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@THISHOUR WITH BERMAN AND MICHAELA

Cybercrime Crackdown; Obama Administration Knew About V.A. Wait Times; Secret Wait Lists at VA Hospitals; King of Pop Makes Holographic Billboard Music Awards Appearance; Michael Sam Docu-Series by Oprah Postponed; The Carters All Made Up

Aired May 19, 2014 - 11:00   ET

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


MICHAELA PEREIRA, CNN CO-ANCHOR: FBI agents kicking down some digital doors @ THIS HOUR, busting dozens of alleged cybercriminals accused of invading your home through your computer and using it to steal from you and spy on you.

JOHN BERMAN, CNN CO-ANCHOR: And it's not just Phoenix. Another V.A. hospital is accused of keeping secret wait lists.

A whistle blowing doctor says veterans with serious heart conditions, gangrene, even brain tumors waited months for care. The outrage, growing.

PEREIRA: The virtual King of Pop stunned at the Billboard Awards, but five years after his death, did the hologram of Michael Jackson honor the legend or was it just unsettling?

BERMAN: Hello, everyone. Great to see you today. I'm John Berman.

PEREIRA: And I'm Michaela Pereira.

Those stories and much more, right now, @ THIS HOUR

This hour, two major stories about computer hackers, one involving criminals who can get into your home computer, the other is an historic case of cyber-espionage.

BERMAN: Yeah, Attorney General Eric Holder announcing just a short time ago that for the very first time the U.S. has filed charges against Chinese military officers. They're accused of hacking into several major U.S. companies to steal their secrets.

(BEGIN VIDEO CLIP)

ERIC HOLDER, ATTORNEY GENERAL: This case should serve as a wake-up call to the seriousness of the ongoing cyber threat. These criminal charges represent a groundbreaking step forward in addressing that threat.

(END VIDEO CLIP)

BERMAN: Our Laurie Segall is here to talk about the personal computer hacking story in just a moment.

But first, justice reporter Evan Perez is here. Evan, let's talk about this case with China, historic to say the least.

EVAN PEREZ, CNN JUSTICE REPORTER: That's right, John. It's the first time that the U.S. has ever charged Chinese government officials with hacking.

They are talking about the secretive unit of the PLA, the Chinese Peoples' Liberation Army, that's based in Shanghai and that specializes in stealing secrets from U.S. companies, and this is something the U.S. says is costing billions of dollars to the U.S. economy.

We're talking about jobs at risk here, and this is a big deal simply because the Chinese for years have been saying give us some proof, and so now we have the proof.

PEREIRA: Talk about how prosecution will work. You're talking about China. You're talking about the United States. How widespread is all of this?

PEREZ: The U.S. says this is a major problem. The Chinese are the number one spies on U.S. soil now. This is after, obviously, the Cold War when we were most worried about the Russians,

Now this is about economic espionage. This is about getting an advantage in their economy to try and steal stuff from the United States to try to advance Chinese companies, and they say this is something that is just the beginning.

BERMAN: So the Chinese have been saying for a long time, show us the proof. Today the United States is showing them the proof. Any response from China on this?

PEREZ: We haven't heard yet from the Chinese, but, you know, the U.S. is giving examples. Westinghouse, Alcoa, we're talking about big, big name-brand U.S. companies that are very high-tech companies that are doing business in China and around the world.

BERMAN: Could be some serious ripple effects here.

PEREIRA: Absolutely.

We also want to turn to another story. The FBI and police in several countries are taking down dozens of alleged cybercriminals.

We're talking about people who break into your home computer through your computer then use your Web cam and your keyboard against you.

BERMAN: They do it with a computer program called Blackshades that comes as an innocent little e-mail. Always does, right. It invites you to open it.

Evan Perez, also covering this angle, he's joined by Laurie Segall who's covering kind of the how-to angle this.

Evan, let's start with the arrests, first. Who is the FBI after here?

PEREZ: The FBI and police in about 17 countries in Europe and Canada went after over 100 people they arrested.

They did about 300 searches all over Europe and Canada, and basically the FBI says that these guys have been hacking into your computers, doing bank fraud and extorting people's money from them.

And, you know, we have a bit of an explanation from Leo Taddeo of the FBI who tells us a little bit about how this goes down.

(BEGIN VIDEO CLIP)

LEO TADDEO, FBI CYBER/SPECIAL OPERATIONS DIVISION: The key logger in Blackshades can recover your passwords and all of your access credentials so that what you believe is the secure entry into a bank Web site has been hijacked, if you will, by a cybercriminal.

(END VIDEO CLIP)

PEREZ: And the key word there is hijacked. Many times people don't even know their computers have been infected.

