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Millions of Veterans' Personal Data Stolen; Interview With Idaho Senator Larry Craig; Louisiana Congressman Facing Bribery Investigation; Virtual Black Markets for Personal Information; Military Veteran Faces Deportation

Aired May 22, 2006 - 15:00   ET

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

TONY HARRIS, CNN ANCHOR: Names, Social Security numbers, birth dates, personal information on millions of U.S. veterans, stolen -- it's a developing story we have been following all afternoon.
Our Jamie McIntyre joins us live from the Pentagon with more details -- Jamie.

JAMIE MCINTYRE, CNN SENIOR MILITARY AFFAIRS CORRESPONDENT: Well, Tony, you know that old adage don't take your home -- your work home...

HARRIS: Yes.

MCINTYRE: ... with you?

Well, there's a good reason for that. Apparently, a Veterans Administration employee took work home with them on a computer disk. It turned out it contained very sensitive information, including the names, Social Security numbers, date of birth, and some disability ratings for about 26.5 million veterans, including their -- some of their spouses.

And then his home was burglarized. And now the information has been lost. A short time ago, the veterans affairs secretary told CNN exactly what happened.

(BEGIN VIDEO CLIP)

JIM NICHOLSON, SECRETARY OF VETERANS AFFAIRS: Disturbing is right. We had an employee here, a data analyst, who took this data home to work it. And his home was burglarized.

And people took -- took this data. We think that it wasn't a targeted burglary. They weren't after this. There's a pattern of these kinds of burglaries in this particular neighborhood. But we are -- we think being, you know, appropriately cautious, to make -- to get the word out to the veterans that the possibility exists.

(END VIDEO CLIP)

MCINTYRE: Now, again, the -- the FBI is looking into this. They have no way of knowing whether the people who stole this information know how valuable it is. But it includes -- again, it affects some 26.5 million vets, some of their spouses, names, Social Security numbers, some birth dates, and also some disability ratings. No health information, though, we're told, was on this computer data.

So, the FBI has got a full investigation going. People who are affected will be getting individual letters from the veterans secretary explaining what happened. And, meanwhile, they say people should just be very vigilant in checking their bank statements and credit card statements, if they think they are in this group, for any unusual activity.

This theft occurred earlier this month. So, if there was suspicious activity, it would start showing up now. So, far they have no evidence that any of the information has been used for identity theft -- Tony.

HARRIS: OK, I like that. Bank statements, credit card statements, start checking them right away.

Jamie McIntyre at the Pentagon -- Jamie, thank you.

V.A. Secretary Jim Nicholson tells us, every living veteran from 1975 to today is in those records. How worried should they be?

Joining me now on the phone is U.S. Senator Larry Craig, chairman of the Veterans Affairs Committee.

Good to talk to you, sir.

SEN. LARRY CRAIG (R-ID), VETERANS AFFAIRS COMMITTEE CHAIRMAN: Well, thank you, Tony.

HARRIS: Well, I have to ask you, how concerned are you, first of all? And maybe that translates to how concerned veterans should be.

CRAIG: Well, certainly, veterans need to be concerned. And they need to do all that you have just been talking about, and checking their own financial records and being vigilant.

It's a great number of them out there, both them and their spouses' information. We still don't know if this was a random burglary, in which they were more interested in the computer than the information in it. And, for me, as an authorizer on a committee responsible for veterans and veterans' issues, I will -- I will take it much further than that.

HARRIS: Yes.

CRAIG: Obviously, the secretary has done his due diligence. He's got the IRS and the Social Security involved. And the information is flowing out. And a call bank has been stood up for additional information to be provided to veterans.

But I have got to ask, and, certainly, I have got to ask it of not only V.A., but all of government, why can a data analyst take all of this information home?

HARRIS: Uh-huh.

CRAIG: That's a breach of security in today's concern about I.D. theft that is huge. And, of course, I think it awakened the secretary to the vulnerability...

HARRIS: Yes.

CRAIG: ... within his own organization. And that's true, I would guess, across government.

HARRIS: Senator Craig, is this one of these stories where we're going to find out a couple of days from now that -- that this kind of thing happens a lot, where analysts take this kind of information home? What do you think?

CRAIG: Well, we just may well find that out. You know, in -- in the day of modern electronics...

HARRIS: Mmm-hmm.

CRAIG: ... and telecommunication -- commuting and all of that kind of thing, there's nothing wrong with that, to a degree, depending on the sensitivity of the information.

Then, the question has to be asked, are these data entry analysts -- at this level, do they have background checks? Because we know that this kind of information in the wrong hands can be very valuable.

HARRIS: Does it make sense to you at this point -- and I understand we're early in the investigation on all of this -- that this is a random burglary that just happened to happen at the house of an analyst who just happened to have this kind of information?

