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ISSUES WITH JANE VELEZ-MITCHELL

Ambassador`s Daughter Dies from 22-Story Fall; Casey`s Team Works on Defense

Aired August 30, 2010 - 19:00:00   ET

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


(BEGIN VIDEOTAPE)

CARLOS DIAZ, HOST (voice-over): Tonight an all night bender fueled by alcohol and pills ends in tragedy. The 17-year-old daughter of a U.S. ambassador falls 22 stories from a Manhattan apartment. This young woman bragged about her hard-partying lifestyle on a personal blog. Now she`s dead. Tonight, we`ll go inside the final minutes of Nicole John`s life.

And bizarre new twists and turns in the Casey Anthony case. New reports say Cindy Anthony is donating Caylee`s clothes to charity. Tonight, why is Cindy giving away her granddaughter`s clothes, and why is the charity now getting death threats?

Also, desperate parents lashing out. Explosive new developments in the frantic search for Kyron Horman. His parents are now threatening the step-mom, screaming out, "You will go to jail." Tonight, everyone is pointing the finger at Terri Horman. But are we any closer to finding this adorable little boy?

Plus, excuses, excuses. Paris Hilton was busted for cocaine possession. She claims she was just holding it for a friend. Haven`t we heard this before? Tonight, could Paris be headed back to the slammer?

ISSUES starts now.

(END VIDEOTAPE)

DIAZ: I`m Carlos Diaz in for Jane Velez-Mitchell.

A beautiful teenager plunges 22 stories to her death. Did a life of booze, pill popping and fake I.D.`s lead to Nicole John`s fatal fall? The 17-year-old was the daughter of Eric John, U.S. ambassador to Thailand. She fell Friday morning from a 25th story window. Her body was found on a third-floor landing.

Police say she took off her shoes, climbed out on the window ledge, and accidentally slipped. They think she went out there to take a picture. Her camera was found next to her body.

Earlier that night, Nicole partied at the exclusive Tenjune nightclub. She reportedly used a fake I.D. to get into the club. She left the club to go to an after-hour party at a midtown apartment. At around 2:45 a.m., she posted this on her Facebook page: "Losing track of the rounds. All a blur now." About 90 minutes later, she was dead.

Nicole`s blog is full of incredibly ominous postings, as you`ll hear in a moment. The blog reads like a desperate cry for help. But was anybody listening?

Give me a call right now: 1-877-JVM-SAYS. That`s 1-877-586-7297.

Out to my expert panel. I want to start with Micah Jesse, celebrity blogger. Micah, as a New York night-life insider, do the circumstances around Nicole`s death surprise you?

MICAH JESSE, CELEBRITY BLOGGER: To be honest, Carlos, I`m actually not surprised. Unfortunately, things like this do happen. As much as security personnel try to up, you know, security on fake I.D.`s, things like this do fall through the cracks.

DIAZ: But I mean, is it -- was it her at the nightclub, do you think, or was it the after party that did her in? Because there was -- there was booze at both, and she`s 17 years old.

JESSE: I know. It`s a tragic story. I think what probably happened was, you know, the after party. We don`t know all the details quite yet. But, you know, I think this is a really tragic story about a 17-year-old who, you know, made a mistake.

DIAZ: But, Micah, you`re right there in New York. You party a lot. I mean, are there 17-year-olds running around drinking like crazy in the town?

MIKE BROOKS, HLN LAW-ENFORCEMENT ANALYST: Absolutely.

JESSE: Unfortunately, there are. Unfortunately, there are. You know, as much as we want to think that these clubs are only filled with people of age, people under age are definitely slipping through the tracks.

DIAZ: Mike Brooks, HLN law-enforcement analyst, I mean, this -- you see this so much. How do we combat this?

BROOKS: You do.

DIAZ: How do we say enough with the underage drinking? I mean, at an after-party and in a club.

BROOKS: Well, you know, as we talked about before, Carlos, it`s all about the liquor license. You know, if they don`t want to lose their liquor license, they`ve got to start complying with what the laws of New York are.

It`s the velvet rope. It`s open up and let the pretty girls in, no matter what age. She could have shown a library card, and she still would have gotten in. And what was she doing in the VIP section? I she -- normal people just don`t walk into the VIP section of a club like this.

DIAZ: Yes, you`re right. I mean, you have to go a few times to be known in the club to got to get in the VIP.

BROOKS: Sure.

DIAZ: Nicole John named her blog Melancholy Souls, and her blog gives us some very sad insight into her life. Keep in mind she was just 17.

Listen to this: "Whaaaaaat a F-ing epic weekend. Intoxication -- intoxication for about 40 straight hours. For future reference, Xanax and vodka do not mix." Thanks, I appreciate that. She`s 17. I`m 40. I didn`t know that.

There are some very dark posts like these: "If I had the choice right now, I wouldn`t take the next breath. The people I care about most find it so easy to leave. I`m hurt so deep that I no longer see the purpose. So I was down in the slumps, in the pits. But now -- now I popped two Xanaxes, and I`m good to go."

And get this. How`s this for eerie foreshadowing? Nicole quoted one of Kurt Vonnegut -- quote here: "I want to stay as close to the edge as I can without going over. Out on the edge you see all kinds of things you don`t see and you can`t see from the center."

Howard Samuels, what`s your reaction to all these posts?