PEREIRA: Well, to that end, how are you supposed to know? Laurie, maybe you can answer this.

How on Earth are you supposed to know that you've become victimized from something like this if it is happening kind of in the shadow of the cyber world?

LAURIE SEGALL, CNNMONEY TECH CORRESPONDENT: I hate to be the bearer of bad news here, but it's really difficult to know.

So what's so scary about this is that you could be hijacked, you would have no idea that someone could remotely turn on your Web cam, that they could, as you're typing key strokes, look and capture your bank account information.

And also there's a tactic that these hackers use called social engineering to a point where you think, OK, don't click on a random link. That's how they install this malware on your computer.

But what they do is something very smart. They'll use social engineering so they'll find out a little bit about you and try to target an e-mail to you or a Facebook message or something you might trust or you might want to click on.

Once you click on it, it's on your computer. You have very little idea that it's even there, and then you have stuff happen where we look at what happened to Miss Teen USA, which was pretty awful, and that's how this really happens.

BERMAN: That's outrageous, what happened to Miss Teen USA. She was being looked at. I'm looking at my computer here. Her Web cam was spying on her without her knowing.

I mean, I don't understand the technology. I don't understand how these people can do that to these machines. SEGALL: It's essentially malware. It's very, very basic. And what's scary, as Evan learned, is it's something like $40 and people are buying this on the Dark Web, and it's very easy to do.

And it's literally as easy as downloading this and getting access to this software and then targeting other users.

PEREIRA: The technology is a bit like that remote administrative tool that even some of the tech companies use if they want to remotely access your computer from home and help you download software.

Similar kind of technology, right?

PEREZ: Right, there's similar software that has legitimate uses. A lot of people want to see if they can -- if they're at home, they want to be able to get to their computer at work, or if they're at work, they want to be able to get to their computer at home.

So that's one of the legitimate uses.

PEREIRA: But this takes a really dark turn.

PEREZ: This takes a different turn. And, you know, these guys are very sophisticated. They have employees would help problem solve.

If you downloaded the software and it wasn't working right against your victims, they had people who could help you do that.

PEREIRA: Wow.

BERMAN: Laurie, just quickly, what do I do to avoid this besides not opening any attachments ever?

PEREIRA: Help us, Laurie.

BERMAN: OK. Definitely do not click on anything you don't know the source. Update your anti-virus software on your computer, so important.

And here's just a random one. This might not be specifically here. Be very careful about connecting to Wi-Fi, in general.

I was just at a hacking conference. Someone showed me how they could essentially hack traffic lights by exploiting Wi-Fi. Be very careful about that, in general. It's very important.

BERMAN: That's a tough one. I get free Wi-Fi wherever I can.

PEREIRA: But don't you think (inaudible). Now he realize if it's free, maybe it's not worth it.

Evan, Laurie, it was your debut, @ THIS HOUR. We thank you both for being here on our program.

SEGALL: Thanks for having us.

PEREZ: Thank you.

BERMAN: The hazing comes later.

PEREIRA: Exactly.

Let's take a look at some other headlines that are making news @ THIS HOUR.

The first case of a deadly virus called MERS, Middle East Respiratory Syndrome, has been transmitted inside the United States.

Now according to the CDC, an Illinois man contracted the virus after meeting with the first person infected with the deadly virus in the U.S. That patient got MERS following a trip to Saudi Arabia.

Health officials say the Illinois man contracted the virus after face- to-face contact. a 40-minute meeting, but that he's not sick nor has he been hospitalized.

BERMAN: Malaysian Airlines says it will not abandon the families of Flight 370 crew members. Some families claim the airline is refusing to help them after they hired foreign lawyers.

In a statement the airline argues these foreign lawyers have directed that MAS cease from any further direct communication. It goes on to say, "As for family members without legal representation, the airline has been in contact with them via the family support center."

PEREIRA: How about this for a selfie? A California firefighter took this selfie, all in an effort to show his wife he was A-OK. That photo went viral and it went viral fast. In just a couple of hours, more than 30,000 people liked it on Facebook.

The good news is, also, crews are still fighting those fires in Southern California, but here's the good news. They're getting a bit of a break from better, milder and cooler weather.

Lots of people who had to evacuate are now back in their homes, so that's some good news there.

BERMAN: New allegations about potentially deadly wait lists at V.A. hospitals. First, it was this Phoenix hospital. Now a whistle blowing doctor tells "The Daily Beast" that veterans with serious heart conditions, gangrene and even brain tumors waited months for care at the Albuquerque V.A. hospital.

We'll speak live to our own investigative reporter who was really the first to expose wait-list fraud at V.A. hospitals.