It just seems -- well, you know where I'm driving.

CRAIG: Yes, I do know where you're driving. The -- and I agree with you. I -- I -- I follow the same logic and say, wait a moment here. At the same time, apparently, there were a pattern of burglaries of this kind in that particular neighborhood.

So, you have got a little bit of that to fall back on. We don't know yet, to be sure. My staff and I will work very closely with the V.A. At the appropriate time, we will hold oversight hearings. At -- you know, at this time, with the investigation under way, with the FBI involved, and all of that, there are a lot of questions we can ask in which they will simply say, we cannot give you answers yet because of the investigation.

So, we're caught a bit in that, but...

HARRIS: Yes.

CRAIG: ... the government -- the president has just stood up this Identity Theft Task Force. And I think this is something now that really deserves our overview and a review by all of government, as it relates to this kind of information and how it is being handled.

HARRIS: Very good. Senator Craig, thanks for your time. Appreciate it.

CRAIG: Tony, thank you.

HARRIS: If you have questions, you can go online or on the phone. You can log on to www.firstgov.gov or www.va.gov/opa. You can also dial up 1-800-FED-INFO to get the answers you need.

Ninety thousand bucks in cold hard cash allegedly stuffed in a congressman's freezer -- the FBI says it found the stash in William Jefferson's Washington home last year -- that information in a newly released court document, which says the money was part of a payment delivered by an FBI informant.

Jefferson, an eight-term Louisiana Democrat, is facing a bribery probe, but he has not been charged yet. He vows he will stay in office.

(BEGIN VIDEO CLIP)

REP. WILLIAM JEFFERSON (D), LOUISIANA: I will take full...

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. WILLIAM JEFFERSON (D), LOUISIANA: I will take full responsibility for any crimes that I committed, if that were the case.

But I will not plead guilty to something I did not do, no matter how things are made to look, and no matter the risk.

(END VIDEO CLIP)

HARRIS: Well, FBI agents searched Jefferson's Washington office yesterday. It reportedly was the first time agents have searched a lawmaker's Capitol Hill office.

Let's go to Betty now for more on the developments in this particular story -- Betty.

BETTY NGUYEN, CNN CORRESPONDENT: Yes.

That search happened over the weekend, both Saturday and Sunday. And one government official told CNN that was the first time a person's office has been searched on Capitol Hill, a lawmaker's office.

But here's what we know. At 4:30 Eastern today, we understand that Representative William Jefferson will speak publicly about this investigation, about his alleged role in it. But he says, Tony -- you heard it right there -- he vows to stay in office, and he's not going to plead guilty to something that he says he did not do.

But this investigation has been going on since March of 2005. That's when the FBI stepped in and started this. And, as you noted, there was a -- a lot going on over the weekend -- and, then, last year, when they searched Jefferson's home in Washington, as you said, $90,000 in cash in his freezer.

Got a little bit more information about that. That -- that cash was divided among various frozen food containers. It's all very, very interesting here. Don't know if it really relates to any crime, because, as we heard...

HARRIS: Right.

NGUYEN: ... Jefferson says he is innocent. But we're going to hear from him today, hear more about this investigation and what he says his role was in it, if, indeed, he had a role in it.

HARRIS: OK, 4:30 p.m. Eastern time, that puts us squarely in "THE SITUATION ROOM..."

NGUYEN: "THE SITUATION ROOM."

HARRIS: ... with Wolf Blitzer.

NGUYEN: Mmm-hmm.

HARRIS: OK, Betty. Appreciate it. Thank you.

NGUYEN: Sure.

HARRIS: Political progress in Baghdad, where a fractious parliament has signed off on a new Iraqi cabinet. But the violence goes on. Fourteen insurgents were killed yesterday in fighting with the Iraqi army. Today, 16 Iraqis, seven of them police officers, were killed in a string of attacks across the country.

President Bush is calling the new Iraqi cabinet a victory for the cause of freedom. In a speech this morning in Chicago, he also saluted the sacrifices made by Americans.

(BEGIN VIDEO CLIP)

(APPLAUSE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our nation has been through three difficult years in Iraq. And the way forward will bring more days of challenge and loss. The progress we have made has been hard-fought and has been incremental.

There have been setbacks and missteps, like Abu Ghraib that were felt immediately and have been difficult to overcome. Yet, we have now reached a turning point in the struggle between freedom and terror.

(END VIDEO CLIP) HARRIS: Iraq's new cabinet met for the first time yesterday.

Iraqis want to take more control of their own country, but are they taking on more than they can handle?

Here is CNN's Ryan Chilcote.

