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NEWS STREAM

Vigilante Groups, Drug Cartels Battle In Southwestern Mexico; How Are Chicken McNuggets Made?; Candlelight Vigil Held For Philip Seymour Hoffman; Sony to Sell PC Business; U.S. Homeland Security Warns Bombs Could Be Hidden Inside Toothpaste

Aired February 6, 2014 - 8:00   ET

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


KRISTIE LU STOUT, HOST: I'm Kristie Lu Stout in Hong Kong. And welcome to News Stream where news and technology meet.

Now preliminary events get underway at the Winter Olympics in Sochi as a new terror threat emerges.

We take a close look at the drug war in Mexico, introduce you to the head of the Knight's Templar cartel.

And Sony sells off its PC business as it warns that it will lose $1 billion this year.

The stage is set for Friday's opening ceremony of the winter Olympics in Sochi, but competition is being overshadowed by a new potential threat. Now U.S. Homeland Security is warning airlines flying to Russia to look out for the possibility that explosives could be hidden in tubes of toothpaste or cosmetics.

Now Russia says it is looking into the threats, but it says tough security measures ensure that Sochi will be safe.

Now Amanada Davies spoke to the head of the Sochi games and asked him about some of the big issues facing the games.

(BEGIN VIDEOTAPE)

AMANDA DAVIES, CNN SPORTS CORRESPONDENT: How disappointing is it, though, that you have athletes arriving to compete at an Olympics fearing for their safety?

DMITRY CHERNYSHENKO, CEO, SOCHI 2014: Sochi likely to be the most safe place in the world. And from the beginning of the project in preparation with international expert in security and supervision of the IOC Russian authority did those (inaudible) the safe and friendly environment here. DAVIES: But there is also the protests that are happening around the world today against the anti-gay propaganda law. It is not allowed for athletes to protest within the venues, but what would your reaction be if you were to see an athlete get on the podium and make a statement?

CHERNYSHENKO: The first of all we would have to understand that any discrimination by gender, sexual orientation or religious is prohibited in my country by constitution and also by Olympic charter.

Athletes are free to express themselves. And for those who want to demonstrate something, we organize what we called Sochi speaker corner. It's nearby. It's even closer than downtown of Sochi.

(END VIDEOTAPE)

LU STOUT: Now there are about 28 hours to go before the game's opening ceremony, but the competition has already started. Some events, they got underway today, but it is worth noting that this is just a preliminary competition and the medals won't be awarded until after the games officially begin.

Now the ski jump at Sochi is one of the brand new sporting centers built just for the games. Now it ballooned over budget and it fell way behind schedule. And now there are allegations of mismanagement and accusations that the laborers were not paid.

Our senior international correspondent Nick Paton Walsh looks at the high price tag and the human cost of this project.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: And the skiers aren't the only ones taking a deep breath ahead of this plunge into the unknown. The Kremlin also gasped when they saw the price tag of this ski jump, perhaps the most expensive ever, at a staggering $265 million. And here, two weeks ahead of the games still not ready.

Putting something like this in a place like here is never easy, but it's the outstanding sums of money involved that have raised eyebrows. People asking who got the cash and who should have, but didn't.

(voice-over): This slope has clearly been vexing Vladimir Putin awhile. Here he is last year with a then deputy head of the Olympic committee Adhmed Balalov (ph). The project was behind schedule and way over budget. And the Kremlin head made short shrift of Balalov (ph).

He was soon fired, put under an investigation and fled to the UK where he declined to comment.

trouble at the top, but also at the bottom. The hands that built the ramp, often migrant labor shipped in from impoverished Uzbekistan toils, but according to some didn't get paid.

Human rights worker Simian Smirnov launched complaints with authorities for nearly 20 of them.

"Really," he says, "the number who weren't paid was a lot higher, they just didn't report it."

As we got talking, police stood nearby and asked him for his documents.

(on camera): We've been here two minutes now and this policeman is still trying to get him to show his documents. And I think many activists will say this is the kind of harassment by law enforcement they've been seeing over the past few years.

(voice-over): We tracked down two of the workers back home in Uzbekistan. One, Sharkhoch (ph) said he hoped everyone enjoyed themselves at the games. He just wanted his money.

And Hussein (ph) said his six children and wife lacked clothes and food because of this, but he still hoped tourists had a good time there.

Is a ski jump in a mountain resort really that hard? Exorbitant costs, a boss and workers now out of Russia and enduring fears there might not be enough snow.

The frailties of modern Russia laid bear after 14 years in Putin's icy grip.

(END VIDEOTAPE)

LU STOUT: Now Nick Paton Walsh is in Sochi. He joins me now live. And Nick, I mean so much unfinished work there, unpaid wages that we learnead bout in your story just then, also we've seen these images going viral of unfinished roads and accommodation there. Are you still seeing that this a work in progress, construction work still being done today?