HOWARD SAMUELS, FOUNDER/CEO, THE HILLS TREATMENT CENTER: Well, first of all, this is really tragic. I mean, somebody like Nicole obviously has got a lot of, a lot of issues coming into this. And her -- the alcoholism and the drinking just goes hand in hand with somebody that has such self- destructive feelings and behaviors.

But I`ve got to say -- I mean, I have to go to the parents. I have to go to the families.

DIAZ: Yes.

SAMUELS: I mean, this is a crisis in this country, with 16-, 17-, 18- year-olds, 15-year-olds, and it`s the families that have to get more involved and know what their kids are doing. So that`s where I have to go with the blame, not just in this case but with all these teenagers.

DIAZ: I completely agree. I mean, if you read these blogs, it`s a cry for help. You can`t say you didn`t know, because everyone else knew that was around her. She`s putting things -- these things out there on the Internet.

I mean, if you don`t follow your kids on Facebook, on Twitter, things like this are bound to happen. If the signs are there -- let`s go to a caller right now, Ed from Michigan.

Ed, what are your thoughts about this tragedy?

CALLER: Yes, this is something else. I mean, this happens everywhere. A lot of this stuff doesn`t even make the news. But you can`t -- these kids are a different brew nowadays. I don`t know where they come from. You can keep track of them. You tell them something to do. They don`t want to listen to the parents. I just don`t know what to make.

They`re just confusing. They live from day to day. They do what they want. They drink as much as they want. And then a fatality like this happens. And I don`t know if you can blame the parents or even if they had a tether on her. But it`s just -- it`s just ridiculous.

DIAZ: But it`s living -- you know what? It`s a virtual tether. You need to know what your kids are doing on Facebook, on a blog, on Twitter. Obviously, Nicole`s family is living a nightmare right now. I mean, I`m not going to, like, pile on.

BROOKS: No, no.

DIAZ: But after reading Nicole`s blog posts, I have to ask, where were her parents? New technology means new rules of parenting. If your child is on Facebook, demand that they friend you immediately. If your child is on Twitter, read every tweet. Demand access to their blogs. You`ve got to know what`s going on in their lives.

Michael Eiglarsh, you`re a dad. What`s your take on this?

MARK EIGLARSH, CRIMINAL DEFENSE ATTORNEY: The reason why I rush home from work every day is because my three little children need me.

I`m not going to condemn these parents. It`s possible that some people do raise their children right and the kids just, for whatever reason, go the other direction. But something tells me that wasn`t the case here. If, at a minimum, we use this tragedy to discuss, "Hey, parents, you probably don`t know what your kids are up to, so find out," then I think that we`ve done something positive.

DIAZ: It`s not -- and Mark, it`s not about snooping. You know, I don`t want to -- I don`t...

EIGLARSH: Right.

DIAZ: I`m not saying that you need to become a private eye with your kids. And here`s the thing. If your kids are on Facebook and you`re, like, you know, listen, if you`re going to be on Facebook, you`ve got to friend me. Like, I don`t want my mom or my dad on Facebook. My friends are going to see it. Come and friend -- no way. OK. Fine. Then both of you come up with a cool fake identity for your parents to have. But you`ve got to know what your kids are doing on Facebook.

EIGLARSH: Absolutely.

DIAZ: This person, Nicole, was screaming for help online before this tragedy.

Nicole blogged about the fake I.D. She blogged about her fake I.D. that she reportedly used to get into Tenjune. The night she died, she wrote, "As long as the I.D. Is pretty legit looking, it should be OK. It`s also easier if you`re a girl, LOL."

BROOKS: There you go.

DIAZ: "I have a Brazilian I.D. that was made here in NYC." She`s admitting all this online. She also says, "It`s really good. It`s never been rejected." Nicole was 17. The I.D. said she was 23. Police are now trying to determine if Nicole was able to buy drinks at Tenjune, the nightclub, that night. We reached out to the owner for a statement, and he has not gotten back to us.

Mike Brooks, will this club lose its liquor license or worse?

BROOKS: Well, NYPD is going to investigate this and take a look at the surveillance of her going in, what her actions were in the bar, was somebody else buying her drinks, was this guy -- was this guy who got locked up for giving her -- for giving her alcohol at the apartment, Nassimi, what was his whole role in this?

But there again, it goes back to her, and it goes back to possibly her parents. Will they -- will they charge anybody from the club? Highly unlikely.

EIGLARSH: The coroner`s -- the coroner`s report is going to prove to be invaluable. We want to see what was in her system at the time and where she got those items.

DIAZ: Mike, you bring up a good point, by the way, about there has been an arrest made in this case. And we want to talk about that, coming up after the break.

I also want to hear from Tracy Schneider, defense attorney, coming up.

Everyone, stay right where you are. Could this deadly accident have been prevented? We`re taking your calls right now on this one: 1-877-JVM- SAYS. That`s 1-877-586-7297.

Plus, could the Casey Anthony trial be delayed yet again? When is this trial going to get started? And how long could it last?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: And I can tell you just for a certainty that everything you`ve told me so far is a lie.

CASEY ANTHONY, CHARGED WITH MURDERING DAUGHTER: Not everything that I told you.

UNIDENTIFIED MALE: OK. Pretty much everything that you told me.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HELEN SCHORSCH, NEIGHBOR: As we came to class at 9 a.m., the police were outside. There was, as I say, a lot of commotion.

