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Americans Arrested for al Qaeda Connections; Suspects in Aruba Disappearance to be Held Longer; Fans Gather to Wait for Jackson Verdict

Aired June 08, 2005 - 13:00   ET

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

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


KYRA PHILLIPS, CNN ANCHOR: Missing student mystery. Suspects in Natalee Holloway's disappearance go to court. We're live from Aruba with the new developments.
CHRIS LAWRENCE, CNN CORRESPONDENT: I'm Chris Lawrence, live in Lodi, where federal agents say they have broken up an alleged terrorist cell, right here in northern California.

PHILLIPS: He was carrying a bloody chain saw, a knife and a sword. But U.S. border agents let him in. Now he's in jail after a gruesome discovery.

(BEGIN VIDEO CLIP)

TOM STEFANELLI, PIZZA DELIVERY MAN: He pointed the gun to my face, took my right hand, caught his wrist. One shot was fired then.

(END VIDEO CLIP)

PHILLIPS: Dedicated deliveryman. This pizza guy gets hit by a bullet and still makes his next three deliveries.

From the CNN Center in Atlanta, I'm Kyra Phillips. CNN's LIVE FROM starts right now.

Immigrant father, ambitious son, specialized training abroad. Polygraphs, arrests and alleged confessions. It's the lowdown in Lodi, not the American dream but allegedly a post-9/11 American nightmare.

Feds in California say the sons studied terror at an al Qaeda training camp and both men lied about it. Now both, along with two local men, imams rather, are front and center in the "CNN Security Watch."

Chris Lawrence has all the details -- Chris.

LAWRENCE: Kyra, right now, federal agents have arrested two U.S. citizens. They say Umer Hayat and his son, Hamid Hayat, lied to federal agents about involvement with terroristic activity.

Now, this also follows several raids in this area around Lodi, California, including mosques and two private homes.

Now federal court documents show that this investigation began more than a week ago being when Hamid Hayat popped up on a no-fly list coming into the country from a flight from Pakistan. He was allowed to come into the United States, where FBI agents questioned him.

They say Hayat at first denied, then admitted, that he had attended a terrorist training camp in Pakistan, which he described as a place where people learn how to kill Americans, receiving instruction on explosives and weapons, including sessions where photos of President Bush were pasted onto targets that the trainees were then instructed to shoot at.

Officials also accuse Hamid of potentially targeting hospitals and grocery stores right here in the United States -- Kyra.

PHILLIPS: Chris, what more can you tell us about the other two suspects? I believe one of them is the imam at this Lodi mosque, right?

LAWRENCE: That's right. Both actually are imams or spiritual leaders of local mosques here in Lodi, California. And law enforcement sources are telling CNN that they were both taken into custody on possible visa violations, after meeting separately with the Hayats over the weekend.

But when the family of one of the imams came back here to this house early this morning...

PHILLIPS: Got you.

LAWRENCE: ... we saw the wife of one of the imams go back into the house, and a family friend said there's just no way he can believe that they could be involved with anything having to do with terrorism.

(BEGIN VIDEO CLIP)

RAMZAN ALI, SUSPECT'S NEIGHBOR: We are very, very confident that they will be cleared because we know Mr. Adil Khan here for a few years, three or four years. And since he's been here, he's very involved with the community, not only Muslim community -- he had a relationship with the temple that we went to, Christian, Jews, and all the neighbors. He had a very good relationship.

(END VIDEO CLIP)

LAWRENCE: Now, law enforcement sources are telling CNN that they are investigating others in this case. They say there is the possibility of more arrests to come as they investigate the possibility of a terrorist cell right here in northern California -- Kyra.

PHILLIPS: All right, Chris Lawrence, thanks so much. We're going to talk more about that possible terrorist cell with our Nic Robertson and also Peter Bergen, our analyst, of course, on terror.

Well, CNN is committed to providing the most reliable coverage of news that affects your security. Stay tuned to CNN for the latest information day and night. Now a ruling in Aruba, two actually. A judge says both suspects in the disappearance of an Alabama teen can stay locked up awhile longer while investigators look for more evidence.

We still don't know what evidence they've got already. And the arrests notwithstanding, investigators still don't know whether Natalee Holloway is a runaway, an accident victim or a victim of something worse. We do know, now, the suspect's names, Nick John and Abraham Jones.

CNN's Karl Penhaul joins me on the phone with more on these two individuals.

Karl, what can you tell us?

KARL PENHAUL, CNN CORRESPONDENT: In morning hearings, Kyra, the judge has said that the two suspects will have to remain an eight further days in custody while investigations continue. And that will also give prosecutors a chance for them to gather further evidence.

We've talked to the defense attorneys for Abraham Jones, a 28- year-old, and Nicky John, a 30-year-old, both of them security guards. The defense attorneys say that, so far, evidence gathered by prosecutors is merely circumstantial evidence from witnesses. But none of these witnesses in their statements, according to defense attorneys, ever report having seen the two security guards in the company of Natalee Holloway.

We have talked also to family members of Abraham Jones. The mother turned up at the courtroom this morning, although the hearing was not eventually held there. This is what she had to say about her son.

(BEGIN VIDEO CLIP)

CYNTHIA JONES, ABRAHAM JONES' MOTHER: But God is above! God is above! God knows my son is innocent! And I will go down for it! My son is innocent!

(END VIDEO CLIP)

PENHAUL: Now, Abraham Jones' mother...

PHILLIPS: All right, I apologize. Obviously, we're talking to Karl Penhaul via satellite phone, and we lost that connection there. We'll try to get him back on the phone to find out more about these two men now that are being held, locked up actually, while investigators look at the evidence existing, possibly against them.

Well, the fate of Michael Jackson is still being figured out in a tightly guarded room in California. Ten counts concerning Jackson's alleged abuse of a 13-year-old cancer patient have so far occupied four men and eight women for a little under 16 hours now.

We get an update from CNN's Ted Rowlands in Santa Maria -- Ted. TED ROWLANDS, CNN CORRESPONDENT: Kyra, the wait continues here. Jurors arrived a little early for their deliberations this morning, coming at 8:22. And that's when they started their deliberation process.

They had been at it awhile. So everybody outside covering it. The fans and surely, the interested parties are on edge, waiting for that word a verdict may come in.

As you mentioned, the jury is made up of eight women and four men. The foreman is a male, who is a retired high school counselor, a person that has worked with kids for years and may provide some insight as to children's behavior and may possibly -- believability.

This is a juror that took a lot of notes. He was seated in the corner with another gentleman that took a lot of notes. He's the one with the mustache there, on the -- on the sketch.

Now, Michael Jackson -- we've not heard an update as to the latest on him. According to his spokesperson, he has remained at Neverland Ranch throughout this deliberation process.

Jesse Jackson has been coming to the courthouse on a daily basis. He is here right now. And he has been giving updates on the Jackson family. But at this point, we have not heard anything new, if you will, about this.

Clearly, it is a wait. And as more time goes on, the tension level inside and outside this courthouse increases.

Fans have kept a vigil outside the courthouse constantly throughout this deliberation process. There are dozens of fans out here again this morning. And the judge has said that he's going to allow just one hour. So these fans are not taking any chance. They are camped out here.

The crowd a little bit thinner than we have seen in days past. But there are majority security concerns with this crowd, especially if the verdict does not go their way. Sheriff deputies will be on patrol in force, when the jury verdict is read.

It will be read -- we will be able to hear it live. The judge has allowed an audio-only feed from the courtroom, when this verdict is read, and presumably, these fans will hear it when it is read live -- Kyra.

PHILLIPS: All right, Ted if, indeed, a verdict is announced today, who exactly contacts Michael Jackson and what happens from there? Is he brought back to the courthouse? Give us the rundown.

ROWLANDS: When word of a verdict comes down, the attorneys will be immediately notified and, presumably, the attorneys will then notify Michael Jackson. Thomas Mesereau's team will notify Jackson.

He has an hour to get to the court. Clearly, they'll give him some leeway. But the idea is to leave as soon as possible. If he is at Neverland, which a spokesperson says he is, it takes about 40 minutes to drive.

And then once everybody is in place, the verdict will be read. If it is not guilty, Jackson walks out of the courthouse a free man. If it is guilty, he most likely will never go back to Neverland, or at least not for some time. Because he will be, it is presumed, remanded into custody. His bail will be revoked, because he would be considered a major flight risk. A lot at stake here when that verdict is read, obviously.

PHILLIPS: All right. It's going to be a busy day, I can just feel it. Ted Rowlands, live from Santa Maria, California, thank you so much.