WALSH: I think obviously in a massive event like this, people look for the details. And for those paying a lot of money for five star hotels not having things in order is a big deal.

But I think it's not emblematic of a complete failure behind me. The venues look in pretty good shape. The roads are there. The security dragnet is there. We're not seeing people arriving at the airport and not being met by those put in place to escort the athletes.

So I think the opening ceremony will pass well. Most people are pretty relaxed about security initially. It may not be the case for outside of the Olympic venues and further east into southern Russia where the insurgency is. But those images being shown of brown water in bathrooms and hotels, we went to one bathroom where they could pull the bath away from the bathroom wall itself, this is obviously causing a lot of anxiety for those coming here expecting a five star kind of deluxe service.

But at the end of the day there's been a massive construction job behind me. It's 95 percent there, mostly successful. And I think you'll remember before Beijing the stories even of athletes themselves talking about the dirtiness, frankly, of the accommodation they've been given, Kristie.

LU STOUT: That's right. And thank you for the fact check there of the infrastructure readiness there in Sochi.

But also concerns about the level of security inside that so-called ring of steel. I mean, what does it feel like for the athletes and the visitors there?

WALSH: Well, it's interesting. I mean, my colleague Ivan Watson was just there to meet the U.S. athletes coming in. And he reports a pretty jovial, relaxed confident atmosphere when they got off the plane, very on message much of the American delegation it seemed.

But while I was there yesterday talking to the Austrians, there was a little bit more nervousness, it's fair to say. One young German snowboarder, in fact, the minute he got off the plane, saw all these soldiers and said, wow, he hadn't really expected that kind of security presence. His first Olympics.

I think there will be some perhaps taking comfort in the level of security here. Some people say it's more discrete than previous Olympics. But also it comes with a larger background noise of anxiety, or concern because this is put on the edge of an insurgency.

Southern Russia is deeply volatile, blasts happen almost every week. In fact, in the last 48 hours there have been a number of operations in Dagestan to try and target militants. So that's the background concern of this. And that's, of course, why any threats or anxiety here is perhaps taken more seriously than they would have been, for example, in Canada in Olympics past -- Kristie.

LU STOUT: And finally, Nick, I mean, we know that Russia has spent over $50 billion on the games. From what you've seen and reported on from the ski slopes to the venues to the security, how much of that, over $50 billion pricetag has been properly spent?

WALSH: You ask a lot of people when they get off the plane what does $51 billion worth of games look like and they struggled to answer. And I mean, opposition critics say that half of that fell into the pockets of those loyal to the state assisting in this, an embezzlement in some way. The Russian government says about $6.4 billion was in fact spent on the Olympics, the rest was just in getting the infrastructure of what was previously a very developed border town on the edge of southern Russia just seven years ago.

So a mammoth task they've had here. But I think you've got to bear in mind what $51 billion means to the Kremlin, it's about being able to find that money. When Putin came to power in the late 90s it wasn't really there. They had a bad economy. They're really struggling in many ways to keep the country afloat. And I think perhaps the fact they can brandish that pricetag quite so openly is a way of suggesting Russia's back on its feet.

Many problems in constructing, many problems in Russian society, nonetheless political freedoms almost nonexistent. But still this is about restoring the country to its former Soviet glory. And that's why Putin is going to be at front and center in the opening ceremony coming up tomorrow -- Kristie.

LU STOUT: Vladimir Putin front and center. Nick Paton Walsh joining us live from Sochi. Thank you.

Now as mentioned earlier, the United States has flagged a new terror threat warning airlines flying into Russia that explosives could be hidden in toothpaste or cosmetic tubes. And before that alert broke, the U.S. Secretary of State John Kerry, he sat down with CNN's Jake Tapper and commented on the games and the security.

(BEGIN VIDEO CLIP)

JOHN KERRY, U.S. SECRETARY OF STATE: Well, I believe that anybody who wants to go to the Olympics, which are just a great event, should go. And we're not telling people not to go. I think it will be as safe as you can make any large public event. Our diplomatic security people are on the ground there. We have 140 personnel, government personnel representing FBI, department of homeland security, diplomatic security, consular affairs, embassy, military all working under the same roof in a coordinated way with the Russians.

(END VIDEO CLIP)

LU STOUT: John Kerry there.

And even if you're not able to travel to Sochi you could still explore the Olympic venues. You can check out this interactive map on our website. The Bolshoi Ice Dome is one of two arenas hosting ice hockey. And altogether, there are some 98 events this year, 12 are making their debut in Sochi.

And nine of those new events feature skiing. You can learn more about some stars from the slopes and other athletes who dominate on ice. You can find it all, CNN.com/Sochi.