(END VIDEO CLIP)

DIAZ: I`m Carlos Diaz, in for Jane Velez-Mitchell.

Today would have been Nicole John`s first day at the prestigious Parsons School for Design. On the surface, the 17-year-old had an incredibly bright future. Tragically, she plunged to her death from a 26th story window Friday. It followed hours of drinking at a club and later at an after party. The medical examiner ruled Nicole`s death an accident.

I want to hear from you. Give me a call right now.

Let`s go out to Jim in Oregon.

Jim, are you -- are you on the side of the parents need to be more responsible, or is this an example of a 17-year-old gone wild?

CALLER: I think it`s more the parents need to be responsible. In this day and age, it seems like as soon as a kid hits 10-year-old they`re acting like adults and seems like the parents just let them do it. They need to have curfews brought back in, have more control over their kids, spend more time with them. Let them have a childhood instead of letting them go from 10 years olds to adulthood.

DIAZ: Yes. I mean, Jim, I completely agree. I mean, it sounds like -- I don`t party this hard. I mean, this girl is out. She`s 17-year-old old. She`s hitting it hard every night.

Stacy Schneider, you`re a defense attorney. You`ve been around. You`ve seen things like this. When you heard the story of this 17-year-old partying so hard and then falling to her death over the weekend, what were your thoughts?

STACY SCHNEIDER, DEFENSE ATTORNEY: I was concerned where she was getting access to this type of alcohol. Was she going into a store and purchasing it? Obviously, we know she went to this club. There`s going to be a tremendous investigation about the club. They could even be hit with manslaughter charges. That`s how bad these things can get.

DIAZ: That serious?

SCHNEIDER: Over the death of a minor.

DIAZ: That...

SCHNEIDER: It`s that serious.

DIAZ: So you think the club could actually be hit with manslaughter charges? I mean, how do you do that?

SCHNEIDER: It`s possible.

DIAZ: Go ahead.

SCHNEIDER: Because they`re going to go through every piece of surveillance tape. They`re going to interview as many people as they can. They`re going to hit the staff, the bartenders, the bouncers. And they`re going to find out how much, if any, alcohol was served to this underage drinker at that club, and it could get that bad.

But the saving grace for the club, Tenjune, is that she went to this after party. And it`s going to be a little more difficult with to draw the line of how much...

EIGLARSH: They`re not charging a club.

SCHNEIDER: ... she got at the party and how much she got in the club.

EIGLARSH: Theoretically -- it`s theoretically possible, but it`s not happening. There was too many --- too many factors after the fact. The causation is not there, but I`m with you. And they`re going to have some serious civil issues, either license and everything like that. But after parties, a tragic accident that occurred. Drugs probably were involved. I don`t know that you can hold the club responsible.

SCHNEIDER: I don`t agree with you. I don`t agree.

EIGLARSH: OK. But you know, and you guys are all making good points.

Mike Brooks, I mean, we keep talking about the technology, and the club has come forth and said, "Hey, we have video of her being carded, you know, when she went into the club, so we did our part." But, Mike, we all know there`s technology everywhere. There are video cameras everywhere. There could have been video cameras in the club. Do you check those video cameras, as well, to see who`s serving the 17-year-old?

BROOKS: Absolutely. And that`s all going to be part of the investigation. And as Stacey said, all of the interviews are going to be done with bartenders and everyone else, the whole staff.

But then, I guarantee you, clubs like this -- new clubs like this in New York City, they`ve got a lot of cameras. They`re there -- to look at the employees, to see what they`re doing, to make sure, you know, what kind of drinks they`re pouring, whether they`re taking money out of the cash register. And they`re going to go back and take a look at everything, from receipts to every piece of video surveillance at the bar, in the VIP area, all over that restaurant.

DIAZ: Stacy, jump in.

BROOKS: If she was buying it or someone else was buying.

SCHNEIDER: Here`s the situation -- here`s the difference in the situation in New York City.

DIAZ: Yes.

SCHNEIDER: This is a diplomat`s daughter, and "I`m sorry, yes, there is going to be different treatment here. The D.A.`s office is going to look at this with a fine-toothed comb." And we also have a new district attorney in New York City, and this case is getting international attention. And they`re going to...

EIGLARSH: I don`t disagree with you. It is -- it is...

SCHNEIDER: It`s possible they might get hit with a misdemeanor.

EIGLARSH: No question it`s going to be high profile. I still think, no matter who you apply the law to, the law will not hold criminally responsible the club under these set of circumstances.

EIGLARSH: But you talk about -- you talk about there being special circumstances here. I think that the fact that her dad is a diplomat is going to help in this case, because I want this thing to be looked over with a fine-toothed comb. I want there to be as much of an examination into this case.

Let`s go to Lacey in Michigan. Lacy, your thoughts?

CALLER: Hey, my thoughts are the club is covered as far as I`m concerned. She carried a fake I.D. in there, so that right there says that she`s been doing this for a long time. My -- it still goes back to the parents for me. I have a -- my sister is not technically apt to run Facebook. I check her kids` Facebook. I make sure they don`t put inappropriate pictures on there or any comments with -- with, you know, any type of language that they shouldn`t be using. They know right away that I`ll let their mom know.

It`s all the parents, as far as I`m concerned. She`s 17 years old. An after-hours party?

DIAZ: Yes.