PEREIRA: Still ahead, the buzz over the Billboard Awards, Michael Jackson stealing the show with a performance of his latest single. That all sounds crazy, right. because he's been dead for five years?

How did this all work? We'll show you.

(COMMERCIAL BREAK) PEREIRA: The White House says President Obama is madder than hell about reports of treatment delays at hospitals serving veterans, but was the president warned years earlier of the deadly practice?

A "Washington Times" report says the Obama administration did receive clear notice even before Mr. Obama took office.

BERMAN: Our senior investigative correspondent, Drew Griffin, has been way out in front of this story. He was the first to expose the disturbing allegations at several V.A. hospitals, reporting that at least 40 veterans died while they were waiting for care in Phoenix.

Drew joins us now from Atlanta. Drew, talk about this "Washington Times" story first, that President Obama, or at least his team, was briefed before he even took office.

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Certainly. It was transition time, right, and he was trying to learn about all the problems that he was going to inherit and take over as president.

This apparently was one of them, specifically telling the president and his staff that, you know what, the V.A. wait-time data that they're about to brief you on, it's unreliable.

What is a little bit startling about that "Washington Times" report to me is everybody should have known that decade ago. That's when the Government Accountability Office first began sounding the alarm, Michaela and John, that the data that they were getting from the V.A. on these wait times was completely unreliable and that warning has been sounded year after year after year by their health director there.

And I just want to bring up one more point. The president, in 2007, Senator Barack Obama, gave a speech to the VFW in which he specifically addressed these wait times.

Let me give you the quote. "No veteran should have to fill out a 23- page claim to get care or wait months, even years, to get an appointment at the V.A."

He vowed to fix this back in 2007, apparently was briefed on it again in 2008 and if he's been watching our reports or getting the inspector general reports, it's hard to believe everybody in Washington didn't know this was going on.

PEREIRA: And then add to this. You talk about sounding the call, and there's another story from "The Daily Beast." They're reporting allegations of yet another hospital with these secret wait lists that we've been talking. This one in Albuquerque, New Mexico.

In fact, one of the doctors alleged that veterans with serious conditions, like serious heart disease, gangrene, even brain tumors, waited months for care.

Do we have any way -- do you have a sense of just how widespread and how systemic this is? GRIFFIN: This is what we know right now. In ten different states there are allegations and/or inspector general reports going out and looking into wait list problems, denied, delayed care which led to adverse results, adverse medical results. We know of two or - actually four states where delays in care led to deaths. Michaela we are getting tips now and whistle-blowers coming faster than we can check out. I just got one from a doctor, I won't tell you the state, but he is telling me that this delay in care in one of these hospitals caused a man to get his leg amputated. He was a diabetic patient. A doctor recommended immediate procedure being done on this person's foot. He had to wait five months. Infection spread and his leg was gone.

We're getting those kinds of tips now coming from all over the country, quite frankly, because one doctor in Phoenix, Dr. Sam Foote, was brave enough to come forward and sound the alarm on this. And that kind of -- although it's been reported out there for a long time, his courage to come forward and talk about this alleged secret list gave many others in the V.A. system the courage to come forward with their information as well.

BERMAN: Drew Griffin, thanks so much for being with us. As we said, you were way out in front of this story. Really the cutting edge of the reporting here that's causing all these reports to come in and hopefully will help cause serious reform in this system so veterans get the care they need. That's the important thing here, we want to make sure they get the care they need.

PEREIRA: How frustrating. I was just thinking about how frustrating it must be for the doctors who are saying this is what they need. I'm here to help provide care and yet their hands are tied in many cases.

BERMAN: Got to be infuriating. Sixteen minutes after the hour. Then there's this. Back from beyond the grave. How Michael Jackson moon walked through the Billboard Awards with a stunning and shall we say slightly shocking performance.

(COMMERCIAL BREAK)

BERMAN: All right, I don't want to ruin this for you but that's not actually Michael Jackson. That's a hologram of Michael Jackson that hit the stage last night in the Billboard Music Awards.

PEREIRA: Entertainment correspondent Nischelle Turner joins us from beautiful Los Angeles. He's crazy. That's out of the way. So if you know, I want to know what people think of this. I know a lot of people were debating whether they thought it was cool or if it was creepy. Is this a good way to honor the music icon that we lost or is it too bizarre for some tastes?

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: I think it's all of the above, if it can be. It may have been a lot creepy. A whole lot of cool. A little bit bizarre. I think all of that put together makes it fascinating and that's what makes good television. That's why we're talking about it. If you look at that right there, look at that on the screen. It just kind of puts you in a trance looking at it. The moves were very eerily accurate looking I would say.