Now, some news that's closer to home for us here at News Stream, a suspected bomb was found right here in Hong Kong today. Now police told us that they have not yet identified what type of bomb it is. It was discovered at a construction site near some hotels in the Happy Valley neighborhood. Now Happy Valley is considered a central neighborhood on Hong Kong Island. The area is home to historic Sikh Temple, the Hong Kong Sanitarium and Hospital. And a Happy Valley Race Course.

And people have been told to evacuate the area.

Now we have much more still to come this hour on News Stream. Up next, some call it a necessary right of passage, others consider it female genital mutilation. Why some women are taking a stand against the practice in Indonesia.

And we'll tell you about the arrests made after the death of Philip Seymour Hoffman and get the latest on the investigation.

And a special report on one of Mexico's most wanted. We'll have an interview with the man known as La Tuta. He is at the helm of a dangerous drug cartel.

(COMMERCIAL BREAK)

LU STOUT: Welcome back.

Now each year it is estimated 3 million girls undergo a painful procedure that can harm their health forever. It's according to the United Nations, which is calling for an end to female genital mutilation, or FGM.

Now the head of UN women says this, quote, "while the practice of FGM is a tradition in some parts of the world, it cannot be justified on the grounds of religion or culture. It is a violation of human rights and is a manifestation of gender inequality."

Now the practice is common in parts of Africa and some Arab countries. It involves the partial or total removal of the external female genitalia for non-medical reasons. And nearly half of all women who have experienced FGM, they live in just two of these countries, Egypt and Ethiopia. It is also practiced among certain ethnic groups in Asian countries, including Indonesia.

Now Saima Mohsin has more now from west Java where an Islamic group offers a version of the procedure.

(BEGIN VIDEOTAPE)

SAIMA MOHSIN, CNN INTERNATIONAL CORRESPONDENT: Carried in proudly by their mothers first celebratory mass circumcision. Babies and toddlers laid on a makeshift bed, their legs spread open, pricked with a pin on their genitalia. The procedure is cheered on and gifts collected.

Arron's (ph) daughter is five months old. She says it's been done to clean her.

"It's compulsory according to Islam. They only pierced her upwards a bit," Arron (ph) explains. "The aim is to reduce sexual pleasure or to completely stop it.

Miman has brought her two-year-old granddaughter to be what she calls circumcised and explains, "if a girl isn't circumcised, there's too much sexual desire. They lust for sex too much."

The Indonesians call this female circumcision. The UN and the World Health Organization call it female genital mutilation, or FGM, recognized internationally as a violation of human rights, these babies and toddlers too young to speak for themselves.

The people here consider the procedure acceptable, because it's only a partial removal of the female genitalia using pinpricks, unlike complete removal practice in other countries, particularly in Africa.

But either way, those opposed consider it mutilation. And some Muslim women are taking a stand.

Sonya Irawan (ph) is 40. She underwent the procedure as a baby, but has decided not to have her 13-year-old daughter Wendy cut. She's managed to take a stand against her family and tradition.

UNIDENTIFIED MALE: Well, the doctor tells me that it not to be done. It's not such a must. And it has no health benefits on her. It would be like giving her difficult with having relationship with her future husband.

MOHSIN: Female circumcision was banned in Indonesia in 2006. The Islamic (inaudible) council released a fatwa against the ban in 2008. And the practice didn't stop.

So the government decided to reverse its decision and regulate it instead, stipulating a more limited procedure. But no matter how big or small, even this partial procedure will have long-lasting effects on a woman's health.

Lakhman Hakim (ph) organizes this mass circumcision every year. He says it makes the women and girls more respectable, but adds that it's not compulsory.

"We prefer them to be circumcised. If they think it's better not to be circumcised, let them be."

Many Indonesian Muslims carry out the procedure as part of their religion without question. This is a sensitive subject.

With most females cut between infancy and the age of 15, they have no voice, no choice on whether they want their body and sex lives to be altered forever.

Saima Mohsin, CNN, Bandung, Indonesia.

(END VIDEOTAPE)

LU STOUT: That's horrible to see what's happening to those little baby girls.

You're watching News Stream. And still to come on the program, while fans of actor Philip Seymour Hoffman come to terms with his death, three suspects arrested in case appeared in court. We'll have more after the break.

(COMMERCIAL BREAK)

LU STOUT: We're live from Hong Kong, you are back watching News Stream.

And time now for your global weather forecast. And reports of snow for northeast Asia. Let's get the details now with Mari Ramos. She joins me from the world weather center -- Mari.

MARI RAMOS, CNN CORRESPONDENT: Hey, Kristie, that Hong Kong scandal looked absolutely beautiful. I loved that with the clouds. Anyway -- but yes, a lot of snowfall expected across portions of northeast Asia. We're talking about cities like maybe Beijing and then as we head over toward the Korean peninsula and then back over toward Japan. This is going to be something to watch over the next couple of days.