Well, if you got shot on the job, your boss would probably understand if you went home for the day, right? Well, this pizza guy decided to keep the pepperonis coming after he took a bullet. He tells his story straight ahead on LIVE FROM.

ELIZABETH COHEN, CNN CORRESPONDENT: Also straight ahead, doctors are calling it a miracle, a medical first, an ovarian transplant resulting in a bouncing baby girl. We'll tell you how they did it when they come back.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DUSTIN HOFFMAN, ACTOR: Mrs. Robinson, you're trying to seduce me.

(END VIDEO CLIP)

PHILLIPS: And Mrs. Robinson, Anne Bancroft, seduced an entire movie audience, or movie audiences, in "The Graduate." By the way, she was just 36 when she made this movie, only six years older than Dustin Hoffman, by the way. And despite the Robinson renown, Bancroft was dismayed that the role eclipsed much of her other work, including her Tony- and Oscar-winning portrayal of Helen Keller's teacher, Annie Sullivan, in "The Miracle Worker." Also an Emmy winner, Bancroft was one of the handful of actors to earn the so-called Triple Crown.

Bancroft was married for more than 40 years to producer, writer and actor Mel Brooks. Their son, Max, was born in 1972.

Anne Bancroft died Monday of cancer. She was 73. Tonight, the lights on Broadway will dim in her honor.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

STEFANELLI: Wrist, one shot was fired then. Went off that way. Probably in the house somewhere. When at that point, I did like this with the bag where I flipped it in the face, took him by the neck and took him down to the ground over here.

UNIDENTIFIED MALE: The next thing Tom knows, another shot is fired and the attempted robber takes off. So what did Tom do?

STEFANELLI: My customers come first. I always take care of my customers.

UNIDENTIFIED MALE: He delivered the rest of his pizzas. Only one problem.

STEFANELLI: I didn't realize I was shot at the time. Until I started driving down the road.

UNIDENTIFIED MALE: Yes that second shot hit Tom's left leg.

STEFANELLI: Clean through and through.

UNIDENTIFIED MALE: The .32 caliber bullet even hit his wallet.

STEFANELLI: Through the pictures and out the back right there.

UNIDENTIFIED MALE: Dedication? You bet.

STEFANELLI: I don't like to leave a job undone. I like to finish what I start.

UNIDENTIFIED MALE: And finish the job he did: four deliveries, after being shot in the leg. That's why Tom says he's one of the best pizza delivery persons around. And now also one of the most famous.

STEFANELLI: My phone is going off the hook. Now I got "Current Affair" calling me.

(END VIDEOTAPE)

PHILLIPS: I hope Tom gets a raise, too.

Well, an update now on the Los Alamos lab whistleblower that was badly beaten outside a bar last weekend. Thomas Hook has been released from a Santa Fe hospital after last weekend's attack.

Hook says that he went to the bar to meet someone who wanted to talk to him, but that person never showed up. Hook's wife and lawyer say he was lured and attacked to stop him from testifying later this month at a hearing about the nuclear weapons lab.

Another accounts are coming out, including one from a dancer at the club, who claims Hook got a lap dance from a waitress. Hook's lawyer says his client didn't interact with any girls at that club.

Well, now to a medical first and how a twin sister helped a young Alabama woman become a mom. CNN's Elizabeth Cohen has more on this first successful ovary transplant.

Pretty neat story. COHEN: It is a neat story. The doctors, in fact, are calling it a miracle that this woman was able to have a baby. They tested this out on theory, on animals for decades, and it turned out that it really did work.

The woman's name is Stephanie Yarber. She's 25 years old, and she had had ovarian failure at age 14. And doctors don't know completely why. So she hadn't had a period in 10 years.

Her twin sister, however, and her name is Melanie Morgan, had three children. So she obviously was quite fertile. And there you see them right there. So you had that situation. She had tried IVF. It didn't work. And so Melanie gave her sister some of her ovarian tissue. And that was in April 2004.

And then in July 2004, her sister had her first light menstrual cycle. It wasn't quite normal. And then in September 2004, she had her first normal cycle. And then in October 2004, the pregnancy was confirmed. And then just two days ago, her baby was born.

They haven't said the name yet. But we do know it's a healthy baby girl. Seven pounds, 15 ounces.

PHILLIPS: Wow. Now, you were saying back when -- it was a miracle just to have a kidney transplant. Well, now we see them happening on a regular basis. So could this miracle turn into something that could happen obviously more than once?

COHEN: It could, but it would take years. I mean, right now, they've only proved the principle in two women who are identical twins. So that she didn't -- Stephanie didn't have to take anti- rejection drugs. There's obviously some huge problems with that.

So now the question is, would this work in two women who are not identical twins? But we're talking about kidneys. Fifty years ago, that's where they started, with identical twins. And then as the years passed, they tried it in siblings. And now you don't even have to be related to get a kidney transplant.

PHILLIPS: All right, Elizabeth Cohen, thanks.

More LIVE FROM right after this.

(BEGIN VIDEO CLIP)

PHILLIPS (voice-over): Next on LIVE FROM, how secure is America's border? Customs agents let this man in, carrying a sword, a hatchet, a knife, and a blood-stained chainsaw. Now, he's suspected of murder.

Later on LIVE FROM...

UNIDENTIFIED MALE: I can become you tomorrow.

PHILLIPS: Stealing your identity. This guy proves just how easy it is. What you need to know to protect yourself. Also ahead, Nobel Prize winner Ernest Hemingway's legacy threatened. A peek inside his Havana hideaway reveals it's falling apart. What's being done to preserve it?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: Live pictures now. The president of the United States, making remarks on strengthening Social Security. (AUDIO GAP) builders and contractors in Washington, D.C. We're monitoring it. We'll bring you anything earth-shattering and breaking if it happens.

Well, big tobacco is getting a big break from the Justice Department. Susan Lisovicz has the story live from the New York Stock Exchange.

Hi, Susan.

(STOCK REPORT)

(COMMERCIAL BREAK)

PHILLIPS: Right now in the news, a judge in Aruba rules that there is enough evidence to continue holding two hotel security guards suspected in the disappearance of an 18-year-old Alabama student. Nick John and Abraham Jones will be detained for another eight days so prosecutors have more time to gather evidence in the case. Natalee Holloway was last seen nine days ago while on a class trip to Aruba.

In Florida, two fired America West pilots have been convicted of operating an aircraft while drunk. We just got the word in. A Miami jury found them guilty. The sentencing will be in July.

In Lodi, California, federal agents have searched the homes of two top Muslim leaders. The men have been arrested, along with a father and a son, as part of an ongoing terror investigation. According to an FBI affidavit, the son confessed to attending an al Qaeda training camp in Pakistan in 2003 and 2004. The latest on the investigation coming up at the top of the hour.

More now on the terror arrests in Lodi, California. An American born son of a Middle Eastern immigrant supposedly has admitted training to kill other Americans at an al Qaeda camp in Pakistan. He and his father are charged with lying to the FBI and two local clerics are in trouble, too, for alleged visa violation.

We want to dig a little deeper into what this means with Nic Robertson, who joins us now, live from London. And Peter Bergen -- I'm sorry, Peter Bergen, I apologize. Our terrorism analyst, joining us live from London. I was getting word that we only had Nic and not you. And I apologize. We have you. That's good news. Good to see you.

PETER BERGEN, CNN TERRORISM ANALYST: Good to see you, Kyra.

PHILLIPS: All right.

BERGEN: So...

PHILLIPS: Let's talk about these two individuals. You've obviously been following this case, before we got word of what happened today, right?

BERGEN: Well, I mean, one of the things that's interesting is that the father in the case says that his son trained at a training camp run by a guy called Malana Raman (ph), who is a fairly well known political figure in Pakistan. He has a rather large religious party.

That raises some questions in my mind about whether, really, this was really an al Qaeda training camp. The training camp is supposed to be near Rawalpindi, which is the headquarters of Pakistan's army and also very near the capital of Pakistan, Islamabad. I find it very hard to believe that al Qaeda would be running a major training camp so near our army headquarters. It's more likely to be a Kashmiri militant group. That makes much more sense. Now that may be a distinction with that, a difference with a sense that these Kashmiri militant groups certainly have links to Al Qaeda.

And the fact that if indeed the allegations in this FBI affidavit are correct, that this guy from California, second generation, was getting paramilitary training, was learning how to use explosive, et cetera, that's pretty worry.