(BEGIN VIDEOTAPE)

RYAN CHILCOTE, CNN CORRESPONDENT (voice-over): Iraqis in charge of their own security everywhere, except in Baghdad and western Iraq, by the end of the year? Iraq's new prime minister is hoping so, unveiling the most ambitious timetable announced by any leader yet. This June, he hopes, the handover could begin in the southern regions of Amara and Samawa.

His British counterpart, though, in Iraq for a surprise visit, declined to be so specific.

TONY BLAIR, BRITISH PRIME MINISTER: There is the notion, which has been there, say, for a significant period of time now, of slowly being able to release individual provinces into the full control of Iraqi forces. But, as we both stress, as the prime minister said in his address yesterday, it's an objective timetable, in the sense that it depends on the conditions on the ground.

CHILCOTE: And Blair, who has sent some 7,000 troops to the south of the country, isn't the only one shying away from making specific predictions. The U.S. isn't making predictions either.

(on camera): The southern Iraqi regions of Samawa and Amara are known for being some of the most peaceful in Iraq. Assuming responsibility in other places could be much harder.

(voice-over): In the southern city of Basra, once a relatively quiet home to the majority of British troops, the conditions appear to be moving in the other direction.

UNIDENTIFIED MALE: Hey, Nata (ph).

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Building to the right, movement.

CHILCOTE: Things are worse to the north, where U.S. forces are most active. Car bombs and sectarian strife are killing hundreds of Iraqis each month. And, remember, the timetable didn't even include Anbar Province in the west -- it makes up a third of the country -- or Baghdad, where there's no sign the insurgency and sectarian strife will recede any time soon.

Ryan Chilcote, CNN, Baghdad.

(END VIDEOTAPE)

HARRIS: An update now on Tony Blair -- the White House says the British prime minister will come to Washington this week to meet with President Bush.

Let down by the levees, but it didn't have to happen that way. Coming up, live to New Orleans and a new report on what caused the worst-case scenario.

The news keeps coming. We will keep bringing it to you -- more LIVE FROM next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RAY NAGIN (D), MAYOR OF NEW ORLEANS: Ladies and gentlemen, this city is positioned for growth. This great city, New Orleans, is ready to take off. We have the levees being repaired. We have incentive dollars for businesses and for people. We also have the CDBG money to bring back our housing. We are ready to take off.

(END VIDEO CLIP)

HARRIS: In the wake of Ray Nagin's reelection as New Orleans' mayor, a new report finds much of the flooding that devastated his city didn't have to happen.

Didn't have to happen?

Sean Callebs is in New Orleans with details.

And, Sean, in this report, the Army Corps of Engineers accused of lethal arrogance?

SEAN CALLEBS, CNN CORRESPONDENT: Don't know if they would call it lethal arrogance. I don't know if they used that exact term.

But, without question, the finger is pointed at the Corps when it comes to the levee system. Just pan over here, and I will show you exactly what we're talking about. This is the 17th Street canal. Across there, you see flood walls.

Now, this report from the National Science Foundation -- and this report is going to carry some weight -- these are some of the best researchers in the nation. Basically, what it said is, as the floodwater came roaring down here during Katrina, it didn't overtop the levee, Tony.

It ate away the bottom. It eroded the soil. Once that happened, that wall gave way and just unleashed a torrent of water towards downtown, the Central Business District, those areas. The conclusion of this report, Tony, 80 percent, four-fifths, of the flooding that New Orleans endured didn't have to happen. That's not going to sit well with the residents.

HARRIS: OK.

CNN's Sean Callebs for us in New Orleans -- Sean, we appreciate it. Thank you.

Want to get right to Betty now, who is following developments. We are following everything having to do with Congressman William Jefferson from Louisiana today, certainly in the aftermath of the search of his Capitol Hill office yesterday.

Betty has a new development for us -- Betty.

NGUYEN: Yes.

The search over the weekend, both Saturday and Sunday -- and we just learned a few moments ago that the congressman will be speaking at 4:30 today. But he did a little bit of talking already. When he arrived at Washington National Airport, just a short while ago, he spoke to reporters.

And here's a listen to what he had to say.

(BEGIN VIDEO CLIP)

QUESTION: The search warrant for your office says that you took $100,000 in cash from a briefcase from Lori Mody's car. What can you say to that allegation?

REP. WILLIAM JEFFERSON (D), LOUISIANA: You know I can't talk about any specific allegations that are made in an affidavit or any other place. Our lawyers have asked me not to talk about those things, so, I will not.

I will simply say to you that there's two sides to this story. And we will have a chance in the right forum to express our side of it, to say what it is. But to -- there's -- there's -- this -- this is a -- a selective release of -- of information, which is incomplete, and, therefore, we think not what it should be.

QUESTION: Were you (INAUDIBLE) by the search in your office, sir?