Now, especially in China there's still a lot of people traveling after the lunar new year celebrations and after -- and, you know, the spring festival. And so I think this is really going to put a damper on any kind of travel. It's going to be very difficult over the next couple of days.

These are the temperatures. And it's already, as you can see, below freezing in many areas.

Temperatures will remain cold across this region. And this is what it looks like on the satellite. We have this weather system that is continuing to just trail along here. And there's some cloud cover moving in just north of Beijing right now. You're probably going to get a little bit more mixing in the air helping clear out -- helping with some of the air quality problems there.

But then we'll start to see a little bit more moisture getting into this and that is when the chance for snow will come.

Eventually that will move across the Korean peninsula and then over Japan, especially on the areas facing the sea here on the western side. We'll see more in the way of snow, but we can even see some significant snowfall in places like Tokyo.

These are some of the snowfall totals that our computer models are predicting. Maybe 4 centimeters in Beijing. Doesn't seem like a lot, but that's enough to really cause some travel problems, especially in these areas right in there. Wherever you don't see that it's going to see snowing, it's going to be raining a very cold rain. And there's the potential for some icy conditions.

And notice back over toward the Korean peninsula, also they're expecting some significant snowfall.

And then finally for Japan, you know, we'll have to see how things shape up over the next couple of days, but as I was telling you areas here to the west up to 12 centimeters not out of the question, 15 some areas locally hire and maybe 8 centimeters of snow for Tokyo. And that's pretty significant even for this time of year, so be prepared for the potential for travel delays starting through the day tomorrow and then over the next couple of days as we head into the weekend.

You know, when we talk about the big weather stories of the last few years, and especially over 2013. Of course, we had Typhoon Haiyan in the Philippines. We've had -- we've talked quite a bit about the situation in Australia with the very warm temperatures, the situation in Antarctica with the sea ice, but we haven't talked much about what's happened in California with the driest year on record. And unfortunately the worst drought in decades continues in this areas.

This is just one picture of one area. You can see the toll it begins to take because it has been so dry. Much of the area here across the west continues to be very dry. Areas like San Francisco have less than 100 millimeters of rain than what they are supposed to have. 80 -- minus 80 millimeters of rain needed in L.A. and minus 57 millimeters of rain in San Diego.

But, very much needed rainfall is headed their way.

This is pretty significant, as you can see right over here. We have a couple of areas of low pressure that will be making their way through this area. 14 millimeters of rain in L.A., 21 millimeters in San Francisco. Any amount of rain that we can get through this region will be welcomed. And you can see a lot of that snowfall also up into the mountains and into the western U.S. where they haven't had any snow, Kristie. So not like the eastern part of the U.S. that has had way too much. The west is really looking forward to these storm systems coming through.

There's going to be some problems, but I think overall it's much needed. Back to you.

LU STOUT: Yeah, yeah. And in terms of the situation in California just saw that banner behind you saying a welcome rain, a very, very, very welcome rain for so many people there. Mari Ramos, thank you.

Now, mourners have gathered at a candlelight vigil in New York to honor the actor Philip Seymour Hoffman. The 46-year-old, he was found dead on Sunday after a suspected heroin overdose. And now three people are facing drug charges. Alexandra Field reports.

(BEGIN VIDEOTAPE)

ALEXANDRA FIELD, CNN CORRESPONDENT (voice-over): Wednesday night in a Manhattan courtroom, three people believed to be connected to the heroin found in Philip Seymour Hoffman's apartment was indicted on drug possession charges. Juliana Luchkiw and Max Rosenblum, both 22 were charged with misdemeanors, while 57-year-old Robert Vineberg, a felony. Overnight, their attorney saying all three pled not guilty.

DANIEL HOCHHEISER, MAX ROSENBLUM'S ATTORNEY: My client by all accounts I know of has nothing to do with Philip Seymour Hoffman. My client is not responsible for Philip Seymour Hoffman's death.

EDWART KRATT, ROBERT VINEBERG'S ATTORNEY: These arrests and these charges have absolutely nothing to do with Mr. Hoffman's unfortunate death.

FIELD: A total of four suspects were arrested Tuesday night during this NYPD drug raid caught on camera not far from Hoffman's apartment. These photos show three of the arrests. The fourth person, 48-year- old Thomas Cushman will not be prosecuted. The Manhattan DA saying there was no evidence he had any control over the drugs.

Investigates found 350 small bags of what's believed to be heroin labeled red bull and blacklist. Different brands found in Hoffman's apartment call ace of spades and ace of hearts. One of the suspects, Robert Vineberg is a well-known jazz musician in a New York club scene. He had Hoffman's number saved in his cell phone. Vineberg's neighbors say they're surprised.

CHRISTOPHER, ROBERT VINEBERG'S NEIGHBOR: One of the nicest people I've ever met. Smart, goes out of his way to be nice. Great guy. Honestly

FIELD: Still unknown is what led Hoffman to relapse after 23 years of being sober. Some insight may come from his journal that investigators found in his living room.