It's also the first time that I can remember a second-generation Muslim-American in the post-9/11 era supposedly training at a paramilitary training camp aimed at killing Americans. So I think that's pretty significant.

PHILLIPS: All right, so if Kashmiri militant versus Al Qaeda training camp, you're saying it's still -- the intensity is still the same, even though it may be two different things. If we say Kashmiri militant training and Al Qaeda training, is it still that same level of a threat?

BERGEN: Well, the Kashmiri militant groups have tended to really be concerned about one issue, which is Kashmir. Al Qaeda is interested in attack Americans, and Kashmiri militant groups, generally speaking, haven't.

But that may be just getting in the weeds too much. The fact that this guy was getting paramilitary training, according to this affidavit, you know, I think is pretty significant. We haven't seen much example of sleeper cells in the United States since 9/11. There was an Ohio trucker by the name of Farris (ph) who was planning to sabotage the Brooklyn Bridge. He was convicted of that plot. But otherwise, we haven't seen that phenomenon, and certainly not second generation Muslim-Americans engaging in this activity.

PHILLIPS: And what does that tell us, Peter, about cells here at home, in the United States? Do you think this is just a couple of people, or do you think this is going to lead into something much bigger? BERGEN: I suspect that it's more the former. You know, the FBI, in a leaked memo back in March, said they have found really any evidence of sleeper cells. This is before this case went into play. So I think that -- I don't -- I sort of doubt that, you know this is going to be the tip of the iceberg. I think this is a significant case, but I don't think suddenly there will dozens of other people turned up in the Sacramento area who are part of this conspiracy.

PHILLIPS: What does this tell us about the mosques -- well, I guess, first of all, I should lay out do we know for sure that the leaders in this mosque, the imams, two of whom are being held right now, are definitely tied to this father and son that allegedly got this training, and what does that tell us about the operations of mosques, and are they being monitored, should they be monitored, is that discriminatory?

BERGEN: You know, it may tell us not very much. You know, it seems the father's mistake was to know what his son was doing, to provide him with some financial help, and also lying to federal investigators. That's sort of the Martha Stewart mistake. And so it seems that the charges against the father are reasonably serious. As to what the imams at the mosque were doing, I really have no idea.

PHILLIPS: So, Peter, also, too, allegedly, the way the FBI came about this father/son duo is because they were flying back and forth from the states and Pakistan and a name -- their name, one of the names, was on the no-fly list. So while lately we've been hearing all these incidents of individuals on the no-fly list not being tied to terrorism, could this possibly be a sign that, OK, maybe the no-fly list does work?

BERGEN: Well, it does work to a certain extent, except that they did allow this guy to get on the plane. It was diverted to Japan, and he was interrogated, and then sent on to the United States. But it's not the only example I can think of where terrorists or alleged terrorists, you know, managed to get on American Airlines. Think about Richard Reid, the so-called shoe bomber. The first time he try to get on the flight between Paris and Miami that he was attempting to blowup he was turned away. He came back the second day. He got on. So by the law of averages, some people are going to get through.

PHILLIPS: All right, Peter, I hear we now have our CNN senior international correspondent Nic Robertson also joining us live from London with some additional information.

Nic, I know you've been working your sources. What can you tell us?

NIC ROBERTSON, CNN INTL. CORRESPONDENT: Well, we're getting just a little bit more information about the man who is allegedly responsible for that training camp just outside of the Pakistani capital of Islamabad, close to the town of Rawalpindi. Milano Faceal Rahman Khalil (ph) is part of the Hezbi Mujahadin Group. And he has been suspected for a long time, according to Pakistani Authorities, suspected for a long time of running this type of training camp. Indeed, over the last few years, we're told that he has been picked up and detained by Pakistani intelligence officials on several occasions and questioned.

Also it's interesting to note that in that 1998 cruise missile attack against Osama Bin Laden, he came out -- was the only jihadi leader who came out and held a press conference. And at that time -- again, this is all alleged in the affidavit. At that time when he came out and held a press conference following that attack, he said that more than a dozen of his people is have been killed, and that he would seek revenge against the United States for it. A contact spoke with him in Pakistan just 2 1/2 months ago, and at that time Milano Faceal Rahman Khalil was claiming to have cancer at that particular time, just two-and-a-half months ago, a free man in Pakistan.

PHILLIPS: All right, so, Nic, it's hard, because we don't have pictures of all these various individuals. So these two individuals, this Hamid Hayat and Umar Hayat, the father/son duo that has been taken in by authorities from the Sacramento area, this mosque in Lodi, tell me the possible connection you are saying between -- or among those two, with this Khalil individual that you are talking about. Am I getting that right?

ROBERTSON: Indeed. Hamid went to the religious school and was encouraged by relatives and contacts there to go to the training camp. The training camp that he mentions in the affidavit and says in the affidavit, was run by Khalil. He gives an abbreviated version of his name. This camp run by Khalil. Khalil, suspected by the officials in Pakistan of running such camps, has been detained by Pakistani officials in the past and questioned about training young people to go to Afghanistan and to fight against the Americans in Afghanistan. So there is a track record, if you will, against this individual who is alleged to have run this camp Hamid is alleged to have trained at.

PHILLIPS: Our senior international correspondent Nic Robertson, and also our terrorism analyst Peter Bergen. We'll continue. Thank you both very much. We'll continue to follow this story.

Of course if you're just tuning in, about this American-born son of a Middle Eastern immigrant, supposedly admitted to training at an Al Qaeda camp in Pakistan. Still trying to hammer out if indeed it's a Kashmiri military camp, as Peter Bergen just mentioned, or indeed an Al Qaeda camp as Nic has been talking about. We're working the story, obviously, going to bring you more information and what this means to our security here in the United States and possible sleeper cells existing in the U.S.

We're going to take a quick break. More LIVE FROM right after this.

(COMMERCIAL BREAK)

PHILLIPS: Well, a truly curious story now from the northern U.S. border and one with a tragic twist. American customs officials are explaining today why they allowed a man into the country from Canada who by all appearances should never have made it in. The reason surprised us. It's going to surprise you, too.

Here's CNN's Jeanne Meserve.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): The place where the St. Croix River slices between Canada and the U.S. has its share of unusual characters, but the man who showed up at the quiet border crossing at Calais, Maine, on April 25, 22-year-old Gregory Despres, was more than unusual.

Eddie Young was also trying to enter the U.S. that day.

EDDIE YOUNG, CROSSED BORDER: He was quite the funny-looking person. His eyes were wide opened. His hair was all wet, and the mohawk, and the hair came down in the center of his face.

MESERVE: Even more unusual, what he was carrying. Court records show he had a homemade sword engraved with his name and a swastika, a hatchet, a knife, two homemade brass knuckles, pepper spray, zip cuffs, a flak jacket and a small chain saw, spotted with what authorities say appeared to be blood.

YOUNG: The America border patrol had the swords out and doing -- you know, swinging them around. The chain saw got picked up and it was going, you know -- they looked things all over. They were, you know, putting the bass knuckles on, stuff like that.

MESERVE: Despres had dual Canadian and American citizenship. A police report says Despres told border officials he was the sergeant in the Marine Corps, had a helicopter waiting for him and worked for the president.

(on camera): U.S. Customs and Border Protection held him here in Calais, Maine, for two hours. They ran his name against criminal databases, talked to law enforcement on both sides of the border. Having found no outstanding warrants and having determined that he was a U.S. citizen, they let him into the country.

(voice-over): Customs and Border Protection would not talk on camera, but a spokeswoman tells CNN: "There was nothing that we could hold him for. And being a U.S. citizen we couldn't force him to go back to Canada or anything like that."

MESERVE: Agents did confiscate his weapons.

(on camera): But just one day after Gregory Despres crossed into the U.S., a horrific discovery at this small house in Minto, New Brunswick: two bodies.

(voice-over): The victims -- Veronica DeCarry, known as Verna, and her common law husband, Fred Fulton, a well-known local musician.

MICHAEL RICHARDSON, FRED FULTON'S NEPHEW: He played everything. He would play everything and he was a big Chet Atkins fan, so he loved his music, and... MESERVE: Didn't I say -- hear he was called the Chet Atkins...

RICHARDSON: The Chet Atkins of Minto.

MESERVE: Gregory Despres lived in this small shed on the property next door to Fulton's home. It has been dismantled in the weeks since the murders. Denny Petitpas lives down the street.

DANNY PETITPAS, VICTIM'S NEIGHBOR: I knew the young fellow was strange. I mean, he would get mad go into his shed or in his camper and smash things and scream.