JEFFERSON: Oh, yes. I -- I think it's unprecedented. There were no exigent circumstances that I'm aware of. And this is a matter that will have to be taken up in the legal process.

(CROSSTALK)

QUESTION: ... when you say incomplete, when you say...

(CROSSTALK)

JEFFERSON: I can't answer any details. I won't -- I won't -- I won't get into the facts of...

(CROSSTALK)

QUESTION: Congressman, are you going to resign?

JEFFERSON: No, I don't plan to resign.

QUESTION: When you say incomplete, did you take $100,000 in cash?

JEFFERSON: I -- I -- I have simply said to you that my lawyers have advised not to talk about the facts. And I will not talk about facts. I will simply say there are two sides to the story and that we will get our chance to make our side in the proper forum. And this isn't it.

QUESTION: Any more reaction to the search of your office, of the FBI spending the majority of the weekend in there, looking around?

JEFFERSON: No.

I just said that I believe it is completely inappropriate to use the police powers of the federal government to come into the offices of a congressman. This hasn't happened before.

And, frankly, the -- there's a -- there's a way to make a response to an inquiry for information, which my lawyers will carefully follow to do. But this isn't the way it should be done.

QUESTION: And, congressman, just -- let's -- how do you feel about the FBI investigation, that they had someone wear a wire on you?

JEFFERSON: I -- I have already said as much as I will say about this, because if I get into details about it, I will violate every -- every promise I have made to every lawyer I talked to...

(CROSSTALK)

QUESTION: You were just home with the voters. How are the voters reacting?

JEFFERSON: I think the voters are -- are reacting fine. They want to hear what the other side of the story is. And they will at some point soon, as well as we can do it.

QUESTION: Thank you, sir.

(END VIDEO CLIP)

NGUYEN: All right. You heard from Congressman William Jefferson, who represents East New Orleans, talking about the investigation into his relationship with telecommunication deals in Africa. And the FBI is wanting to know if there was some bribery involved.

As we mentioned, Tony, there were some searches going on over the weekend at the congressman's Capitol Hill office -- the congressman saying that that was unprecedented and inappropriate. And he says he is not going to resign and that there is two sides of the story.

We are hoping to hear his side of the story in depth, in a little more detail, at 4:30, when he will be speaking to the public -- but a lot going on in this, because this investigation didn't just start over the weekend. It's been ongoing since March of 2005.

And, in fact, last year, Tony, investigators searched his home in Washington and found $90,000, according to them and according to an affidavit, $90,000 in cash in a freezer.

So, all this information is very interesting, and the congressman saying, though, it is selective information that is being released, again, saying there are two sides of the story. So, we hope to hear his side at 4:30 today -- Tony.

HARRIS: OK, Betty. Appreciate it. Thank you.

Ready or not, here it comes, another hurricane season. We saw a record number of storms last year. What about the next six months? We will check in with CNN meteorologist Jacqui Jeras in a moment.

The news keeps coming. We will keep bringing it to you -- more LIVE FROM in a moment.

(COMMERCIAL BREAK)

HARRIS: It was a made-for-Hollywood rescue in the nearby community of Glendale. Check this out. The often bone-dry Los Angeles River is much higher than usual because of storms over Southern California. We don't know how this person got to a tiny island in the middle of the rushing water, but it took a fire department helicopter and a rescuer on a rope, as you see here, to get the person back to dry land.

Take a look at this, live pictures now from the same general area in Glendale, California, as that river rescue just a few moments ago that we showed you. Our picture is from KCAL, KCAL in Los Angeles. This is a mudslide, once again, a mudslide.

And you see at least one house there seems to be in a bit of danger. But we have gone from live pictures to tape now. Take a look at it. There you can see a bit of the sinkhole from that mudslide. This looks to be in a residential neighborhood. We will keep an eye on this situation for you as well -- a lot happening now as a result of all of the rains recently in California, a river rescue just about an hour ago, and now this mudslide in the Glendale area.

Well, ready or not, here it comes, another hurricane season. We saw a record number of storms last year. What about the next six months?

CNN meteorologist Jacqui Jeras is here with the new predictions.

Hi, Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Hey, Tony.

Well, I'm going to be a very busy person, I think...

HARRIS: Yes, you will be.

(LAUGHTER)

JERAS: ... as well as the rest of the CNN weather team.

(LAUGHTER)

JERAS: Another very active season is anticipated, but not as bad as what we saw last year. But, of course, it only takes one making landfall to cause us some big problems.

NOAA released their forecast this morning, and they are anticipating 13 to 16 named storms, eight to 10 of those becoming hurricanes, and four to six of them becoming major hurricanes. That means Category 3 or greater.

How does that compare to average? Here's the numbers. On the far side of your screen are what we typically see, so, everybody well above average, in particular the number of major hurricanes, as much as three times what we usually see in a year. So, that outlook is not good.