CALLER: What time is that in the morning?

DIAZ: It was 2:42 in the morning. She`s, you know, posting things on her Facebook page. She fell to her death just after 4 a.m. in the morning. So, yes, she was out late.

Police arrested 25-year-old Ilan Nassimi, the host of the apartment party where Nicole died. I want to go back to Howard Samuels. He -- this guy is charged with illegally serving alcohol to the minor in this case, being Nicole.

Howard Samuels, you know, you know about addiction. Does it sound like this person, Nicole, was addicted -- was she an alcoholic at the age of 17?

SAMUELS: Well, I mean, you know, show me a teenager, and I`m going to show you somebody who`s going crazy. I mean, come on. There are so many teenagers out there that are drinking. Now, is she an alcoholic? She`s dead because of alcohol. I mean, does that not say it all?

DIAZ: All right, Howard. Great -- great job for my entire panel. We`ve got more on this coming up.

Also, harsh words for Terri Horman is coming up next.

(COMMERCIAL BREAK)

DIAZ: I`m Carlos Diaz in for Jane Velez-Mitchell.

Tonight, Casey Anthony`s dream team in court. Judge Belvin Perry schools the defense, saying, "You will work 24/7 if you have to. This murder trial will start on time."

Casey`s attorney complained there`s so much to do and so little time. The judge wasn`t having it. He said, "You know what? You`re going to go - - you`re going to be ready to go on May 16."

Plus, the defense gets a stunning new piece of information. Casey`s co-worker says she talked to the accused child killer on July 15, the very day Casey finally admitted her daughter was missing.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Can you tell me a little bit what`s going on?

CASEY ANTHONY: My daughter has been missing for the last 31 days.

UNIDENTIFIED FEMALE: And do you know who has her?

CASEY ANTHONY: I know who has her. I tried to contact her. I actually received a phone call today now from a number that is no longer in service. I did get to speak to my daughter for about a moment, about a minute.

(END VIDEO CLIP)

DIAZ: Casey`s co-worker says she spoke to Casey that same day, and she says she heard little Caylee`s voice in the background. Will this woman be a star witness?

Straight out to Jean Casarez, correspondent for "In Session" on TruTV.

Jean, what is the very latest?

JEAN CASAREZ, CORRESPONDENT, TRUTV`S "IN SESSION": Well, the very latest is the hearing today. You`re right: the defense said that they thought 50/50 they would meet all the time deadlines, because there are so many in this case.

The defense also said, "Your honor, 60 more witnesses have been added to the prosecution`s witness list."

The judge said, "Look, this trial is going to happen the date it has been set, which is May 9, 2011, for jury selection. I don`t care how you do it, but you`ve got to make these deadlines on depositions and expert witnesses and forensics experts. It`s got to be met."

DIAZ: Yes, I mean -- and let`s bring Mike Brooks into this. I mean, you`re talking about May. I mean, what can they do -- what are they going to do for the next several months that they`re complaining they can`t do by next May?

BROOKS: Well, there`s all these drop-dead dates, all these deadline dates, Carlos, that they have for depositions, for evidence, for a lot of different things that Judge Perry has said, "Hey, these are going to happen.""

But basically, the bottom line with him was, "Look, when May comes around, when May 9 happens, you`re going to select a jury. May 16, you`re going to have opening statements, and it`s going to happen." And he said, "Look, I`ll impose a 24-hour rule if you will."

DIAZ: Yes.

BROOKS: And he said, "If you`re having problems scheduling depositions, I will do it for you, and you don`t want me doing that."

DIAZ: Yes. And, Mike, get this. There is more drama. The Anthony family at the heart of another scandal. New outrage over Cindy Anthony`s alleged plan to give away her dead granddaughter`s clothes and shoes. Cindy reportedly wants to donate Caylee`s belongings to charity, to the charity Children of Love. And now that charity is getting death threats.

Jean, quickly, you`ve got 30 seconds. What can you tell us about that?

CASAREZ: Well, it did not come into court today, but it`s a local charity. Cindy Anthony wanted to donate these things, but it became public, and now it`s a negative aspect on the charity that`s trying to do good for others.

DIAZ: But what`s the charity supposed to do? Say, "No, we don`t want to provide clothing"? I mean, if you`re going to donate clothing. But it`s still, do you want your kids wearing that clothing?

BROOKS: Carlos, you know what`s odd about that? July 15 on the stand, she said that she believes that Caylee is still alive. So why is she giving her clothes away? It doesn`t make sense.

DIAZ: Fantastic guests, thank you so much.

A new week, a new allegation. Kyron`s parents once again speaking out, pointing the finger at the step-mom. They`re begging her to come clean. You`ve got to see this new video. All these threats, is it doing any good?

(COMMERCIAL BREAK)

DIAZ: Desperate parents lashing out: explosive new developments in the frantic search for Kyron Horman. His parents are now threatening the stepmom, screaming out, you will go to jail. Tonight, everyone is pointing the finger at Terri Horman. But are we any closer to finding this adorable little boy?

Plus, excuses, excuses: Paris Hilton was busted for cocaine possession. She claims she was just holding it for a friend. Haven`t we heard this before? Tonight, could Paris be headed back to the slammer?

I`m Carlos Diaz in for Jane Velez-Mitchell.