MESERVE: For two years, neighbors say, Despres escalated a feud with Fulton over a property line, a drainage ditch, and other issues.

PETITPAS: He wouldn't met you halfway. He just -- if you had a problem with what he was doing, well, you was going to have a bigger problem with what he's going to do next.

MESERVE: After one confrontation, Despres was convicted of assaulting Fulton's grandson with a knife. Just hours before he was to be sentenced, the murders occurred. Sargent Gary Cameron of the Royal Canadian Mounted Police.

SGT. GARY CAMERON, ROYAL CANADIAN MOUNTED POLICE: And it was a very bloody scene, and it was very traumatic.

MESERVE: An RCMP report alleges that Despres kicked down a kitchen door and made his way to the bedroom where he stabbed Verna DeCarry and Fred Fulton several times. Fulton tried to barricade himself in the bathroom, but after a struggle, he was decapitated, his severed head left in a pillowcase next to his body.

PETITPAS: The investigator that was investigating this from Toronto, he said, you guys don't really know how lucky you are, because once he had done what he had done there, he had nothing to lose. He could have cleaned the whole neighborhood.

MESERVE: Instead, authorities alleged Despres took Fulton's car and abandoned it near the U.S. border. Right after the bodies were discovered, the Mounties and FBI put out lookouts for Despres, who they now realized had crossed the border.

Despres' Massachusetts driver's license number led to a marina in Mattapoisett, near Cape Cod, where he had once lived in an old cabin cruiser. Suspecting he might come back, Mattapoisett police made up wanted posters. Late on the day the bodies were discovered Officer Andrew Murray was distributing those posters.

OFC. ANDREW MURRAY, MATTAPOISETT POLICE DEPARTMENT: Right around this corner up here, I observed a subject walking matching the physical description of the subject we were looking for.

Right around this corner up here, I observed a subject walking, matching the physical description of the suspect we were looking for.

MESERVE: Murray came back to question the young man through the window of his cruiser.

MURRAY: His poster was face-up on the passenger seat. At that time I reached over, flipped it over so he wouldn't recognize his own picture.

MESERVE: The young man identified himself as Gregory Despres from Canada. Murray pretended he didn't know Despres was wanted and pulled into a parking lot to wait for backup.

MURRAY: We handcuffed him right here. He was laying down, prone down, face down on the ground.

MESERVE: Despres was wearing a flak jacket.

MURRAY: He had a light brownish, reddish stain on his flak jacket which would be consistent with blood -- dried blood.

MESERVE (on camera): How did he explain that?

MURRAY: He just said it was from him skinning deer.

MESERVE (voice-over): Underneath Despres' clothing, a 10-inch swastika tattoo on his back. Despres told police he was on a secret mission with the Marines and was wanted for murder in Russia, but now he is charged with two counts of murder in Canada. He is not yet represented by counsel there and his family declined comment.

(on camera): Some people are dumbfounded that in this post-9/11 world of heightened security where even a traveling grandmother could be subjected to extra scrutiny, someone like Despres, with his odd demeanor and appearance and cache of weapons, crossed this border so easily.

(voice-over): But a former customs and border protection lawyer said the agency had no alternative. No crime had been discovered. And Despres, a U.S. citizen, had a right to enter his country.

STUART SEIDEL, FORMER CUSTOMS ATTORNEY: We still have a country of laws. We still have a Constitution. And I think what they did here was appropriate.

MESERVE: Though extradition proceedings are under way, it is unclear how long it will take for Despres to cross back to Canada to face the music.

For CNN's America Bureau, Jeanne Meserve, Minto, New Brunswick.

(END VIDEOTAPE)

PHILLIPS: And an update now on an ongoing terror investigation, this one out of Florida. We've learned today the Florida doctor accused of helping al Qaeda will be extradited to New York to stand trial. You remember Dr. Rafiq Sabir is an emergency room physician. He and another man, both U.S. citizens, were busted in an undercover FBI sting. Both reportedly pledged loyalty to Osama bin Laden.

We'll have more on this later. We'll be back right after a quick break.

(COMMERCIAL BREAK)

PHILLIPS: Picture of the day. Get a look at this innovative bit of a fashion design. No, it's not the new couture line from Gucci or Calvin Klein. Calfin Klein, maybe. Well, this woman was wearing her modified undergarment here and was hooked by an Australian airport police, trying to smuggle more than 50 live tropical fish. We're going to spare you the details of how they actually found them. Let's just say it's tough to walk around normally with bags of fish in your skivvies.

Well, a true piece of American cultural history is in danger of falling apart and it's going to take some historical cooperation to try to rescue it. We're talking about a home once owned by Ernest Hemingway. And here's the problem: it's in Cuba. Papa wrote "For Whom the Bell Tolls" and other classics while in this farmhouse outside Havana. Hemingway lived there for more than 20 years and little has been done to preserve it.

CNN's Lucia Newman reports on what it will take to save a national treasure.

(BEGIN VIDEOTAPE)

LUCIA NEWMAN, CNN CORRESPONDENT: This 19th century estate on the outskirts of Havana was the first home Ernest Hemingway ever bought with his money.

GLADYS RODRIGUEZ, HEMINGWAY MUSEUM (through translator): He loved it so much that in 1940 when Paramount pictures paid him the royalties for the film "For Whom the Bells Toll," he buys it for $18,500.

NEWMAN: Gladys Rodriguez, curator for what is now the Hemingway Museum, took us on an exclusive tour of the house where the American novelist lived from 1939 to 1960, a period in which he wrote many of his most famous works.

But Hemingway's beloved Finca Vigia, as he named it, is in danger. The ravages of time, neglect and tropical humidity threatening a cultural heritage shared by Cuba and the United States.

RODRIGUEZ (through translator): This is the room that's in the worst shape, where Hemingway used to write. You can see that the humidity has swollen the beans, cracking the floor tiles and the ceiling.

NEWMAN: The U.S. National Trust for Historic Reservation has placed Finca Vigia on its list of 11 most endangered historic sites, the only one outside of the United States. There's plenty worth preserving, from Hemingway's cherished library to the bathroom that gives insights into his obsessions.

On the wall, he scribbled his weight almost every day, with comments like "17 days off diet," "five drinking." (on camera): The house is now closed to the public. Cuba's culture ministry have earmarked about a quarter of a million dollars to start the restoration. And while Cuba says it can do it on its own, but also admits it will be harder and take a lot longer without outside help.

(voice-over): The National Trust for Historic Preservation hopes Washington will grant it a special license to bypass the U.S. economic embargo on Cuba so that it can provide more money and expertise.

PAUL EDMONDSON, V.P., NATIONAL TRUST: It is a very unique site. It's a -- the home of an American cultural icon that has very important historical significance to the American people.

NEWMAN: A rare opportunity for cooperation between Hemingway's country of birth and the one he fell in love with, at a time when only water divided the two nations.

Lucia Newman, CNN, Havana.

(END VIDEOTAPE)

PHILLIPS: And before we leave this subject, check out this great image of Ernest Hemingway. Here he is. You'll see him on the left there, of course, along with Alec Guinness and Noel Coward in Havana in 1958. Well, they were photographed during the filming of "Our Man in Havana," which also starred Burl Ives and Maureen O'Hara. That film, by the way, was one of the last American movies made in Cuba before Fidel Castro took power.

Well, coming up in the second hour of LIVE FROM, U.S. and Iraqi troops search for insurgents in Tal Afar, Iraq. Our Jane Arraf is embedded with American troops there. She's going to bring us the latest when LIVE FROM continues right after a quick break.

(BEGIN VIDEOTAPE)

CAPT. SCOTT O'GRADY: And as soon as the missile hit, the only thing I saw was a cockpit disintegrating in front of me.

AARON BROWN, CNN CORRESPONDENT (voice-over): Captain Scott O'Grady spent six days struggling to survive after being shot down in Bosnia in 1995.

O'GRADY: My heart started racing, and then I heard Basher one one up on the radio.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: I'm alive, I'm alive.

UNIDENTIFIED MALE: Copy that, you're alive.

(END AUDIO CLIP)

BROWN: Little did he know those six days would change his life forever.

O'GRADY: I just want to have a normal life and just continue on.

BROWN: O'Grady immediately found himself thrust into the spotlight recounting his story for millions, and he continues to do so today, 10 years later. He has published two books, "Return with Honor" and "Basher Five-Two," a children's edition of his story. After 12 years serving his country, O'Grady is now pursuing a Master's at Dallas's Theological Seminary.