Now, Dr. William Gray from Colorado State University, along with Phil Klotzbach, they have been predicting this season already for a couple of months now. And their most recent update from April predicting 17 names storms. So, that's just a smidge above what NOAA has been saying, and right within the ballpark there with NOAA for the number of hurricanes and major hurricanes. So, there's a lot of high agreement among seasoned hurricane meteorologists.

First named storm really could happen any time now. June 1 is the start of the hurricane season. And the first named storm will be Alberto. And there you can see the list of -- your name -- and, yes, can you believe it, possibly a Hurricane Tony?

(LAUGHTER)

JERAS: But, hopefully, we won't get that far down the line.

(LAUGHTER)

JERAS: We have got our own Hurricane Tony, right here at CNN Center.

HARRIS: There you go.

JERAS: We have got a "Hurricane 101" fact for you. We have been bringing this to you all month long. Ten days away from the start of hurricane season. We think about storm surge. We think about the heavy winds. We think about the heavy rains. But what about tornadoes?

Tornadoes happen within hurricanes as well, particularly as they are making landfall. They usually develop in the right front quadrant of the storm. We get these little mini-spinners out of the hurricane. They tend to be weak, and they tend to be short-lived, but they can happen. And you might remember Hurricane Ivan, which made landfall around Gulf Shores, Alabama, a record number of tornadoes with that hurricane, 117 of them.

Of course, you want to stay tuned to CNN, your hurricane headquarters, for the latest on this coming hurricane season. And, if you need more information on preparedness or just some hurricane facts and figures to help you get ready, go to CNN.com/weather -- Hurricane Tony, back to you.

HARRIS: Yes, we would -- yes, that's a -- that's a tough notion to deal with. And, of course, it's a Category 3...

JERAS: Oh.

HARRIS: ... if it is Hurricane Tony.

JERAS: Could be. Well, you -- well, you, 5.

(CROSSTALK)

HARRIS: There you go.

(LAUGHTER)

HARRIS: There you go.

Jacqui, thanks.

(LAUGHTER)

HARRIS: If you are still resisting trading in your film camera for a digital one, your hobby may soon get a bit more expensive.

Susan Lisovicz is live from the New York Stock Exchange with that story.

Hi, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Tony.

It's just incredible how quickly digital has replaced film cameras. And with these kind of price increases, that trend will likely only accelerate. Eastman Kodak says it will hike prices on photo paper and chemicals used for processing by 4 to 10 percent, effective the beginning of July.

Last month, Kodak raised prices on film itself by 3 to 17 percent. And it's not just Kodak. Fuji said last week it is looking to raise prices of film and other products by 3 to 20 percent next month. It would be Fuji's first across-the-board price hike in 25 years. And Fuji is Kodak's arch-competitor. It's really been known for bringing prices down for film. So, it's an abrupt turnaround -- Tony.

HARRIS: So, Susan, is this all related to the shift from traditional film to digital photography? Or are there some other factors at work? LISOVICZ: There are other factors, Tony, but there's no question that the traditional film market has been shrinking by about 20 percent a year, due to the popularity of digital cameras. Already, Kodak and Minolta have stopped making film cameras entirely. And Nikon is moving in that direction.

Another problem, though -- and it's something we have talked a lot about here -- it's one of the fears that have been in the marketplace -- is the surge in the cost of raw materials, especially silver.

Silver earlier this month rose to a 25-year high, topping $15 an ounce for the first time since January of 1981. And that is a key raw material used to produce photo film. Companies are also blaming crude oil costs. They use plastics in many products and the price of plastic is heavily influenced by oil prices, something I didn't know.

HARRIS: Yes, I didn't know that either. What is happening on Wall Street? Are those numbers starting to turn around a bit?

(STOCK MARKET REPORT)

LISOVICZ: Stay with us, LIVE FROM will be right back.

(COMMERCIAL BREAK)

HARRIS: And Betty is following developments with Congressman Jefferson of Louisiana. Betty, what is the latest?

NGUYEN: Yes, Congressman William Jefferson is going to be speaking at about 4:30 Eastern time. We're waiting to hear what he has to say. As you know, an investigation is underway into his relationship with telecommunications deals in Africa and elsewhere.

The FBI went in fact went in search of his Capitol Hill office over the weekend both Saturday and Sunday. This coupled with searches of both of his homes, one in Washington and one in New Orleans. That one in Washington, according to federal investigators, is where they found $90,000 in cash inside a freezer.

Now, Congressman Jefferson says that he is innocent, that he is not going to resign. He's not going to plead guilty to anything that he didn't do. Let's take a listen to what he said just a few minutes ago when he arrived at Washington National Airport.