New York's Broadway community still reeling from his death celebrating his life in a vigil last night.

(END VIDEOTAPE)

LU STOUT: And that was Alexandra Field reporting on the deaths of Oscar-winning actor Philip Seymour Hoffman. And the medical examiner's office says further studies are needed to determine the cause and the manner of Hoffman's death.

Now still to come right here on the program, there is something sinister going on in this quiet town in Mexico. We'll tell you what in a special report next.

And what is happening at Sony? And why is the electronics company selling off part of its business? We'll have that report as well just ahead.

(COMMERCIAL BREAK)

LU STOUT: I'm Kristie Lu Stout in Hong Kong. You're watching News Stream. And these are your world headlines.

Now the U.S. is warning airlines with direct flights to Russia that terrorists could hide explosives inside toothpaste tubes as the Sochi Winter Olympics gets underway. Now the warning, it's set to be based on new intelligence. Russia's deputy prime minister says the claims are being investigated.

The Italian navy rescued more than 1,000 refugees off the coast of Lampadusa on Wednesday. The asylum seekers were on over-crowded rafts that were in danger of sinking. It's believed that they are from sub-Saharan Africa.

North Korea has threatened to cancel family reunions planned for later this month. Now North and South Korea had agreed to allow a reunion for relatives separated after the Korean War, but North Korea says it may back out if the South holds its annual military drill with U.S. forces.

Now officials in Hong Kong have evacuated hospitals and hotels in the Happy Valley area after a suspected bomb was found at a construction site. Now a Chinese state-run media reporting that the bomb is believed to date from World War II. Police are investigating.

Now a vicious turf war is going on in southwestern Mexico where average citizens have taken up arms to drive out a notorious drug cartel. Now this violent struggle is a part of daily reality in Mexico's Michoacan state.

For the past year, vigilante groups like the one you see here, they have confronted the tyranny of the Knights Templar cartel. It is a ruthless organization. It traffics in crystal meth and engages in large- scale extortion.

Now the Mexican government is trying to fight back. It has deployed thousands of troops to the region hoping to establish some sort of central authority there.

And this week, President Henrique Pena Nieto announced a multibillion dollar investment plan to tackle some of the root causes of the problem. But the government's carrot and stick approach might be too little, too late.

And a warning for you, some viewers might find the graphic images in this next report disturbing.

Now Guillermo Galdos of Britain's Channel 4 brings us face-to-face with the tragedy of Michoacan. And introduces us to the man at the helm of the Knights Templar Cartel.

(BEGIN VIDEOTAPE)

GUILLERMO GALDOS, CHANNEL 4 NEWS: It's early evening. We're driving through the lawless state of Michoacan on our way to meet one of the most wanted men in the whole of Mexico. I wanted to investigate this state that's effectively ruled by a drug baron. His name is Servando Gomez. His nickname La Tuta.

He leads the notorious Knight's Templar drugs cartel. They have carried out thousands of gruesome murders among people who don't obey their rules.

La Tuta is on the run, $2.5 million on his head. A former school teacher who turned to cooking crystal meth, he's Mexico's answer to Breaking Bad.

As we arrive, all cameras are turned off. Then, there he is whiskey in hand and a gun in his back pocket. He insists we talk in front of a white board to disguise his hideout.

The atmosphere is tense. We are surrounded by heavily armed guards. So, I try to make some small talk.

(subtitles): "Breaking Bad" means turning bad in English. And for me, it's one of the best TV series ever.

SERVANDO GOMEZ, KNIGHT'S TEMPLAR LEADER (subtitles): Listen, if you knew hot it is made, you'd think the people who take it are really stupid. It's made from acid, the acid from car batteries.

GALDOS (subtitles): Yes, it makes your teeth fall out.

GOMEZ (subtitles): Everything falls out.

I repeat -- we are not going to fix the world. And that's business. There are people who dedicate themselves to business. But we all know that this is business.

GALDOS: Despite its beauty, the state of Michoacan is riddled with violence. La Tuta rules here like an unofficial governor. This is his kingdom. Everything has been corrupted. The Knight's Templar rule through a mixture of fear and intimidation.

Thousands have died.

Even the Catholic Church is afraid.

MONSENOR JUAN ESPINOZA, MORELIA DIOCESE: (subtitles): All those who live and work here in Michoacan live in fear. It's a fear we all have. We don't trust anyone. We feel fear when a van comes towards us or when strangers approach. Of course it scares us. And some of my brother priests have suffered difficult situations because of the organized crime.

GALDOS: With guns and money, La Tuta has a bizarre celebrity status. Despite being on the run, he makes the occasional public appearance. He hands out money to the mothers. With money, you can buy entire towns here.