O'GRADY: I believe that you shouldn't be ignorant as to what you believe. You should understand why you believe it.

BROWN: Once graduated, Scott O'Grady says he wants to dedicate his life to giving back to both his community and his country.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired June 8, 2005 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Missing student mystery. Suspects in Natalee Holloway's disappearance go to court. We're live from Aruba with the new developments.
CHRIS LAWRENCE, CNN CORRESPONDENT: I'm Chris Lawrence, live in Lodi, where federal agents say they have broken up an alleged terrorist cell, right here in northern California.

PHILLIPS: He was carrying a bloody chain saw, a knife and a sword. But U.S. border agents let him in. Now he's in jail after a gruesome discovery.

(BEGIN VIDEO CLIP)

TOM STEFANELLI, PIZZA DELIVERY MAN: He pointed the gun to my face, took my right hand, caught his wrist. One shot was fired then.

(END VIDEO CLIP)

PHILLIPS: Dedicated deliveryman. This pizza guy gets hit by a bullet and still makes his next three deliveries.

From the CNN Center in Atlanta, I'm Kyra Phillips. CNN's LIVE FROM starts right now.

Immigrant father, ambitious son, specialized training abroad. Polygraphs, arrests and alleged confessions. It's the lowdown in Lodi, not the American dream but allegedly a post-9/11 American nightmare.

Feds in California say the sons studied terror at an al Qaeda training camp and both men lied about it. Now both, along with two local men, imams rather, are front and center in the "CNN Security Watch."

Chris Lawrence has all the details -- Chris.

LAWRENCE: Kyra, right now, federal agents have arrested two U.S. citizens. They say Umer Hayat and his son, Hamid Hayat, lied to federal agents about involvement with terroristic activity.

Now, this also follows several raids in this area around Lodi, California, including mosques and two private homes.

Now federal court documents show that this investigation began more than a week ago being when Hamid Hayat popped up on a no-fly list coming into the country from a flight from Pakistan. He was allowed to come into the United States, where FBI agents questioned him.

They say Hayat at first denied, then admitted, that he had attended a terrorist training camp in Pakistan, which he described as a place where people learn how to kill Americans, receiving instruction on explosives and weapons, including sessions where photos of President Bush were pasted onto targets that the trainees were then instructed to shoot at.

Officials also accuse Hamid of potentially targeting hospitals and grocery stores right here in the United States -- Kyra.

PHILLIPS: Chris, what more can you tell us about the other two suspects? I believe one of them is the imam at this Lodi mosque, right?

LAWRENCE: That's right. Both actually are imams or spiritual leaders of local mosques here in Lodi, California. And law enforcement sources are telling CNN that they were both taken into custody on possible visa violations, after meeting separately with the Hayats over the weekend.

But when the family of one of the imams came back here to this house early this morning...

PHILLIPS: Got you.

LAWRENCE: ... we saw the wife of one of the imams go back into the house, and a family friend said there's just no way he can believe that they could be involved with anything having to do with terrorism.

(BEGIN VIDEO CLIP)

RAMZAN ALI, SUSPECT'S NEIGHBOR: We are very, very confident that they will be cleared because we know Mr. Adil Khan here for a few years, three or four years. And since he's been here, he's very involved with the community, not only Muslim community -- he had a relationship with the temple that we went to, Christian, Jews, and all the neighbors. He had a very good relationship.

(END VIDEO CLIP)

LAWRENCE: Now, law enforcement sources are telling CNN that they are investigating others in this case. They say there is the possibility of more arrests to come as they investigate the possibility of a terrorist cell right here in northern California -- Kyra.

PHILLIPS: All right, Chris Lawrence, thanks so much. We're going to talk more about that possible terrorist cell with our Nic Robertson and also Peter Bergen, our analyst, of course, on terror.

Well, CNN is committed to providing the most reliable coverage of news that affects your security. Stay tuned to CNN for the latest information day and night. Now a ruling in Aruba, two actually. A judge says both suspects in the disappearance of an Alabama teen can stay locked up awhile longer while investigators look for more evidence.

We still don't know what evidence they've got already. And the arrests notwithstanding, investigators still don't know whether Natalee Holloway is a runaway, an accident victim or a victim of something worse. We do know, now, the suspect's names, Nick John and Abraham Jones.

CNN's Karl Penhaul joins me on the phone with more on these two individuals.

Karl, what can you tell us?

KARL PENHAUL, CNN CORRESPONDENT: In morning hearings, Kyra, the judge has said that the two suspects will have to remain an eight further days in custody while investigations continue. And that will also give prosecutors a chance for them to gather further evidence.

We've talked to the defense attorneys for Abraham Jones, a 28- year-old, and Nicky John, a 30-year-old, both of them security guards. The defense attorneys say that, so far, evidence gathered by prosecutors is merely circumstantial evidence from witnesses. But none of these witnesses in their statements, according to defense attorneys, ever report having seen the two security guards in the company of Natalee Holloway.

We have talked also to family members of Abraham Jones. The mother turned up at the courtroom this morning, although the hearing was not eventually held there. This is what she had to say about her son.

(BEGIN VIDEO CLIP)

CYNTHIA JONES, ABRAHAM JONES' MOTHER: But God is above! God is above! God knows my son is innocent! And I will go down for it! My son is innocent!

(END VIDEO CLIP)

PENHAUL: Now, Abraham Jones' mother...

PHILLIPS: All right, I apologize. Obviously, we're talking to Karl Penhaul via satellite phone, and we lost that connection there. We'll try to get him back on the phone to find out more about these two men now that are being held, locked up actually, while investigators look at the evidence existing, possibly against them.

Well, the fate of Michael Jackson is still being figured out in a tightly guarded room in California. Ten counts concerning Jackson's alleged abuse of a 13-year-old cancer patient have so far occupied four men and eight women for a little under 16 hours now.

We get an update from CNN's Ted Rowlands in Santa Maria -- Ted. TED ROWLANDS, CNN CORRESPONDENT: Kyra, the wait continues here. Jurors arrived a little early for their deliberations this morning, coming at 8:22. And that's when they started their deliberation process.

They had been at it awhile. So everybody outside covering it. The fans and surely, the interested parties are on edge, waiting for that word a verdict may come in.

As you mentioned, the jury is made up of eight women and four men. The foreman is a male, who is a retired high school counselor, a person that has worked with kids for years and may provide some insight as to children's behavior and may possibly -- believability.

This is a juror that took a lot of notes. He was seated in the corner with another gentleman that took a lot of notes. He's the one with the mustache there, on the -- on the sketch.

Now, Michael Jackson -- we've not heard an update as to the latest on him. According to his spokesperson, he has remained at Neverland Ranch throughout this deliberation process.

Jesse Jackson has been coming to the courthouse on a daily basis. He is here right now. And he has been giving updates on the Jackson family. But at this point, we have not heard anything new, if you will, about this.

Clearly, it is a wait. And as more time goes on, the tension level inside and outside this courthouse increases.

Fans have kept a vigil outside the courthouse constantly throughout this deliberation process. There are dozens of fans out here again this morning. And the judge has said that he's going to allow just one hour. So these fans are not taking any chance. They are camped out here.

The crowd a little bit thinner than we have seen in days past. But there are majority security concerns with this crowd, especially if the verdict does not go their way. Sheriff deputies will be on patrol in force, when the jury verdict is read.

It will be read -- we will be able to hear it live. The judge has allowed an audio-only feed from the courtroom, when this verdict is read, and presumably, these fans will hear it when it is read live -- Kyra.

PHILLIPS: All right, Ted if, indeed, a verdict is announced today, who exactly contacts Michael Jackson and what happens from there? Is he brought back to the courthouse? Give us the rundown.

ROWLANDS: When word of a verdict comes down, the attorneys will be immediately notified and, presumably, the attorneys will then notify Michael Jackson. Thomas Mesereau's team will notify Jackson.

He has an hour to get to the court. Clearly, they'll give him some leeway. But the idea is to leave as soon as possible. If he is at Neverland, which a spokesperson says he is, it takes about 40 minutes to drive.

And then once everybody is in place, the verdict will be read. If it is not guilty, Jackson walks out of the courthouse a free man. If it is guilty, he most likely will never go back to Neverland, or at least not for some time. Because he will be, it is presumed, remanded into custody. His bail will be revoked, because he would be considered a major flight risk. A lot at stake here when that verdict is read, obviously.

PHILLIPS: All right. It's going to be a busy day, I can just feel it. Ted Rowlands, live from Santa Maria, California, thank you so much.