The performance was produced by Michael's estate. If you saw, last night, the performance, you see that it brought a lot of tears to the eyes of quite a few fans in the audience. The reaction on social media was mixed. I was looking at it last night and some people were really expressing shock at how lifelike they thought this looked and other people were saying it was just downright disrespectful and distasteful and we should let him rest in peace.

BERMAN: Can I say, the cool versus creepy argument having to do with Michael Jackson, forgive me for saying this and I may get in trouble, but isn't that a summation of the last 20 years of his life? There are a lot of questions about this type of thing in general. How did they pull this off?

PEREIRA: Send the e-mails to John Breman. Please.

BERMAN: It's true, I'm sorry. Talk to me about how they pulled it off. Is this the same technology that they had with 2Pac and the Elvis thing?

PEREIRA: It looks like it is a little more sophisticated.

TURNER: Yes, this one was pretty sophisticated. Although they are not releasing all of the details. They are keeping a bit of mystery there. If you hear he was performing his new hit Slave to the Rhythm. This debuted last week at No. 1 in 50 countries, this new album of his. I don't know all of the details but according to the show's producer they say this performance was the result of nearly six months of planning and filming. They brought in the Talauega brothers, who are longtime associates of Michael Jackson's, to choreograph the hologram and other dancers. They did do a lot there. They took a lot of time on it as well.

PEREIRA: While we have you Nischelle, I want to talk about something else that's making headlines. Michael Sam's reality show on OWN. Not happening now. What happened here?

TURNER: I don't know if we had anything to do with this, guys. It wasn't too long after we had a pretty spirited debate on Friday whether he should or shouldn't do this docu-series or reality show that the Oprah Winfrey network announced it would postpone the series. What they said was they did not want to hurt Michael Sam's chances of making it on the Rams, which is some of the argument that we were presenting on Friday.

The network said that postponing the project in their words would give Michael the best opportunity to achieve his dream of making the team. Michael Sam's agent also released a statement saying the delay in the docu-series is going to allow him to have a total focus on football, which is what we heard him say from the beginning that he wanted to do, and ensure there would be no distractions to his teammates.

Now in the reporting over the weekend from various media outlets, I did see where the Rams said they didn't even know about this docu- series before it was announced. In a meeting with the team, both sides decided, you know what? Let's back off. Probably because the Rams said slow down.

BERMAN: Make the team and film whatever you want. Robin Roberts, from "Good Morning America", was on "RELIABLE SOURCES" over the weekend with Brian Stelter, who we are going to see in a minute here, and she was talking about the whole issue with Michael Sam and the kiss when he was drafted. Let's listen to what Robin had to say.

(BEGIN VIDEO CLIP)

ROBIN ROBERTS, ABC HOST, "GOOD MORNING AMERICA": What was he supposed to do? Shake his hand? Really. I think it was one of those moments also when you see it - when you saw it happen, it was spontaneous. It was natural. It was so quick. When you see the picture it seems like it's different than what occurred. That doesn't matter. It doesn't matter. He's happy like every other young man was happy.

(END VIDEO CLIP)

BERMAN: He's happy. He has that moment. Now he can concentrate on playing football and making a team and we'll see what happens next.

TURNER: Can I just say I'm a proud Missouri Tiger so I hope he becomes rookie of the year in my unbiased opinion.

PEREIRA: We hope so too.

BERMAN: Not doing the video will help.

PEREIRA: I think it will too. This seems like one of those backtracks that makes sense, don't you think?

TURNER: And I want to see him do all things, so make the team Michael.

BERMAN: Absolutely. Nischelle Turner, always great to see you. Please come back again and again and again.

TURNER: Please invite me again and again and again.

PEREIRA: There's a standing invitation darling, know that.

It looks like the Carters have made up and they are over that epic elevator fight. Moving on.

BERMAN: That's right, Jay-Z and Beyonce just dropped this star studded trailer for a fake movie titled "Run," based off the upcoming concert tour. The almost four minute clip features big names. Jake Gyllenhaal, Sean Penn, Don Cheadle and Blake Lively.

PEREIRA: If it were a real film, would you see it?

BERMAN: If you made me.

PEREIRA: Also this, Beyonce posted on Instagram a picture with her sister over the weekend. The Knowles sisters and Jay-Z reportedly hanging out and having fun with Solange in New Orleans. BERMAN: They win the publicity game once again. The Solange thing only adds to the buildup of this video and everything. Congratulations to them.

PEREIRA: The recently fired executive editor of "The New York Times" breaking her silence. Find out where she said it, what she said and what to make of it all.

(COMMERCIAL BREAK)