GOMEZ (subtitles): Ever since I was a little boy, I was always altruistic. My mother told me 35 years ago that I would never have any money because I was always giving it away.

As we told you, we are a necessary evil. Unfortunately -- or fortunately -- we are here. If we weren't, another group would come.

GALDOS: La Tuta's web stretches from the capital in Morelia to the vast sea port of Lazaro Cardenas on the western coast. Although the port is in government hands, the cartel still does business here with the export of illegal iron ore. We secure rare access to a mine run by the Knight's Templar. We spoke to one miner who told us about their clients.

UNIDENTIFIED MALE (subtitles): The companies that are exporting the minerals are Chinese. They know the minerals are illegal, but they found their own little pot of gold. The companies you call illegal sell the minerals to legal companies so it can be exported.

GALDOS (subtitles): So they launder the minerals?

UNIDENTIFIED MALE (subtitles): Yes, they do.

If it's $13 million per ship, and we have around 30 ships per year, imagine how much money that is.

GALDOS (subtitles): And how much of that money is going to organized crime?

UNIDENTIFIED MALE (subtitles): 50 to 75 percent.

GALDOS (subtitles): It's a lot.

UNIDENTIFIED MALE (subtitles): Yes.

GALDOS (subtitles): So they make more money from iron than they do from drugs?

UNIDENTIFIED MALE (subtitles): Of course, of course, of course.

GALDOS: Astonishingly, La Tuta confirmed that he does do business with the Chinese.

(subtitles): What do you think of the Chinese?

GOMEZ (subtitles): Like everyone, they have the right to do business and expand their markets. Or to create more employment or more industry. The Chinese have some huge transnationals. They are really tough (EXPLETIVE DELETED).

Not one Chinese businessman has been kidnapped.

GALDOS: The Knight's Templar are entrenched in every aspect of the state economy. But in some villages, ordinary citizens are fighting back. They had enough of the cartel and its cruelty. They call themselves self- defense units. In other words, armed vigilantes protecting their communities because they say the corrupt local police are failing to do it. They're enemy is La Tuta and his men.

(subtitles): La Tuta?

UNIDENTIFIED MALE (subtitles): La Tutal.

HIPOLITO MORA, SELF-DEFENSE UNIT LEADER(subtitles): How can someone who chops off heads be well? Someone who blackmails, who robs honest people, a man who kills women and children.

UNIDENTIFIED MALE (subtitles): Our movement began because of the Knights Templar.

MORA (subtitles): Look what we've achieved in just eleven months without training, without intelligence. We've advanced a lot.

GALDOS (subtitles): How many towns have you taken back?

MORA (subtitles): About 15.

GALDOS (subtitles): How do the self-defense units finance themselves?

MORA (subtitles): With some lemon farms. They were abandoned by the Knights Templar. The lemons have a good price nowadays. Without help from any cartels or drug traffickers.

GALDOS (subtitles): Do you think you can finance this war with lemons?

MORA (subtitles): Yes.

GOMEZ (subtitles): And if they say that the problem is me and the Knights Templar, and that we are responsible for everything that is happening in Michoacan, well, let the federal and state institutions take action against us and establish the rule of law. We completely agree with that.

GALDOS: Over the past few months, Michoacan has descended into anarchy. In mid-January, the government finally acted. The army and the federal police were sent in to the state to stop the violence and disarm the vigilantes, exactly what La Tuta wanted.

They vigilantes refused to give up their guns. The army opened fire. And that's why today, in the village of Antunas (ph), they are burying their dead.

The victims, two men, shot, their families say, by the Mexican army.

The dead are serenaded like war heroes. Lining their route, is a guard of honor and members of the vigilante groups. Their weapons are proudly on display.

Everyone here is against La Tuta and the Knights Templar.

(MUSIC)

UNIDENTIFIED FEMALE (subtitles): Oh, my boy, my beautiful boy.

GALDOS: It's a village united in grief. They feel they've been totally abandoned, caught between the government and the Knights Templar.

Rodrigo Perez (ph) was 28-years-old. His grieving mother Juana (ph) told me about the day her son died.

JUANA PEREZ AVILES, VICTIM'S MOTHER (subtitles): It was about 10:30 when the shooting began. People started running and no one knew what to do. People started running and no one knew what to do. I started looking for him. I saw a woman carrying him. I didn't understand at that moment. The only thing I saw was that it was my son.

I don't think I will be able to cope with this pain. When do you think I will see my son again? Never.

UNIDENTIFIED MALE (subtitles): Daddy. Daddy. Please, don't leave me.

AVILES (subtitles): Don't go, my little boy. My boy. My boy.

UNIDENTIFIED FEMALE (subtitles): These people gave their lives for Antunez. That's why we want justice. The town of Antunez wants to be free.

GALDOS (subtitles): What would you say to the leader of the Knights Templar?