Well, if you got shot on the job, your boss would probably understand if you went home for the day, right? Well, this pizza guy decided to keep the pepperonis coming after he took a bullet. He tells his story straight ahead on LIVE FROM.

ELIZABETH COHEN, CNN CORRESPONDENT: Also straight ahead, doctors are calling it a miracle, a medical first, an ovarian transplant resulting in a bouncing baby girl. We'll tell you how they did it when they come back.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DUSTIN HOFFMAN, ACTOR: Mrs. Robinson, you're trying to seduce me.

(END VIDEO CLIP)

PHILLIPS: And Mrs. Robinson, Anne Bancroft, seduced an entire movie audience, or movie audiences, in "The Graduate." By the way, she was just 36 when she made this movie, only six years older than Dustin Hoffman, by the way. And despite the Robinson renown, Bancroft was dismayed that the role eclipsed much of her other work, including her Tony- and Oscar-winning portrayal of Helen Keller's teacher, Annie Sullivan, in "The Miracle Worker." Also an Emmy winner, Bancroft was one of the handful of actors to earn the so-called Triple Crown.

Bancroft was married for more than 40 years to producer, writer and actor Mel Brooks. Their son, Max, was born in 1972.

Anne Bancroft died Monday of cancer. She was 73. Tonight, the lights on Broadway will dim in her honor.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

STEFANELLI: Wrist, one shot was fired then. Went off that way. Probably in the house somewhere. When at that point, I did like this with the bag where I flipped it in the face, took him by the neck and took him down to the ground over here.

UNIDENTIFIED MALE: The next thing Tom knows, another shot is fired and the attempted robber takes off. So what did Tom do?

STEFANELLI: My customers come first. I always take care of my customers.

UNIDENTIFIED MALE: He delivered the rest of his pizzas. Only one problem.

STEFANELLI: I didn't realize I was shot at the time. Until I started driving down the road.

UNIDENTIFIED MALE: Yes that second shot hit Tom's left leg.

STEFANELLI: Clean through and through.

UNIDENTIFIED MALE: The .32 caliber bullet even hit his wallet.

STEFANELLI: Through the pictures and out the back right there.

UNIDENTIFIED MALE: Dedication? You bet.

STEFANELLI: I don't like to leave a job undone. I like to finish what I start.

UNIDENTIFIED MALE: And finish the job he did: four deliveries, after being shot in the leg. That's why Tom says he's one of the best pizza delivery persons around. And now also one of the most famous.

STEFANELLI: My phone is going off the hook. Now I got "Current Affair" calling me.

(END VIDEOTAPE)

PHILLIPS: I hope Tom gets a raise, too.

Well, an update now on the Los Alamos lab whistleblower that was badly beaten outside a bar last weekend. Thomas Hook has been released from a Santa Fe hospital after last weekend's attack.

Hook says that he went to the bar to meet someone who wanted to talk to him, but that person never showed up. Hook's wife and lawyer say he was lured and attacked to stop him from testifying later this month at a hearing about the nuclear weapons lab.

Another accounts are coming out, including one from a dancer at the club, who claims Hook got a lap dance from a waitress. Hook's lawyer says his client didn't interact with any girls at that club.

Well, now to a medical first and how a twin sister helped a young Alabama woman become a mom. CNN's Elizabeth Cohen has more on this first successful ovary transplant.

Pretty neat story. COHEN: It is a neat story. The doctors, in fact, are calling it a miracle that this woman was able to have a baby. They tested this out on theory, on animals for decades, and it turned out that it really did work.

The woman's name is Stephanie Yarber. She's 25 years old, and she had had ovarian failure at age 14. And doctors don't know completely why. So she hadn't had a period in 10 years.

Her twin sister, however, and her name is Melanie Morgan, had three children. So she obviously was quite fertile. And there you see them right there. So you had that situation. She had tried IVF. It didn't work. And so Melanie gave her sister some of her ovarian tissue. And that was in April 2004.

And then in July 2004, her sister had her first light menstrual cycle. It wasn't quite normal. And then in September 2004, she had her first normal cycle. And then in October 2004, the pregnancy was confirmed. And then just two days ago, her baby was born.

They haven't said the name yet. But we do know it's a healthy baby girl. Seven pounds, 15 ounces.

PHILLIPS: Wow. Now, you were saying back when -- it was a miracle just to have a kidney transplant. Well, now we see them happening on a regular basis. So could this miracle turn into something that could happen obviously more than once?

COHEN: It could, but it would take years. I mean, right now, they've only proved the principle in two women who are identical twins. So that she didn't -- Stephanie didn't have to take anti- rejection drugs. There's obviously some huge problems with that.

So now the question is, would this work in two women who are not identical twins? But we're talking about kidneys. Fifty years ago, that's where they started, with identical twins. And then as the years passed, they tried it in siblings. And now you don't even have to be related to get a kidney transplant.

PHILLIPS: All right, Elizabeth Cohen, thanks.

More LIVE FROM right after this.

(BEGIN VIDEO CLIP)

PHILLIPS (voice-over): Next on LIVE FROM, how secure is America's border? Customs agents let this man in, carrying a sword, a hatchet, a knife, and a blood-stained chainsaw. Now, he's suspected of murder.

Later on LIVE FROM...

UNIDENTIFIED MALE: I can become you tomorrow.

PHILLIPS: Stealing your identity. This guy proves just how easy it is. What you need to know to protect yourself. Also ahead, Nobel Prize winner Ernest Hemingway's legacy threatened. A peek inside his Havana hideaway reveals it's falling apart. What's being done to preserve it?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: Live pictures now. The president of the United States, making remarks on strengthening Social Security. (AUDIO GAP) builders and contractors in Washington, D.C. We're monitoring it. We'll bring you anything earth-shattering and breaking if it happens.

Well, big tobacco is getting a big break from the Justice Department. Susan Lisovicz has the story live from the New York Stock Exchange.

Hi, Susan.

(STOCK REPORT)

(COMMERCIAL BREAK)

PHILLIPS: Right now in the news, a judge in Aruba rules that there is enough evidence to continue holding two hotel security guards suspected in the disappearance of an 18-year-old Alabama student. Nick John and Abraham Jones will be detained for another eight days so prosecutors have more time to gather evidence in the case. Natalee Holloway was last seen nine days ago while on a class trip to Aruba.

In Florida, two fired America West pilots have been convicted of operating an aircraft while drunk. We just got the word in. A Miami jury found them guilty. The sentencing will be in July.

In Lodi, California, federal agents have searched the homes of two top Muslim leaders. The men have been arrested, along with a father and a son, as part of an ongoing terror investigation. According to an FBI affidavit, the son confessed to attending an al Qaeda training camp in Pakistan in 2003 and 2004. The latest on the investigation coming up at the top of the hour.

More now on the terror arrests in Lodi, California. An American born son of a Middle Eastern immigrant supposedly has admitted training to kill other Americans at an al Qaeda camp in Pakistan. He and his father are charged with lying to the FBI and two local clerics are in trouble, too, for alleged visa violation.

We want to dig a little deeper into what this means with Nic Robertson, who joins us now, live from London. And Peter Bergen -- I'm sorry, Peter Bergen, I apologize. Our terrorism analyst, joining us live from London. I was getting word that we only had Nic and not you. And I apologize. We have you. That's good news. Good to see you.

PETER BERGEN, CNN TERRORISM ANALYST: Good to see you, Kyra.

PHILLIPS: All right.

BERGEN: So...

PHILLIPS: Let's talk about these two individuals. You've obviously been following this case, before we got word of what happened today, right?

BERGEN: Well, I mean, one of the things that's interesting is that the father in the case says that his son trained at a training camp run by a guy called Malana Raman (ph), who is a fairly well known political figure in Pakistan. He has a rather large religious party.

That raises some questions in my mind about whether, really, this was really an al Qaeda training camp. The training camp is supposed to be near Rawalpindi, which is the headquarters of Pakistan's army and also very near the capital of Pakistan, Islamabad. I find it very hard to believe that al Qaeda would be running a major training camp so near our army headquarters. It's more likely to be a Kashmiri militant group. That makes much more sense. Now that may be a distinction with that, a difference with a sense that these Kashmiri militant groups certainly have links to Al Qaeda.

And the fact that if indeed the allegations in this FBI affidavit are correct, that this guy from California, second generation, was getting paramilitary training, was learning how to use explosive, et cetera, that's pretty worry.