(BEGIN VIDEO CLIP)

REP. WILLIAM JEFFERSON (D), LOUISIANA: You know I can't talk about any specific allegations that I made in an affidavit or any other place. My lawyers advised not to talk about those things. So I will simply say to you that there are two sides to this story. And we'll have a chance in the right forum to express our side of it and say what it is. But there's -- this is a selective release of information, which is incomplete and therefore we think not what it should be.

(END VIDEO CLIP)

NGUYEN: So he calls what we have learned so far in this investigation a selective release of information. He says there are two sides to this story. And again, that he is not going to resign. So we will hear more from him at 4:30 today, when he will be speaking to the press.

But I do want to tell you though Jefferson's attorney says that investigation over the weekend, Tony, where they searched his office both Saturday and Sunday. Well his attorney calls it outrageous and not necessary. Jefferson himself says it unprecedented and inappropriate.

HARRIS: 4:30 this afternoon when you join Wolf Blitzer in "THE SITUATION ROOM." Betty, thank you.

NGUYEN: We'll be watching.

HARRIS: Millions of U.S. veterans are on alert today but it has nothing to do military duty. As you know if you've been watching LIVE FROM, computer records containing their personal information have been stolen from a government analyst's home. There is no evidence the data has been misused, but the story certainly spotlights the growing threat of identity theft. Our technology correspondent Daniel Sieberg has more.

(BEGIN VIDEOTAPE)

DAN CLEMENTS, CARDCOPS.COM: There's a thief that says he has a Citibank credit card or checking account and he wants to be paid WU, which is Western Union to make a deal. And if you want to make a deal with him, message him.

DANIEL SIEBERG, CNN TECHNOLOGY CORRESPONDENT (voice-over): Dan Clements of CardCops doesn't carry a badge or a gun, but he's on patrol in cyberspace in virtual black markets where thieves buy, sell and barter personal information in underground chat rooms.

The format is called IRC or Internet relay chat. a low frequency hum in the World Wide Web. Think of it as the Internet equivalent of C.B. radio.

CLEMENTS: This is just a guy posting that he's hacked into a checking account with a $2,100 balance and he's X'ed out the numbers. He is proving he has access to it and he wants to trade for some type of tool and he wants to split the money on this account.

SIEBERG (on camera): So this is somebody's checking account just waiting to be robbed?

CLEMENTS: Yes. And he's looking for help; he's looking for an accomplice.

SIEBERG (voice-over): It's a live look at identity theft. Chit chat among con artists happening in real time. If you've heard about personal data being stolen, a lot of it ends up here. CLEMENTS: This is what they call a gold profile. This is all the information on this lady. We have her e-mail address, eBay account, PayPal account, we have her first name, last name. We have her address, phone, we even have her Social Security number. We have her MNN, which is mother's maiden name. If the thief has this information, he can absolutely rip this lady's identity off in seconds.

SIEBERG (on camera): Dan, help me understand this I.D. thief community or black market, if you will. Each of those names down the right-hand side there, they are actual people in this virtual world trading all of this very real data in realtime?

CLEMENTS: That is correct. These people in the chat room, they are usually in Europe and they are trading credit cards and identities. They are swapping out different types of wears and tools so they can commit crimes. But they are real. They're doing this right now.

SIEBERG (voice-over): Clements doesn't have the means to track down the criminals, but he earns his living by spreading the word. His team alerts law enforcement, credit card associations and merchants, many of whom pay for his information. And he even notifies consumers whenever they spot a crime in the making.

CLEMENTS: Hello Nester (ph), my name is Dan Clements with CardCops and I'm investigating some fraud on your MasterCard ending in 1992.

SIEBERG: A man named Nester's (ph) entire personal profile is posted. We have no trouble calling him since well we have his home number.

(on camera): How do you feel knowing that all of this personal information of yours is in this chat room where anybody could come across it and buy and sell it? How does that make you feel?

UNIDENTIFIED MALE: Oh, my gosh. It's in a chat room?

SIEBERG: Yes.

UNIDENTIFIED MALE: Well no wonder because at this moment I'm still getting charges from even from Spain, Italy.

SIEBERG: Does it scare you that this is happening?

UNIDENTIFIED MALE: Well it does, yes.

SIEBERG: Is it too late for Nester now that this information is out there, Dan?

CLEMENTS: Well it's too late in one regard. But Nester, you can put a fraud alert on your credit file.

UNIDENTIFIED MALE: Well, I did that.

CLEMENTS: Oh you did that? That's good.

SIEBERG (voice-over): A little later, Clements gets a private communication.

(on camera): So Dan, somebody is messaging you right now?

CLEMENTS: Right. They are sending me an instant message. Let's see what they have to say.

SIEBERG: What do they often want?