AVILA (subtitles): If I had him in front of my, I would say, sir, don't be so cruel. Don't spill so much blood. I wouldn't want him to feel this pain.

GOMEZ (subtitles): I don't want to fight with anyone. We want peace and tranquillity. We don't want to be the people who are blamed for causing problems in Michoacan. The problems in Michoacan are caused by self-defense groups and vigilantes. They are creating the situation. They are stealing, blatantly.

GALDOS: My audience with the man who runs Michoacan was coming to a close.

(subtitles): How is it that a teacher ends up where you are?

GOMEZ (subtitles): It was a healthy, honest job. But for me, with my hyperactive nature and aspirations, it wasn't satisfying. That's how things worked out, and here I am.

GALDOS (subtitles): How does it feel to be one of the most wanted men in Mexico? Are you scared?

GOMEZ (subtitles): As a human being I'm scared. Be sure of that. I what I represent and what I am. And one day something will happen to me. If we've made mistakes, I ask for forgiveness. I know that even if I apologize, not everyone will forgive me.

Yes, I am a criminal, and I know they won't forgive me.

GALDOS: Her agony is Mexico's agony. To date, more than 100,000 people have died because of the drugs war in this land. La Tuta is still at large. The vigilantes and the army are still looking for him. One might wonder why they haven't found him yet.

(END VIDEOTAPE)

LU STOUT: Incredible and illuminating access into a drug cartel there.

And we have another piece on the Mexican drug war. It's on our website. CNN's Rafael Romo takes a tour of a mansion that once belonged to one of La Tuta's lieutenants that was seized by vigilantes fighting the Knights Templar cartel. You can watch it at CNN.com/video.

And just ahead here on News Stream, how this famous Japanese composer tricked music fans for two decades. His startling admission after the break.

(COMMERCIAL BREAK)

LU STOUT: Now, Sony says it will sell its PC unit after warning that it expects a huge loss this year.

Now the struggling electronics giant now forecasts that it will lose over $1 billion this year after Sony originally forecast it would make a profit.

Now the Playstation 4 offered a rare glimpse of hope for Sony after a great debut, but on the downside, well, there's everything else. So, to help turn things around Sony's Vaio line of PCs will be sold to a private equity group. Moving away from PCs shouldn't come as a surprise. PC sales are falling and while tablet and smartphones sales are on the rise.

And Sony has won critical acclaim for its smartphones recently like the latest handset the Xperia X1 compact. Ngadget calls it, quote, "a good thing in a smallish package." While The Verge says, "it's a combination of power, battery life and form factor is simply unrivaled."

And still, the end of the Vaio line, it means one of Sony's oldest brands will disappear. Now Sony introduced the first Vaio PC all the way back in 1996. They have always stood out thanks to their distinctive designs.

Now the Vaio line had even a very high profile fan -- Steve Jobs. Apple's co-founder reportedly loved them so much that he asked Sony to make Vaio laptops that ran the Macintosh operating system. Now Sony turned Jobs down, a decision that may have changed the fortunes for two titans of tech.

Now let's stay in Japan. And for years the country's music loves, they have idolized this man. The deaf composure, he was hailed as Japan's Beethoven. And now it's been revealed that he is a fake. And for nearly 20 years he's been hiring someone else to write his music.

From Tokyo, here's Vladimir Duthiers.

(BEGIN VIDEOTAPE)

VLAD DUTHIERS, CNN CORRESPONDENT: Across Japan, music shops like this one are yanking copies of every CD released by Mamoru Samuragochi, the deaf composer who has been dubbed Japan's Beethoven, is now admitting that he is a fraud and that for nearly 18 years he's been paying someone else to write the music that made him famous.

Now, Samuragochi shot to fame after releasing this record, Hiroshima symphony number one, a classical music piece that was dedicated to those that were killed in the 1945 atomic blast that his parents actually survived. It sold more than 100,000 copies in Japan.

In a statement released by his lawyers who are apologizing on his behalf, they say that Samuragochi is, quote, "deeply sorry" and that he has, quote, "no excuse for betraying his fans and disappointing others." And that is an understatement.

The news is sending shockwaves across the country. And it as big of a deal here as the scandal involving the 80s German pop band Milli Vanilli in the United States. Some people might remember that back in 1990 they won a Grammy for their hit single "Girl You Know It's True." Now that Grammy was taken away after it was revealed that the duo were not the singers of that song.

Even Japanese Olympic figure skater Daisuke Takahashi has been caught up in the scandal. Takahashi was due to compete in the upcoming games in Sochi is planning to skate to a piece called Sonatina for Violin, one also not written by Samuragochi.

Vladimir Duthiers, CNN, Tokyo.

(END VIDEOTAPE)

LU STOUT: You know, it's such a bizarre story. And in another bizarre twist, the man who says he was paid to compose his famous works spoke at a news conference on Thursday. He says he does not believe that Samuragochi is even deaf. A lawyer says, however, a government certificate confirms the hearing impediment.