Tonight Kyron Horman`s mom is fed up. In a direct message to Terri Horman, Kyron`s stepmom, Desiree Young says, "Terri, you tell the truth or you`re going to jail."

Little Kyron has been missing for nearly three months now. In fact, he`ll turn 8 in just a few days. Kyron`s parents met with reporters on Friday. And you could feel the anger coming from Kyron`s mom. Listen to this.

(BEGIN VIDEO CLIP)

DESIREE YOUNG, KYRON HORMAN`S MOTHER: This is not going to get any easier for you. The police will not stop until they find Kyron. You will go to jail. And whoever has been helping you will either have to talk or they will go to jail.

(END VIDEO CLIP)

DIAZ: Wow. Now, to recap, Terri Horman was in charge of Kyron the day he vanished at school. She`s been hiding for weeks now but made a rare public appearance last week to attend a divorce court hearing she didn`t have to go to.

Terri Horman won`t talk. She won`t cooperate with police. So how is this going to end?

Three months into Kyron`s disappearance how are we going to be able to find out what really happened to Kyron? Give me a call right now, 1-877- JVM-SAYS; that`s 1-877-586-7297.

Straight out to my awesome panel, but first let`s begin with investigative reporter Michelle Sigona. Michelle, give me the very latest on this.

MICHELLE SIGONA, INVESTIGATIVE REPORTER: Carlos, we may know how this ends once the grand jury finishes up their portion of this investigation and figures out what kind of answers that the public will in fact receive from that. They are reportedly still meeting, still interviewing people, still accepting information in this case.

I also smoke with Multnomah County sheriff`s office just a little while ago and they do confirm that they`re just shy of 4,000 leads and are still continuing to move forward with all of those tips and prioritizing them and going out and physically searching locations. But at this particular moment there`s nothing new on that front.

Now, just yesterday, the beautiful wall of hope to remember Kyron was taken down from Skyline Elementary School but it was moved nearby to a fire station. About 75 people were out there taking it in big chunks and moving it along. This is to prepare for the first day of classes that will happen on September the 7th; and as you mentioned Kyron`s birthday just a few days after that.

So this is a difficult time for Kaine and also for Terri. But they are looking forward to a big fund-raiser that`s coming up on September 1st. Godfather Pizza in the area will be donating a portion to his search efforts.

DIAZ: Michelle, great job -- valuable information there, a lot of valuable information.

Kyron`s mother almost seemed to empathize with Terri Horman at one point almost. Check this out.

(BEGIN VIDEO CLIP)

YOUNG: I don`t doubt that this situation makes you feel like you don`t have a choice. But you do. And you always have. What you are going to be remembered for is what you do with these choices and how you handle it.

(END VIDEO CLIP)

DIAZ: All right. So let`s take a look at Terri Horman`s choices. If she admits to anything criminal, she`s going straight to jail. I mean, short of complete innocence or immunity, there`s nothing Terri Horman can say to escape this mess, which brings me to this big issue, all right.

This is my big issue. Let`s think about total immunity. Would it even be considered -- to offer immunity in exchange for information on Kyron?

MIKE BROOKS, HLN LAW ENFORCEMENT ANALYST: No way. No, no.

DIAZ: Easy, people. Easy, easy.

Mark Eiglarsh, thank you very much, I bet if you ask Kyron`s mother if you want justice or want your son back, she`s going to take the son in this situation.

MARK EIGLARSH, CRIMINAL DEFENSE ATTORNEY: Yes, it`s not up to her. It`s not going to happen. It just doesn`t happen. It`s what we all want.

The value of all this is not going to take a woman who might have had something to do with the missing child and get her to go, ok, I`m going to come clean. The value is that it`s now on the media again. There`s life to the story. People at home now are saying, "My god, they still haven`t found that kid?"

And number two, look at that woman. Maybe I`ve seen her somewhere. Maybe I can help in this investigation.

DIAZ: But this is June 4th, Mark. We`re talking about months this kid has been missing. This beautiful 7-year-old who turns 8 in a few days has been missing for months. You need a break in this situation. Why not try something radical? Mike, am I insane here?

BROOKS: No. And I think what they`re trying is just what they did on Friday. They`re putting that out because law enforcement is briefing the parents, Kaine and Desiree all the time. So they know a lot more about this than we do. I think this is just more of the pressure campaign on Terri Horman to try to get her to break, if you will.

But she knows something. She absolutely knows something. And it was interesting she said with Terri and whoever is involved with her. That makes them think that there`s somebody else involved in this too.

DIAZ: Or she wants to divide and conquer. Terri, if you`re not going to come forward, the people who are helping you, why don`t you come forward and bust Terri.

BROOKS: Right.

DIAZ: The grand jury investigating the disappearance of Kyron could be meeting for months. Kyron`s parents have appeared before the grand jury and so has Terri Horman`s best friend Dede Spicher. Spicher didn`t actually testify but could appear again in the coming weeks. Several other people who know Terri Horman have also testified.

I want to go to Bruce McCain. Do we have Bruce? Bruce, I want to know what is the very latest on everyone kind of surrounding this case.

BRUCE MCCAIN, MULTNOMAH COUNTY SHERIFF`S OFFICE: Well, Carlos I just heard -- the thing about immunity, we talked about that before on the show. And absolutely, Terri Horman is not going to be offered any kind of immunity. However, we talked about the fact that Dede Spicher may be the key to this case. She may be the one who`s offered an immunity deal to testify before the grand jury.