CLEMENTS: This particular gentlemen is offering credit cards with CVV2, full info and PayPal. So he has those available and he wants to either sell them to me or trade them to me.

SIEBERG (voice-over): A whole new meaning to the phrase online shopping. Price tags on your priceless information, bought and sold in marketplace right under our noses. Daniel Sieberg, CNN, Calabasas, California.

(END VIDEOTAPE)

HARRIS: And another reminder if you're a veteran and if you have questions you can go on line or on the phone. Log on to www.firstgov.gov or www.va.gov/opa. You can also dial up 1-800-fed- info to get the information you need.

Five minutes, the lone survivor of a mine disaster in Kentucky says that's how long he says his emergency air lasted. Five of his comrades were killed after an explosion in this Appalachian mine early Saturday. The coroner said three of them managed to survive the blast itself but then died of carbon monoxide poisoning. Now there is word they were using the same kind of air packs as the victims of the Sago Mine disaster in West Virginia.

The lone survivor of Sago had called those packs into question about a month ago. The top mine official says the Kentucky survivor's pack worked properly.

Senseless, a total waste of human life. Those words from the police chief in Baton Rouge after a Louisiana man took aim at his in- laws in church. Police say Anthony Bell began his rampage yesterday at the church where his mother in law preached. She was seriously wounded. The grand parents of Bell's wife, her great aunt and a cousin were killed. Police say he later shot his wife after dragging her and her three children from the church. The children aren't hurt. Bell was later arrested without further violence.

A sixth day of digging in a Michigan pasture. Federal agents are holding out hope they will find some sign of one-time Teamster leader Jimmy Hoffa. Hoffa disappeared more than 30 years ago but authorities claim to be working a good lead, a tip that Hoffa was buried somewhere on a Michigan horse farm. An attorney for the former Hoffa associate who once owned the farm said they won't find anything.

He wore his country's uniform, paid his country's taxes. Now his country want to send him back to his home country. A bureaucratic skirmish in the immigration battle when LIVE FROM returns.

(COMMERCIAL BREAK)

HARRIS: He is a USA military veteran and a single father of three. He's a full-time student with a full-time job. He came to New York from his native Canada when he was 12 and he's not most people's idea of an illegal immigrant. Yet now he faces deportation. CNN's Allan Chernoff reports.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): David Dejong appears to be an all American dad. He's a veteran. Served overseas in the Army, then worked on a U.S. military base in Germany.

He lives in Farmingville, Long Island, a New York suburb packed with illegal immigrants who every morning wait at street corners for a day's work. But it is David, not the day workers who is facing deportation back to his native Canada.

DAVID DEJONG, IMMIGRANT: A little frustrating. They don't have to worry about being deported. I do.

CHERNOFF: When David was 12 his mother married an American and moved the family from Canada to Long Island. David graduated high school there, enlisted in the U.S. military and was stationed in Germany. It was there he met and married a German woman, had a child and planned to come home to the U.S. But when his son was born with a heart defect requiring surgery, David stayed in Germany using the country's socialized health care.

DEJONG: For working on base I honestly believed that my status was being maintained.

CHERNOFF: But David failed to fill out paperwork necessary to keep his legal residency. David and his wife got divorced. He gained custody of their three children and moved back to the U.S. to be close to his family.

DEJONG: I'm a single father with custody of my three children. And I need that family support to be able to work, raise my children and go to school full time all at the same time.

CHERNOFF: David's attorney says immigration policy should be flexible especially for a veteran.

DONALD BIRNBAUM, DEJONG'S ATTORNEY: Every case should be looked at on an individual basis. He has done more for this country than most Americans have done.

CHERNOFF: David has gained support from local officials including his congressman.

REP. TIMOTHY BISHOP (D), NEW YORK: He's being vigorously pursued by immigration with the threat of deportation and yet we have thousands and across the country millions of people who are here without proper documentation who don't get anywhere near the same level of scrutiny.

CHERNOFF: The bureau of U.S. Immigration and Customs Enforcement told CNN, "We're aware of the situation and we're looking into it."

David hopes the government will soon grant him an exception in return for his service so he can remain in the country that he considers home. Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

HARRIS: Dejong's next court hearing is in September. Look for more stories from the immigration debate every weekday on "AMERICAN MORNING" beginning at 6:00 a.m. eastern.

Coming up, a healing horse, I'll speak to the surgeon who did the surgery on Barbaro. The news keeps coming. We'll keep bringing it to you. More LIVE FROM next.

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HARRIS: Like so many other things in horse racing, it is a gamble but this one has a life or death outcome for a thoroughbred named Barbaro. We love this horse. After the Kentucky Derby winner was gravely injured at the Preakness, Dr. Dean Richardson was called in to try to save him.