It's also the first time that I can remember a second-generation Muslim-American in the post-9/11 era supposedly training at a paramilitary training camp aimed at killing Americans. So I think that's pretty significant.

PHILLIPS: All right, so if Kashmiri militant versus Al Qaeda training camp, you're saying it's still -- the intensity is still the same, even though it may be two different things. If we say Kashmiri militant training and Al Qaeda training, is it still that same level of a threat?

BERGEN: Well, the Kashmiri militant groups have tended to really be concerned about one issue, which is Kashmir. Al Qaeda is interested in attack Americans, and Kashmiri militant groups, generally speaking, haven't.

But that may be just getting in the weeds too much. The fact that this guy was getting paramilitary training, according to this affidavit, you know, I think is pretty significant. We haven't seen much example of sleeper cells in the United States since 9/11. There was an Ohio trucker by the name of Farris (ph) who was planning to sabotage the Brooklyn Bridge. He was convicted of that plot. But otherwise, we haven't seen that phenomenon, and certainly not second generation Muslim-Americans engaging in this activity.

PHILLIPS: And what does that tell us, Peter, about cells here at home, in the United States? Do you think this is just a couple of people, or do you think this is going to lead into something much bigger? BERGEN: I suspect that it's more the former. You know, the FBI, in a leaked memo back in March, said they have found really any evidence of sleeper cells. This is before this case went into play. So I think that -- I don't -- I sort of doubt that, you know this is going to be the tip of the iceberg. I think this is a significant case, but I don't think suddenly there will dozens of other people turned up in the Sacramento area who are part of this conspiracy.

PHILLIPS: What does this tell us about the mosques -- well, I guess, first of all, I should lay out do we know for sure that the leaders in this mosque, the imams, two of whom are being held right now, are definitely tied to this father and son that allegedly got this training, and what does that tell us about the operations of mosques, and are they being monitored, should they be monitored, is that discriminatory?

BERGEN: You know, it may tell us not very much. You know, it seems the father's mistake was to know what his son was doing, to provide him with some financial help, and also lying to federal investigators. That's sort of the Martha Stewart mistake. And so it seems that the charges against the father are reasonably serious. As to what the imams at the mosque were doing, I really have no idea.

PHILLIPS: So, Peter, also, too, allegedly, the way the FBI came about this father/son duo is because they were flying back and forth from the states and Pakistan and a name -- their name, one of the names, was on the no-fly list. So while lately we've been hearing all these incidents of individuals on the no-fly list not being tied to terrorism, could this possibly be a sign that, OK, maybe the no-fly list does work?

BERGEN: Well, it does work to a certain extent, except that they did allow this guy to get on the plane. It was diverted to Japan, and he was interrogated, and then sent on to the United States. But it's not the only example I can think of where terrorists or alleged terrorists, you know, managed to get on American Airlines. Think about Richard Reid, the so-called shoe bomber. The first time he try to get on the flight between Paris and Miami that he was attempting to blowup he was turned away. He came back the second day. He got on. So by the law of averages, some people are going to get through.

PHILLIPS: All right, Peter, I hear we now have our CNN senior international correspondent Nic Robertson also joining us live from London with some additional information.

Nic, I know you've been working your sources. What can you tell us?

NIC ROBERTSON, CNN INTL. CORRESPONDENT: Well, we're getting just a little bit more information about the man who is allegedly responsible for that training camp just outside of the Pakistani capital of Islamabad, close to the town of Rawalpindi. Milano Faceal Rahman Khalil (ph) is part of the Hezbi Mujahadin Group. And he has been suspected for a long time, according to Pakistani Authorities, suspected for a long time of running this type of training camp. Indeed, over the last few years, we're told that he has been picked up and detained by Pakistani intelligence officials on several occasions and questioned.

Also it's interesting to note that in that 1998 cruise missile attack against Osama Bin Laden, he came out -- was the only jihadi leader who came out and held a press conference. And at that time -- again, this is all alleged in the affidavit. At that time when he came out and held a press conference following that attack, he said that more than a dozen of his people is have been killed, and that he would seek revenge against the United States for it. A contact spoke with him in Pakistan just 2 1/2 months ago, and at that time Milano Faceal Rahman Khalil was claiming to have cancer at that particular time, just two-and-a-half months ago, a free man in Pakistan.

PHILLIPS: All right, so, Nic, it's hard, because we don't have pictures of all these various individuals. So these two individuals, this Hamid Hayat and Umar Hayat, the father/son duo that has been taken in by authorities from the Sacramento area, this mosque in Lodi, tell me the possible connection you are saying between -- or among those two, with this Khalil individual that you are talking about. Am I getting that right?

ROBERTSON: Indeed. Hamid went to the religious school and was encouraged by relatives and contacts there to go to the training camp. The training camp that he mentions in the affidavit and says in the affidavit, was run by Khalil. He gives an abbreviated version of his name. This camp run by Khalil. Khalil, suspected by the officials in Pakistan of running such camps, has been detained by Pakistani officials in the past and questioned about training young people to go to Afghanistan and to fight against the Americans in Afghanistan. So there is a track record, if you will, against this individual who is alleged to have run this camp Hamid is alleged to have trained at.

PHILLIPS: Our senior international correspondent Nic Robertson, and also our terrorism analyst Peter Bergen. We'll continue. Thank you both very much. We'll continue to follow this story.

Of course if you're just tuning in, about this American-born son of a Middle Eastern immigrant, supposedly admitted to training at an Al Qaeda camp in Pakistan. Still trying to hammer out if indeed it's a Kashmiri military camp, as Peter Bergen just mentioned, or indeed an Al Qaeda camp as Nic has been talking about. We're working the story, obviously, going to bring you more information and what this means to our security here in the United States and possible sleeper cells existing in the U.S.

We're going to take a quick break. More LIVE FROM right after this.

(COMMERCIAL BREAK)

PHILLIPS: Well, a truly curious story now from the northern U.S. border and one with a tragic twist. American customs officials are explaining today why they allowed a man into the country from Canada who by all appearances should never have made it in. The reason surprised us. It's going to surprise you, too.

Here's CNN's Jeanne Meserve.

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JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): The place where the St. Croix River slices between Canada and the U.S. has its share of unusual characters, but the man who showed up at the quiet border crossing at Calais, Maine, on April 25, 22-year-old Gregory Despres, was more than unusual.

Eddie Young was also trying to enter the U.S. that day.

EDDIE YOUNG, CROSSED BORDER: He was quite the funny-looking person. His eyes were wide opened. His hair was all wet, and the mohawk, and the hair came down in the center of his face.

MESERVE: Even more unusual, what he was carrying. Court records show he had a homemade sword engraved with his name and a swastika, a hatchet, a knife, two homemade brass knuckles, pepper spray, zip cuffs, a flak jacket and a small chain saw, spotted with what authorities say appeared to be blood.

YOUNG: The America border patrol had the swords out and doing -- you know, swinging them around. The chain saw got picked up and it was going, you know -- they looked things all over. They were, you know, putting the bass knuckles on, stuff like that.

MESERVE: Despres had dual Canadian and American citizenship. A police report says Despres told border officials he was the sergeant in the Marine Corps, had a helicopter waiting for him and worked for the president.

(on camera): U.S. Customs and Border Protection held him here in Calais, Maine, for two hours. They ran his name against criminal databases, talked to law enforcement on both sides of the border. Having found no outstanding warrants and having determined that he was a U.S. citizen, they let him into the country.

(voice-over): Customs and Border Protection would not talk on camera, but a spokeswoman tells CNN: "There was nothing that we could hold him for. And being a U.S. citizen we couldn't force him to go back to Canada or anything like that."

MESERVE: Agents did confiscate his weapons.

(on camera): But just one day after Gregory Despres crossed into the U.S., a horrific discovery at this small house in Minto, New Brunswick: two bodies.

(voice-over): The victims -- Veronica DeCarry, known as Verna, and her common law husband, Fred Fulton, a well-known local musician.

MICHAEL RICHARDSON, FRED FULTON'S NEPHEW: He played everything. He would play everything and he was a big Chet Atkins fan, so he loved his music, and... MESERVE: Didn't I say -- hear he was called the Chet Atkins...

RICHARDSON: The Chet Atkins of Minto.

MESERVE: Gregory Despres lived in this small shed on the property next door to Fulton's home. It has been dismantled in the weeks since the murders. Denny Petitpas lives down the street.

DANNY PETITPAS, VICTIM'S NEIGHBOR: I knew the young fellow was strange. I mean, he would get mad go into his shed or in his camper and smash things and scream.