But one of the things that really struck me about Friday`s press conference was this business about Terri Horman motivated by anger or revenge, and yet Kaine and Desiree never really kind got into that aspect of it very much. That would be a very key element because frankly even though they`re pointing the finger at Terri Horman, when really pressed for evidence and proof, they don`t have any. They don`t have any proof to substantiate the belief that he`s alive or even the motive.

But I think once we get past this motive for Terri Horman there`s something going on between Kaine and Terri, a deep thing in the relationship that led even before Kyron`s disappearance to the murder-for- hire plot. But right now the investigators are still stuck on June 4th. The case is not going to break unless they get somebody to fess up or worse yet somebody stumbling across some piece of physical evidence in the woods somewhere.

DIAZ: Yes. I mean that`s the worst case scenario right there. As we mentioned earlier Kyron turns 8 on September 9th. His parents are treating the day just as they would if Kyron was ok and at home again.

(BEGIN VIDEO CLIP)

KAINE HORMAN, KYRON HORMAN`S FATHER: School supplies are in a new backpack waiting for him when he comes in. So we`re ready for that. The birthday stuff, we`ve both got parties arranged.

(END VIDEO CLIP)

DIAZ: Not only that, Kyron is on the school roster and there`s a spot waiting for him in his third grade classroom.

Michelle Sigona, it`s got to be hard on Kyron`s school friends. I would imagine things have changed dramatically at his school over the summer.

SIGONA: And these children, I mean they left the school year knowing that their friend was missing and they`re coming back knowing that he hasn`t returned. So of course this is going to be very difficult for those children.

I would imagine that they may have some sort of counseling services set up like they did at the end of the school year to help not just with the children but with the parents and how to talk to their children about this kind of situation and also so that the children aren`t afraid to be at their school.

So I think that that`s another -- that was another key thing with moving the wall of hope was that they didn`t want strangers coming and wandering around and kind of hanging out front. They want the kids to feel safe in their own environment.

DIAZ: Michelle Sigona, Bruce McCain, Mike Brooks and Mark Eiglarsh. Guys thank you so much for doing a great job and all you guys (INAUDIBLE).

Paris Hilton allegedly busted for coke. She claims I`m just holding it for a friend. Is anybody buying this excuse? The one word answer -- no. We want to hear from you on this one, 1-877-586-7297.

(BEGIN VIDEO CLIP)

PARIS HILTON, ACTRESS: I keep people around me that I love and I trust and I just don`t pay attention to any of the nonsense that`s around in this town.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

DIAZ: I`m Carlos Diaz in for Jane Velez-Mitchell. Paris Hilton busted yet again. The heiress was arrested this weekend in Las Vegas and will be charged with possession of a controlled substance.

(BEGIN VIDEO CLIP)

SHERIFF DOUGLAS C. GILLESPIE, CLARK COUNTY: While in the security office she extracted a tube of lip balm from her purse. At that time, a plastic bindle containing a substance believed to be cocaine fell from her purse in plain view of the metro lieutenant. The subsequent -- this substance subsequently tested positive as cocaine.

(END VIDEO CLIP)

DIAZ: Paris and her boyfriend Cy Waits were pulled over after a cop says he drove alongside their Cadillac Escalade and smelled the strong odor of marijuana coming from their car. When the officer looked over he noticed the passenger rolling up her window. He told the driver to pull over and that`s when he immediately discovered the passenger was none other than Paris Hilton.

Joining me now to talk about this, assignment editor at TMZ, Mike Walters; Mike, you guys have been updating this all day long. Talk to me, buddy. What went down that night in Vegas?

MIKE WALTERS, ASSIGNMENT EDITOR, TMZ: Well, Carlos, here`s the deal. We`ve worked in Vegas together in the past and it`s the excuse a lot of people try to use, "It`s not my cocaine, it`s not my drugs."

DIAZ: Right.

WALTERS: What happened was Paris Hilton is claiming that this was not her purse. And the theme that she`s going with is that she let someone borrow the purse, got it back, changed the outfit real quick to match, you know, her dress or whatever and this person had left the cocaine in the purse, she didn`t know it was there.

Now, in her defense, Carlos, I`ve got to say, she probably has like 500 purses so I guess it`s a plausible thing that could have happened. The problem is that the judge in Nevada is probably not going to agree or go with that theory that it wasn`t her cocaine and not her purse.

DIAZ: Yes and Mike and you and I both know I mean, even though Vegas is Sin City they want to crack down on this stuff. I mean, they`re -- they don`t take this lightly.

WALTERS: Yes.

DIAZ: I mean, they don`t want -- they don`t want people to think that you can just go to Vegas and you can just do blow, whatever you want. They`re going to come down hard on Paris --

WALTERS: Right.

DIAZ: -- in this situation.

WALTERS: Absolutely.

DIAZ: Now, police say Paris was treated like everyone else and they had enough evidence to arrest the 29-year-old but RadarOnline.com is reporting that Paris could beat the charges based on a technicality.

Listen to this.

Their source is saying the heiress wasn`t searched properly since she was taken into security offices at the Wynne Resort instead of being searched at the scene.

Defense attorney Stacy Schneider, could this be Paris`s way out?

