now. They didn't say much.

The only thing they spoke to inside the courthouse was to tell the judge that they did understand the charges that they're facing.

Basically this reality couple's real life is getting very real.

(BEGIN VIDEOTAPE)

TURNER: It's a real-life legal saga for two stars of Bravo's "The Real Housewives of New Jersey," a reality series that's famous for bringing the drama.

A U.S. district court has indicted table-flipping housewife Teresa Giudice and her husband, Joe, on 39 counts of fraud and tax charges.

The Giudices are accused of exaggerating their income while applying for loans before "Housewives" debuted in 2009, then hiding their fortunes in a bankruptcy filing after the first season aired.

The federal indictment alleges the Giudices lied to the bankruptcy court, to the IRS, and to a number of banks.

The pair faces pretty still penalties on the most serious charges, up to 30 years in prison, and a million dollar fine if convicted.

Joe Giudice was also charged with failure to file tax returns between 2004 and 2008, a time when he earned nearly $1 million, adding to an already checkered legal past.

MAGGIE FURLONG, WEST COAST EDITOR, HUFFPOST TV: We've been hearing rumblings of in the news for years now, and it's all kind of come to a head with these latest charges.

TURNER: Joe's lawyer did not immediately respond to requests for comment. However, Teresa's attorney told CNN she will plead not guilty, releasing a statement saying she supports her husband.

And adding, quote, "I am committed to my family and intend to maintain our lives in the best way possible, which includes continuing my career. As a result, I am hopeful that we will resolve this matter with the government as quickly as possible."

With "The Real Housewives of New Jersey" in its fifth season on Bravo, Teresa's future with the show is potentially in jeopardy.

FURLONG: You can't really shoot the level of glamour and weave- pulling behind bars.

(END VIDEOTAPE)

TURNER: Now because this was an initial appearance, John, and not an arraignment, that -- they did not enter a plea in court today. That will happen on August 14th.

But there are some stipulations that the judge put on the Giudices today. Both of them were released on a $500,000 unsecured appearance bond.

They also both had to surrender their passports. They are restricted to travel in New York and New Jersey.

And one interesting thing that came out of this, Joe, or Giuseppe Giudice, as he is named in the complaint, is not a U.S. citizen, and he had to answer to that in court.

So at the end of this, he did have to acknowledge the fact that he could possibly be deported back to Italy because he's an Italian citizen.

Also, the judge said he had the right to talk to the Italian embassy throughout this process and to consult with them if they wanted.

Now I did walk out with both Teresa and Joe out of the courthouse in the middle of the media scrum. I kept asking them questions. You know, how did they feel? Are they worried about their children?

They were tight-lipped. However, Joe's attorney did answer a couple of questions for me. I asked him why Joe didn't take a plea in the other case that he has pending. Would he take a plea here? And he said simply because his client is not guilty.

Back to you.

BERMAN: A whole lot of reality, a real-life Nischelle Turner in real- life Newark, New Jersey, great to see you there.

An interesting, interesting case here, a laundry list of charges, and if this couple is found guilty, they do face a hefty sentence.

So let's bring our legal panel to take about this, break it all down. Criminal defense attorney Midwin Charles and trial attorney Heather Hansen.

Midwin, let's start with you. Serious charges here, a long list of them, how much jail time could we be talking here?

MIDWIN CHARLES, CRIMINAL DEFENSE ATTORNEY: My goodness, they are looking at a totality of at least 55 years and that's if they're lucky. The problem with this case is that they have lied, or allegedly, to various different governmental agencies. And I think we all know that the IRS, bankruptcy courts, do not like it when people are not forthcoming. I mean, there are starts sitting in jail as a result of that. Lauren Hill comes to mind.

So they're looking at a lot of jailtime. These are serious allegations and they run the gamut from mail and wire fraud to lying to bankruptcy court to filling out false loan applications as well. So it does not look good for them. And if I were them, I would be trying to settle and work out an arrangement as soon as possible, if possible.

BERMAN: Serious allegations, a number of allegations. So Heather, as a defense attorney, how do you go about defending them? Especially considering that they're a very public couple.

HEATHER HANSEN, ATTORNEY: Well, John, that's the perfect point because it's the publicity. They're claiming that Teresa was not employed in 2009. In 2009 she started the "Real Housewives" show. The whole world practically knows that Teresa was employed. So it's going to be a very difficult case to defend. I agree with Midwin, talking about a plea would probably be a good idea. I think it's interesting that they have said that -- Joe, they have not pled yet. Now Teresa's lawyer -- they have separate attorneys, which I think is a great idea - Teresa's lawyer has said that she is going to plead not guilty. Joe's lawyer hasn't spoken to the issue and I wouldn't be surprised if there's a deal made by Teresa and perhaps Joe will plead to some of these charges.

BERMAN: Look for some kind of deal. Midwin and Heather, stay with us. We'll be talking again in jut a little bit

Just ahead, a father is sentenced to life for killing his 14-year-old stepson and now his other son, 17-year-old Joshua Young, goes on trial for the same brutal beating that killed his stepbrother. We will have this tragic story, next.

(COMMERCIAL BREAK)

BERMAN: A boy accused of helping his father kill his 14-year-old stepbrother, beating him to death behind a high school in Louisville. This is Joshua Young. He's 17 now. He was 15 at the time, and he's charged with complicity to murder and complicity to tampering with evidence. The possible sentence he now faces: life in prison. Opening statements expected to start today.

At first his father, Joshua Gouker, told police his son killed Trey Zwicker with a baseball bat. Then he changed his story and said he acted alone. He pled guilty to Zwicker's murder and was sentenced to life in prison. He said he killed in revenge.