MESERVE: For two years, neighbors say, Despres escalated a feud with Fulton over a property line, a drainage ditch, and other issues.

PETITPAS: He wouldn't met you halfway. He just -- if you had a problem with what he was doing, well, you was going to have a bigger problem with what he's going to do next.

MESERVE: After one confrontation, Despres was convicted of assaulting Fulton's grandson with a knife. Just hours before he was to be sentenced, the murders occurred. Sargent Gary Cameron of the Royal Canadian Mounted Police.

SGT. GARY CAMERON, ROYAL CANADIAN MOUNTED POLICE: And it was a very bloody scene, and it was very traumatic.

MESERVE: An RCMP report alleges that Despres kicked down a kitchen door and made his way to the bedroom where he stabbed Verna DeCarry and Fred Fulton several times. Fulton tried to barricade himself in the bathroom, but after a struggle, he was decapitated, his severed head left in a pillowcase next to his body.

PETITPAS: The investigator that was investigating this from Toronto, he said, you guys don't really know how lucky you are, because once he had done what he had done there, he had nothing to lose. He could have cleaned the whole neighborhood.

MESERVE: Instead, authorities alleged Despres took Fulton's car and abandoned it near the U.S. border. Right after the bodies were discovered, the Mounties and FBI put out lookouts for Despres, who they now realized had crossed the border.

Despres' Massachusetts driver's license number led to a marina in Mattapoisett, near Cape Cod, where he had once lived in an old cabin cruiser. Suspecting he might come back, Mattapoisett police made up wanted posters. Late on the day the bodies were discovered Officer Andrew Murray was distributing those posters.

OFC. ANDREW MURRAY, MATTAPOISETT POLICE DEPARTMENT: Right around this corner up here, I observed a subject walking matching the physical description of the subject we were looking for.

Right around this corner up here, I observed a subject walking, matching the physical description of the suspect we were looking for.

MESERVE: Murray came back to question the young man through the window of his cruiser.

MURRAY: His poster was face-up on the passenger seat. At that time I reached over, flipped it over so he wouldn't recognize his own picture.

MESERVE: The young man identified himself as Gregory Despres from Canada. Murray pretended he didn't know Despres was wanted and pulled into a parking lot to wait for backup.

MURRAY: We handcuffed him right here. He was laying down, prone down, face down on the ground.

MESERVE: Despres was wearing a flak jacket.

MURRAY: He had a light brownish, reddish stain on his flak jacket which would be consistent with blood -- dried blood.

MESERVE (on camera): How did he explain that?

MURRAY: He just said it was from him skinning deer.

MESERVE (voice-over): Underneath Despres' clothing, a 10-inch swastika tattoo on his back. Despres told police he was on a secret mission with the Marines and was wanted for murder in Russia, but now he is charged with two counts of murder in Canada. He is not yet represented by counsel there and his family declined comment.

(on camera): Some people are dumbfounded that in this post-9/11 world of heightened security where even a traveling grandmother could be subjected to extra scrutiny, someone like Despres, with his odd demeanor and appearance and cache of weapons, crossed this border so easily.

(voice-over): But a former customs and border protection lawyer said the agency had no alternative. No crime had been discovered. And Despres, a U.S. citizen, had a right to enter his country.

STUART SEIDEL, FORMER CUSTOMS ATTORNEY: We still have a country of laws. We still have a Constitution. And I think what they did here was appropriate.

MESERVE: Though extradition proceedings are under way, it is unclear how long it will take for Despres to cross back to Canada to face the music.

For CNN's America Bureau, Jeanne Meserve, Minto, New Brunswick.

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PHILLIPS: And an update now on an ongoing terror investigation, this one out of Florida. We've learned today the Florida doctor accused of helping al Qaeda will be extradited to New York to stand trial. You remember Dr. Rafiq Sabir is an emergency room physician. He and another man, both U.S. citizens, were busted in an undercover FBI sting. Both reportedly pledged loyalty to Osama bin Laden.

We'll have more on this later. We'll be back right after a quick break.

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PHILLIPS: Picture of the day. Get a look at this innovative bit of a fashion design. No, it's not the new couture line from Gucci or Calvin Klein. Calfin Klein, maybe. Well, this woman was wearing her modified undergarment here and was hooked by an Australian airport police, trying to smuggle more than 50 live tropical fish. We're going to spare you the details of how they actually found them. Let's just say it's tough to walk around normally with bags of fish in your skivvies.

Well, a true piece of American cultural history is in danger of falling apart and it's going to take some historical cooperation to try to rescue it. We're talking about a home once owned by Ernest Hemingway. And here's the problem: it's in Cuba. Papa wrote "For Whom the Bell Tolls" and other classics while in this farmhouse outside Havana. Hemingway lived there for more than 20 years and little has been done to preserve it.

CNN's Lucia Newman reports on what it will take to save a national treasure.

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LUCIA NEWMAN, CNN CORRESPONDENT: This 19th century estate on the outskirts of Havana was the first home Ernest Hemingway ever bought with his money.

GLADYS RODRIGUEZ, HEMINGWAY MUSEUM (through translator): He loved it so much that in 1940 when Paramount pictures paid him the royalties for the film "For Whom the Bells Toll," he buys it for $18,500.

NEWMAN: Gladys Rodriguez, curator for what is now the Hemingway Museum, took us on an exclusive tour of the house where the American novelist lived from 1939 to 1960, a period in which he wrote many of his most famous works.

But Hemingway's beloved Finca Vigia, as he named it, is in danger. The ravages of time, neglect and tropical humidity threatening a cultural heritage shared by Cuba and the United States.

RODRIGUEZ (through translator): This is the room that's in the worst shape, where Hemingway used to write. You can see that the humidity has swollen the beans, cracking the floor tiles and the ceiling.

NEWMAN: The U.S. National Trust for Historic Reservation has placed Finca Vigia on its list of 11 most endangered historic sites, the only one outside of the United States. There's plenty worth preserving, from Hemingway's cherished library to the bathroom that gives insights into his obsessions.

On the wall, he scribbled his weight almost every day, with comments like "17 days off diet," "five drinking." (on camera): The house is now closed to the public. Cuba's culture ministry have earmarked about a quarter of a million dollars to start the restoration. And while Cuba says it can do it on its own, but also admits it will be harder and take a lot longer without outside help.

(voice-over): The National Trust for Historic Preservation hopes Washington will grant it a special license to bypass the U.S. economic embargo on Cuba so that it can provide more money and expertise.

PAUL EDMONDSON, V.P., NATIONAL TRUST: It is a very unique site. It's a -- the home of an American cultural icon that has very important historical significance to the American people.

NEWMAN: A rare opportunity for cooperation between Hemingway's country of birth and the one he fell in love with, at a time when only water divided the two nations.

Lucia Newman, CNN, Havana.

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PHILLIPS: And before we leave this subject, check out this great image of Ernest Hemingway. Here he is. You'll see him on the left there, of course, along with Alec Guinness and Noel Coward in Havana in 1958. Well, they were photographed during the filming of "Our Man in Havana," which also starred Burl Ives and Maureen O'Hara. That film, by the way, was one of the last American movies made in Cuba before Fidel Castro took power.

Well, coming up in the second hour of LIVE FROM, U.S. and Iraqi troops search for insurgents in Tal Afar, Iraq. Our Jane Arraf is embedded with American troops there. She's going to bring us the latest when LIVE FROM continues right after a quick break.

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CAPT. SCOTT O'GRADY: And as soon as the missile hit, the only thing I saw was a cockpit disintegrating in front of me.

AARON BROWN, CNN CORRESPONDENT (voice-over): Captain Scott O'Grady spent six days struggling to survive after being shot down in Bosnia in 1995.

O'GRADY: My heart started racing, and then I heard Basher one one up on the radio.

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UNIDENTIFIED MALE: I'm alive, I'm alive.

UNIDENTIFIED MALE: Copy that, you're alive.

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BROWN: Little did he know those six days would change his life forever.

O'GRADY: I just want to have a normal life and just continue on.

BROWN: O'Grady immediately found himself thrust into the spotlight recounting his story for millions, and he continues to do so today, 10 years later. He has published two books, "Return with Honor" and "Basher Five-Two," a children's edition of his story. After 12 years serving his country, O'Grady is now pursuing a Master's at Dallas's Theological Seminary.

O'GRADY: I believe that you shouldn't be ignorant as to what you believe. You should understand why you believe it.

BROWN: Once graduated, Scott O'Grady says he wants to dedicate his life to giving back to both his community and his country.

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