STACY SCHNEIDER, DEFENSE ATTORNEY: I think Paris Hilton is getting a get out of jail free card when all the facts come out in this case. I read the police report tonight. And there is the most ludicrous allegation by the officer who arrested her that when she asked for the lip balm and he opened the purse, which was sitting on a table in the Wynne Hotel while she -- she was getting ready to go into the bathroom --

DIAZ: Right.

SCHNEIDER: -- away from the arrest scene where the car was, that the alleged bag of cocaine fell into the officer`s hand. It`s written in the report by the officer.

DIAZ: Right.

SCHNEIDER: -- and I`m sorry, I`ve never seen evidence appear so easily to an officer who is arresting a celebrity --

DIAZ: So what are you saying --

SCHNEIDER: So I`m not sure --

DIAZ: You`re saying he went digging through her purse or what are you saying?

SCHNEIDER: I -- I think, no -- she opened the purse in front of him and he`s claiming she possessed these drugs because they fell out of the purse but he actually writes down --

DIAZ: But what -- what are you getting -- are you -- but are you saying that the cop planted the drugs?

SCHNEIDER: No. I`m getting at -- no I`m getting at that I think when this hits the court, those drugs are going to be suppressed. I don`t believe what the officer is saying. Unless he got his training at a police academy in the magic kingdom at Disney World, I don`t see how drugs can mysteriously fall into an officer`s hand.

That`s like saying a gun fell out of his pocket and into the cop`s hand at the scene of the crime. I don`t buy it.

I think Paris Hilton is going to be ok in this if she stopped using the lame excuse, she might get away with it.

DIAZ: All right, Stacy. In recent weeks Paris`s boyfriend Cy Waits was on top of the world. He reportedly stopped an armed intruder from a -- from an attempted break-in in Paris`s home. That was big news last week. Listen to this exclusive KSNV this interview with Paris just hours before her arrest this past Friday.

(BEGIN VIDEO CLIP)

PARIS HILTON, CELEBRITY: Cy looked down and said, "My God, look at his hands he has two big knives and he had a kitchen knife it was this long and a big buck hunting knife. And thank God, Cy was there with a gun to get the knives away and just hold him there until the police came.

(END VIDEO CLIP)

DIAZ: He was also promoted to a nightclub operations chief for the Wynn Resort just last week. Now he goes from hero who ran one of the hottest clubs in Vegas to an arrest and reportedly fired.

Mike, before we get to Ken in Tennessee I want to go to Mike real quick with TMZ. Mike, do you think he would have been fired if it was just a DUI? Or does the cocaine in the case really let Steve Wynn say, "Ok, you`re out of here, Cy"?

WALTERS: No, you know what, look, I know what you`re looking at Carlos. And I have to say, I think Cy is the big loser here. Cy Waits is a great guy. He`s a huge force in Las Vegas. He`s a really nice person. I think he`s the one that got caught up in the fray of Paris Hilton`s lifestyle, in her aura and the way she acts in Vegas.

And I just really feel bad for Cy because I think he might lose some big things in his life especially in his career. And I don`t think that Cy is a bad guy and I don`t think that you know if it wasn`t --

DIAZ: No --

WALTERS: -- the same situation with Paris he wouldn`t be in this kind of situation.

DIAZ: And Mike and that`s -- and I agree with you, Mike. What I`m saying, I mean if he gets busted for a DUI ok, these things happen. So what I`m saying is if he`s just busted for a DUI, is doesn`t make the national news -- I think Steve Wynn keeps him around.

But the fact that it`s national news and they`re showing shots of the Wynn as B roll every two seconds on the national news. The fact that Paris --

WALTERS: Right.

DIAZ: -- was with him and allegedly had coke on her, that`s -- that`s got to be a big strike for -- for Cy in this situation.

WALTERS: I think you`re right. But like I said, I think it will be a huge loss for the Wynn properties --

DIAZ: Right.

WALTERS: -- and I think that -- I`m just saying they shouldn`t do that. Cy Waits is a mogul in that property and in the nightclub business. If that happens, Carlos, like you`re saying, yes, it could happen. I just hope it doesn`t and it will be a huge loss on their part.

DIAZ: I actually agree -- Mike, I agree with you. I think you know, I mean, you and I both have met Cy. He`s a good dude he just -- he just -- he hooked up with the wrong girl if you ask me.

WALTERS: It happens.

DIAZ: Ken from Tennessee, what are your thoughts?

KEN FROM TENNESSEE: Hey, man, how is it going? I think it`s another day of Paris Hilton, another celebrity getting -- they can get away with murder, man you know. It`s like you could do whatever they want and get away with everything because they`re Hollywood stars. Well, she`s in Vegas. Look what happened to O.J. He`s in prison. She should go to prison too, man.

DIAZ: All right, I`ve got to bring Danny Bonaduce.

Danny, thanks for being so patient with us. Sorry I`m taking so long to get to you.

DANNY BONADUCE, ACTOR & RADIO TALK SHOW HOST, 94.1 WYSP: It`s my pleasure.

DIAZ: Hey dude I mean, you have been through this, you`ve seen it time and time again. Paris has had her problems throughout the years. Is -- is this a situation?

I mean, let`s look back. On September 7th in 2006 she was arrested in L.A. for suspicion of drunk driving. In the following month she was pulled over --

BONADUCE: I was there.

DIAZ: You were there for that. I mean, look at the -- look at just - -

BONADUCE: My -- my friend works the door.