He joins us from Kennett Square, Pennsylvania, with an update on his famous patient. Dr. Dean Richardson, good to see you. Thanks for the time. We appreciate it.

DR. DEAN RICHARDSON, BARBARO'S SURGEON: Sure thing.

HARRIS: Give us an update on Barbaro if you would please.

RICHARDSON: Well, Barbaro has been doing well all day long. He was real good last night. The Jacksons, the owners of the horse, as well as his trainer Mr. Matz came by to see him earlier today. They were pleased with his appearance. He's very bright. He's eating and walking around his stall comfortably, and so far everything is going well.

HARRIS: You described this injury as being about as bad as it could be. Give us some detail on that. Put that into context for us if you would please.

RICHARDSON: OK. What I was trying to explain is that the horse has three different injuries any which of which -- any one of which would be extremely difficult to manage, but we deal with those kinds of single injuries all the time. But he has all three of these injuries combined, which is really what makes him a particularly challenging case.

So he had a fracture of his cannon bone, which is the long bone above his fetlock joint or his ankle. And he has a shattered bone below it, and then he also dislocated the joint because he fractured some other bones that are in the back of that joint. So it's a very, very severe injury. It makes for a very unstable leg, and it's very difficult to repair.

HARRIS: Are you being asked to do something that is above and beyond attempting to save this horse?

RICHARDSON: No. This is the type of surgery that we do on a fairly regular basis here. It's just that in his case his injury was just a little bit more severe because he had three combined injuries. So we do this type of surgery commonly.

HARRIS: I guess I asked that...

RICHARDSON: Just not...

HARRIS: No I am sorry, go ahead.

RICHARDSON: Just not this specific combination of injuries is really what is uncommon.

HARRIS: Yes, I guess I'm asking because I have heard some others suggest that, you know, this horse is in the kind of shape where in years past the horse wouldn't have been a question. The horse would have been put down.

RICHARDSON: Well, I would agree with that, that there's been many horses put down with this injury. We do not get a chance to repair this combination of injuries commonly because they are so unstable when they are examined at the racetrack that lots of times they are put down at the racetrack.

But the technology is available. Things that we can use to repair these injuries now is such that there's a fair number of these that we can save. This injury though we'll have to see. I mean, there's no guarantee that we can save him, but it's reasonable to try.

HARRIS: Give us a sense of a prognosis here.

RICHARDSON: Well, I remain thinking that he has about a 50/50 chance of survival at this point. Still although he looks great today, if you're to see him today he would look like many of our other horses out in the barns. He is walking comfortably and looks perfectly happy. The problem is that these complications that can occur can take days to weeks to develop.

And those -- that's what results in offering a lower prognosis. Obviously, if it was just about getting him up from surgery and telling him to sit in a bed for a few months it would be a lot better than that. But that's not what we're dealing with in horses.

HARRIS: Dr. Dean Richardson, thanks for your time. I know this has been an exhausting period for you, at least four hours of surgery with this horse. But we appreciate it. Thanks for taking the time to talk to us.

RICHARDSON: Thank you very much.

HARRIS: OK. The news keeps coming. We will keep bringing it to you. More LIVE FROM straight ahead.

(COMMERCIAL BREAK)

HARRIS: Time now for the closing bell. Ali Velshi is watching the action on Wall Street for us. And Ali when we checked in with Susan last, the market had turned and was in positive territory.

ALI VELSHI, CNN ANCHOR: Right. And it has turned back the other way, believe it or not. It looked hopeful for a while. Oil prices did increase a little later in the afternoon, adding about 70 cents to a barrel. So now it is going to be 69.23. And that has put some pressure on the stock markets right now.

And you are looking at the Dow -- in fact, the Dow and Nasdaq often are about the same number down, but they are both 20 points lower right now. And it's the same thing, Tony. It is those ongoing fears of inflation, uncertainty. This is worldwide, not knowing exactly where markets are going.

So it is one of those -- you know, we're going to talk about this time three months from now. And people are going to say was that a time to get in the market or a time to sit it out? I wish I had that information. If I did, Tony, I wouldn't be -- I mean, I probably still would want to spend my afternoons with you.

HARRIS: Sure you would. Sure you would.

VELSHI: Chances are I wouldn't have to.

HARRIS: Is there much conversation about the c word, a correction?

VELSHI: Yes, well that is what we are looking for right now. I mean, we are down 5 percent on this market since it started going down.

That is the closing bell. You hear it right there, Tony.

HARRIS: Yes.

VELSHI: You have a good afternoon.

HARRIS: You too.

VELSHI: We are looking at a Dow that is about 20 points lower at 11,123, and a Nasdaq 21 points lower to 21,072.

Take it over to "THE SITUATION ROOM."

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