(BEGIN VIDEO CLIP)

JOSHUA GOUKER, JOSHUA YOUNG'S FATHER: Well, his mother aborted my kid. I tried to let it go and I couldn't. I didn't think it would be, honest (ph), like this. I didn't think -- it's one murder. It's not like it was a whole bunch of murders. I never thought it would be -- people would be this persistent with it.

Look, Amanda killed my kid, you know. That's just (EXPLETIVE DELETED) crazy. She knows who I am. We're even.

(END VIDEO CLIP)

BERMAN: We're even. That is chilling. Joining me now to talk about this, back again, defense attorney Midwin Charles and trial attorney Heather Hansen. The defense, Heather, and Joshua Young's family members say that Gouker led his son astray. What kind of impact could that have on the jury?

HANSEN: It should have a huge impact. I mean, this was a kid who was spending time with his foster parents and doing very well. And then when he got back with his father, he stopped going to school, he started doing drugs. And, you know, the only evidence -- John, I have a tough time with this case, because the only evidence against him that we've heard thus far is the father's words. And you've heard, although chilling, the father's words have differed over and over again as to how this murder happened until he ultimately confessed. This case is just a travesty.

BERMAN: So Midwin, if you are the defense in this case, what do you do to separate this son from this father?

CHARLES: Well, what I would do is focus on the son and build him up as a person, and humanize him and get the jury to understand what kind of person is this young man. And focus on his age as well. I mean, he's a young person, and I think that juries oftentimes feel several sympathetic when they're looking at a defendant who is really, really young. I mean, that really is the way to do that.

I mean, just watching that tape, I found it to be shocking, for this man to say he doesn't understand why people are so persistent with respect to a murder. I mean, that is shocking. And I think for the jury to understand what they're dealing with I think is the best way to try this case as a defense attorney.

BERMAN: It was chilling to hear the father talk like that, as we said. Really dramatic, strange words there.

Let me throw up a picture of Joshua Young here. He's 17 years old right now. He was 15 when the murder was committed. His appearance, you know, he does seem so incredibly young. That is what the jury will be looking at. A very young man, but how much of the father will they see in the trial? How much of that other image, Heather, is likely to get into their heads?

HANSEN: Well, and that's what the prosecution's going to have to do. You know ,there was a suppression hearing to keep out some of the statements of Josh Young. It'll be interesting to see what those statements were. Because if Josh Young has admitted to having some interaction, some participation, in this crime, it's going to have a big impact. I think the father is going to play a huge role in this case, John, not only from the defense side saying that he made the son do it, but the prosecution side saying he's his father's son. And unfortunately that may sway the jury.

BERMAN: All right. Midwin Charles, Heather Hansen, stick around, we'll come back to you in a little bit. A lot else to talk about.

Meanwhile, could taxpayers by on the hook for $94 million? That's how much went into two taxpayer-funded drug rehab clinics that show signs of fraud or questionable billing practices. Our Drew Griffin examines the rehab racket -- it's serious -- when we come back.

(COMMERCIAL BREAK)

BERMAN: Welcome back, everyone. An investigation into a state- sponsored taxpayer-funded rehab program in California gives an eye- opening look at fraud and abuse. The problem, the program, I should say, looks like a noble cause on paper: privately run rehab clinics get Medicaid money by billing for each addict who gets counseling. But over the past year, an investigation by CNN and the Center for Investigative Reporting has found a system riddled with fraud and poor oversight from billing for phony patients to allowing convicted felons to run rehab centers.

Because it's happening California, we are talking about big, big money here. State and federal taxpayers are on the hook for tens of millions of dollars every year. Our investigative correspondent Drew Griffin is keeping them honest in Part 1 of this series.

(BEGIN VDIEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: Mr. Ilouno, Drew Griffin with CNN. How are you?

(voice-over): George Ilouno has run taxpayer-funded drug rehab business in Southern California for the past six years, which is surprising, because for the past 11 years, he's been on a list of people banned from billing Medicaid. Convicted of student loan fraud, George Ilouno should never have been allowed to even open this clinic called GB Medical.

GEORGE ILOUNO, OWNER, GB MEDICAL: Why, what's going on?

GRIFFIN (on camera): I'm asking you a few questions, sir, about the drug rehab business. Want to ask you about -- you seem to be at the center of a fraud allegations here.

ILOUNO: No, no, no.

GRIFFIN: Have you been faking signatures onto sheets of paper and billing the state for the money?

(voice-over): Guess what else? Ilouno is facing felony criminal charges for ripping off the state, allegedly getting paid by taxpayers to rehab drug abusers who weren't even there.

GRIFFIN (on camera): Excuse me, sir. How can you bill the state for clients that don't exist? Mr. Ilouno? Just one second, sir?

(voice-over): We never saw Ilouno again.

(on camera): Ilouno's drug rehab business here in Southern California has been part of the largest Medicaid program in the nation, paid for with federal and state dollars. A one-year investigation by CNN and the Center for Investigative Reporting found the rehab portion of that program, called Drug Medi-Cal, is rife with fraud, has operators who bill the government for made-up clients, and often get away with it.

(voice-over): Joy Jarfors saw plenty of fraud in the nine years she spent working as a supervisor over Drug Medi-Cal.

JOY JARFORS, FORMER DRUG MEDI-CAL SUPERVISOR: I believe that the word got out that there was easy money to be made in the outpatient drug- free system.

GRIFFIN (on camera): How bad?

JARFORS: It's bad. It was real bad. I left state service about three years ago and we would have one provider that would bill for over $1 million in one year that we believe was 100 percent questionable billing.