DIAZ: Ok.

BONADUCE: My friend works the door. I helped escort her to her car. Then she then made a u-turn and was immediately arrested right in front of me.

DIAZ: So dude, I mean, is she -- if this a situation where it`s the last straw for Paris or are we going to be -- in a few months adding to this -- this resume here?

BONADUCE: Normally I would say yes, that Paris is through. She`s going right to jail but she`s got to stop using "The Brady Bunch" defense. Remember the episode where Peter had cigarettes in his pocket --

DIAZ: Yes.

BONADUCE: -- and that isn`t my jacket.

DIAZ: Yes.

BONADUCE: Stop using the Brady Bunch defense. But Stacy is absolutely correct. They didn`t search her on the spot. There`s a thing called the chain of command and the chain of custody. And once they did not search her on the spot of which she was being arrested and escorted her into a public casino they lost the chain of custody. Those drugs will in fact be suppressed and any decent lawyer should be able to keep Paris out of jail on this one which is a drag because I like Paris going to jail. It will make for a much more fun radio show.

DIAZ: Ok. Everyone hold on. We`re going to have much more on this coming up after the break. So what we`re hearing is Paris Hilton might not be ending in the slammer -- is she going to get off after all this goes down over a technicality.

I have to hear from you. Give me a call right now. ISSUES continues in a second.

(COMMERCIAL BREAK)

DIAZ: I`m Carlos Diaz in for Jane Velez-Mitchell.

In 2007, Paris said that leaving jail was a new beginning for her. Now she`s charged with alleged cocaine possession and she`s facing four years in the slammer. Nobody is buying her "it wasn`t mine" excuse.

Howard Samuels, you`ve heard this excuse a thousand times over your years dealing with drug addicts and alcohol abusers. What are your thoughts on Paris and what does she need to do next?

HOWARD SAMUELS, FOUNDER AND CEO, THE HILLS TREATMENT CENTER: Well, I got to tell you. I mean, it`s -- are we surprised? Of course not. I mean, this is all arrogance and entitlement in its finest. I mean that is the characteristics of alcoholism. And if you`ve seen this woman`s behavior over the last number of years, we all know she has an issue and this is another example.

And once again, I`ve got to go back. Look at the family. For a woman like this to have the kind of lifestyle she has built on what she`s accomplished is a joke. So to me, families, if you have a daughter or a son that`s like this, please call an interventionist. Intercede quickly. Hopefully you can save your person`s life and not end up like a Paris Hilton or unfortunately like a Nicole.

DIAZ: Danny Bonaduce, you know all about star entitlement. You`ve been around stars; your entire life -- your entire life has been spent in Hollywood. Do these stars -- I mean dude, we keep talking about like oh, it`s entitlement but really in all honesty, stars feel that they`re untouchable, correct?

BONADUCE: I don`t believe so anymore. Aside from the fact that I think the handling of the evidence was poorly done in Vegas, would you want to be the judge that doesn`t put Paris Hilton in jail this time?

People have had it up to here with celebrities. Every phone call you are going to get is going to say the same thing, put these celebrities in jail. It`s about time you put them behind bars. I wouldn`t want to be the judge that did not put Paris Hilton in jail. If this judge gets a chance to put her behind bars he`s going to.

And by the way, nobody seems to be making anything about the albuterol tablet in her purse. Albuterol is used, they said, for wheezing and asthma; it is except it`s used for asthma in racehorses. It`s one of the most fast acting steroids and fat burners (INAUDIBLE) and super sought after in Hollywood.

DIAZ: Well, she copped to that, she said yes that`s mine, the cash is mine, everything in the purse is mine except for -- basically everything in the purse is mine except for the cocaine.

Stacy, what report card would you give Paris on how she has handled this so far with the cops and then tweeting afterwards, "Hey, all the fans who love me, thank you so much"?

STACY SCHNEIDER, DEFENSE ATTORNEY: Ok. She gets a big fat F. Her excuse is the illegal equivalent of the dog ate my home work. It`s the worst. We hear it all the time. The only chance of success she has is ok, Paris, bring in the girl you say took your purse, put the cocaine in it and have her go admit to the D.A. that it`s hers. I would like to see someone come in and take the fall for Paris. It`s not going to happen.

DIAZ: And that`s the point Stacy -- great point, Stacy. I`m glad you brought that up. If you`re going to point the finger at somebody, you better be prepared to rat them out all the way. You can`t just say, yes, it`s not my purse. Whose purse is it? Let have her come on in and take the flak for it.

BONADUCE: True enough.

DIAZ: Because it`s one thing --

(CROSS TALKING)

BONADUCE: And on another --

DIAZ: All right, go ahead. Go ahead Danny.

BONADUCE: I`m sorry -- and on another side note --

DIAZ: Yes.

BONADUCE: I used to, as you well know, have my substance abuse problem --

DIAZ: Fifteen seconds go ahead.

(CROSS TALKING)

BONADUCE: What kind of coke head do you know that just forgets they left a whole (INAUDIBLE) in somebody else`s purse. It`s the kind of thing you remember.

DIAZ: All right guys. Great job once again. Thanks to my fabulous panel for joining me tonight.

Police say they have a person of interest in the brutal murder of a teenage cheerleader. Nancy Grace has the latest coming up next.

You`re watching ISSUES on HLN.

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