Now I want to tell you about a new technology that could let amputees feel again. Now this is said to be the first prosthetic to provide real time sensory information to the wearer. Now researchers from Italy and Switzerland developed it. And here is how it works.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The hand has several sensors attached to each tendon of each finger. We can use these sensors to understand the level of force the patient was performing while grasping an object.

(END VIDEO CLIP)

LU STOUT: Now Dennis Sorensen volunteered to test it. He lost his hand in a fireworks accident nine years ago and has worn a standard prosthetic ever since.

Now we'll let Sorenson himself describe the experience of wearing a sensory enhanced artificial hand.

(BEGIN VIDEO CLIP)

DENNIS AABO SORENSEN, CLINICAL TRIAL VOLUNTEER: You can feel round things and hot things and soft things and the feedback was totally new to me and suddenly when I was doing the movements I could feel actually what I was doing instead of looking what I was doing.

It was quite amazing, because suddenly I could feel something that I haven't been feeling for nine years. My kids, they thought it was cool. They even called me the cable guy.

(END VIDEO CLIP)

LU STOUT: Incredible. He felt the feedback.

Now that nickname is a reference to all the cables attached to the prosthetic you can see there. And scientists say this is the first step to a true bionic hand.

Now you're watching News Stream. And still to come, McDonalds wants to debunk rumors surrounding the so-called pink go by exposing what's actually inside its chicken McNuggets. And we'll show you how they make them after the break.

(COMMERCIAL BREAK)

LU STOUT: Welcome back.

Now a family in Tasmania taking a walk down to their local beach, they made a rather unexpected discovery -- a massive jellyfish. Just have to take a look at it, it has been described by scientists as a whopper. Yep, that was the apparently scientific term they used, it's called a whopper. It's around one-and-a-half meters in length. It was found in southern Tasmania in Australia. And scientists say the sticky blob is one of the largest ever surveyed and could be part of a new species.

Now the mysterious McDonald's McNugget. Now what exactly goes into the crunchy bite-sized chicken snack? Now you may have seen the debate playing out on the Internet, but now CNN's Jeanne Moos reveals what you've always wanted to know about this McDonald's meal.

(BEGIN VIDEOTAPE)

JEANNIE MOOS, CNN CHIEF INTERNATIONAL CORRESPONDENT (voice-over): How do we get from this to this? Irresistible little asteroids of battered chicken, mysterious in their origin.

UNIDENTIFIED FEMALE: Do they just throw a whole chicken in a blender and make a McNugget?

MOOS: Even more disturbing, the pink elephant in the room.

UNIDENTIFIED FEMALE: What are legitimately in McNuggets. Is there pink goo?

This photograph that's snaked around the internet with the caption, can you guess what McDonald's food item this is? It's said to be the entire chicken, eyes, guts, bones, ground up into something called mechanically separated poultry. Not us, says McDonald's. Photo hoax. But pink goo won't go away. For years, McDonald's has been trying to kill this photo. And now McDonald's of Canada has taken the goo by the horns, directly addressing the question of the Super Bowl commercial seen only in Canada.

UNIDENTIFIED MALE: What's actually in nuggets?

UNIDENTIFIED FEMALE: Is there any pink goop?

MOOS: Nope, nada, none. McDonald's wants you to see what's in their McNuggets so they've released a video tour starting with whole chickens. The breast meat is set aside to make McNuggets.

UNIDENTIFIED FEMALE: Dumping it into the grinder and adding the ground chicken breast meat to the blender with some seasonings and chicken skin.

MOOS: That's pretty much it. Ground up breast meat.

UNIDENTIFIED MALE: There's the pink goo image. Here's what we actually have. So it's very different.

MOOS: Yes, beige goo. Just kidding. Two independent food science experts told CNN that McDonald's seems to be giving the straight scoop. Of course, there's nothing healthy about all the fat and salt in McNuggets. There is one other secret revealed on the tour.

UNIDENTIFIED FEMALE: The four nuggets shapes, the ball, the boot, the bell, the bow tie.

UNIDENTIFIED FEMALE: Maybe that's a bow tie.

MOOS: No, that's a boot. Does this look like a bow tie to you? One thing they are not making McNuggets into is the shape of a snake.

UNIDENTIFIED FEMALE: Turn it into a bow tie.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

LU STOUT: I didn't realize they had different shapes.

Now before we end the show, I want to show you an unlikely hero whose singing is credited with stopping a robbery at a fish bait shop in the U.S. Just take a listen.

That's a blast from the past. All right, so I never said it was a person, this motion activated singing billy bass is meant to welcome customers when they enter the store, but it ended up scaring away an intruder who reports say left the shop empty handed.

And that is News Stream. But the news continues at CNN. World Business Today is next.

END