About Insurance Companies that dont pay out Life Insurance policies, even when they know their customer has died. And this mans investigation found that it is more widespread than you can imagine. When you found that, what went on inside of you . Unleash the hounds of hell. Lets go after them and expose them for the unconscionable, indefensible behavior. Bill whitaker Rikers Island holds about 10,000 inmates on 400 acres in the shadow of manhattan skyline. It is known as one of the worst jails in america, with a history of violence. What happened in the case captured on this video is a vivid and horrible example of how bad it can get. They watched him languish for seven days as he died. And they did nothing. It was the functional equivalent they killed him. Sharyn alfonsi youve probably been warned to be careful about what you say and do on your phone. Do i need to connect this . Yes. Alfonsi okay. But after you see what we found, you wont need to be warned again. So, are you connected . Alfonsi i am. And i have your email. And more importantly i have all the credit cards associated with that account. The president of the United States called me on my cell phone. So if the hackers were listening in, they would know that phone conversation. And that is immensely troubling. Alfonsi is everything hackable . Yes. We live in a world where we cant trust the technology that we use. Im steve kroft. Im lesley stahl. Im bill whitaker. Im Sharyn Alfonsi. Im scott pelley. Those stories tonight on 60 minutes. Another day, and im still struggling with my diabetes. I do my best to manage. Your body and your diabetes change over time. Your treatment plan may too. Know your options. Oncedaily toujeo is a longacting insulin from the makers of lantus. It releases slowly to provide consistent insulin levels for a full 24 hours. Toujeo also provides proven full 24hour blood sugar control and significant a1c reduction. 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However, about 35 Insurance Companies have not settled and remain under investigation for not paying when the beneficiary is unaware there was a policy, something that is not at all uncommon. Kevin mccarty the beneficiary never comes forward, because he or she doesnt know the policy exists. Stahl but the companies know, says Kevin Mccarty, the insurance commissioner of florida, who led the National Task force investigating the industry. And the companies dont pay, he says, unless a beneficiary makes a claim. Mccarty and what we found is knowledge in their files that people have died, yet they have neglected to initiate an investigation and pay the claim. Stahl so in other words, life Insurance Companies are failing to pay out death benefits when they know the person is dead, and theyre claiming they dont know. Mccarty in many cases, that has been exactly what we have found. Stahl when you found that, what went on inside you . Mccarty my first instinct was, of course, is unleash the hounds of hell. Lets go after them, and expose them for the unconscionable, indefensible behavior that was going on. Stahl he says some of the policies are worth more than a million dollars. But most are valued at less than 10,000. Joseph bigony morning, joe stahl as a result of the audits, Joseph Bigony of West Virginia recently got a long overdue payment of more than 5,000 from his sisters policy. Administrator of her estate when she died in june of 1990, and we didnt know anything about this at all. Jeff atwater youre talking about millions of policies. Stahl millions . Atwater hundreds of thousands of policies that were dealing with just here in florida. Stahl jeff atwater is the chief Financial Officer of florida in charge of regulating the states Insurance Industry. Atwater you can assume from what we have found that the policies that should have paid out in the 60s, in the 70s, in the 80s, in the 90s were never paid. Stahl and youre saying its part of their plan . Atwater after all weve looked at, lesley, it would be this is not a small dollar amount. These are billions of dollars that now stay in the investment accounts of these Insurance Companies rather than return money to those families. Stahl tell us some of the big names. Atwater it would be all the large brand names that youre familiar with john hancock, metlife, prudential. Many of these companies have sat down with us and made right. Stahl no one disputes that the insurers pay out on policies when the beneficiary files a but says Kevin Mccarty of florida, many of the companies routinely and deliberately disregarded evidence in their own files that the policyholders had died. Unless someone filed a claim, he says, the companies would cancel the policy and keep the death benefit for themselves. Mccarty heres a Life Insurance policy thats issued in florida in january 2002. The insurer died in april of 2008. We actually have in the Insurance Companys file, a copy, a scanned copy, of the death certificate. And the accompanying envelope which displayed the spouses return address. Stahl with the spouses address on it. Mccarty its right here. Stahl let me see. Mccarty less than one month after the death the policy was terminated for nonpayment. Stahl industry lobbyists, like this one at a recent hearing in florida, argue that the burden falls on the beneficiaries. Contracts every day and if you sign that contract, youre obligated to know whats in it. Stahl the Companies Argue that in the policies that these people signed, it says, black and white, that they have to make the claim and show up with a copy or the policy itself. And if they dont do that, we dont have an obligation. Mccarty but florida law says something too. And you have to look at it not just in terms of the contract, but to your responsibilities under the florida insurance code. And im here to say that you have a responsibility to investigate a claim if you know someone has died. And if you have a letter that says youre deceased, you have actual knowledge the person has died. Stahl Insurance Companies are regulated separately by each state and he says similar laws are on the books across the country. You see right there . Stahl state regulators first got wind of the Insurance Industry practice from jim hartley and jeff drubner who run Company Called verus financial. Based on an insider tip in 2006, drubner, employing techniques he had used as an f. B. I. Agent, combed through Insurance Company data and discovered that the insurers were routinely using the Social Security death master file, which is a constantly updated list of people who have died in the United States. What was the significance to you that they were using the death master file for something . Jeff drubner i knew at that point that they knew because if you have stahl they knew who was alive and dead, is what youre saying . Drubner yeah, because they know who theyve insured and if they have a list of everybody thats passed away, i knew that they knew. Stahl what was the next step . Jim hartley the next step was to speak to the states. There wasnt one treasurer, one controller or one attorney general who didnt have a reaction that this shouldnt be allowed to happen and we have to fix it. Stahl drubner went on to discover that most Insurance Companies used the death master advantage to cut off annuity, or retirement payments once the policyholder died. But they didnt then notify the Life Insurance side of the company. Mccarty we have actual cases, lesley, where a policyholder had both an annuity and a life policy. And they terminated the annuity, and of course they knew the person was dead, so they so stahl claimed over here that they didnt know he was dead . Mccarty lesley, when we went in and looked at the memos, the right side told the left side and the other side said stahl and you saw it in the audits . You would just see it mccarty we saw it in the audits. Stahl Something Else they saw in the audits related to whole Life Insurance policies, that in addition to a death benefit build up a cash nest egg, like a 401k. What they found is that when a beneficiary did not come forward, the company continued to pay themselves premiums out of the dead persons nest egg. Instance, the nest egg was drained down more than 9,000 to zero after the person had died. California controller betty yee says that kind of siphoning off was widespread in cases where beneficiaries did not come forward. Betty yee how can you not be outraged by this . Stahl she says that in about a third of the cases, there was evidence of death in the file. Yee here we have a policyholder. Stahl is this the actual file that you saw with the word deceased in large, large unmistakable letters . Yee yes, yes. Deceased with the date of death. Stahl and still they didnt they didnt stop paying themselves. Yee no, no. And you wouldve thought with that kind of indication, a next step would be to confirm that by looking at the death master file and beginning the claims process with the family member. Stahl and they didnt. Yee they didnt. Stahl when the cash was all used up, the companies cancelled the policy. Under the law, theyre allowed to pay themselves premiums using cash while theyre alive. Floridas mccarty says the law was originally intended as a way to protect consumers. Mccarty for instance, if you have a life policy and you lose your job and you cant make your premium payment, they will take some of the cash value thats built up in your policy and pay the premium. Which is great for consumer protection. Stahl but in this situation, after they died. Mccarty i think its tantamount to stealing when you know in your books and records the person is dead and you drain the policy. Now if you think about that, if you would have explained that trying to sell that policy at the beginning stahl at the beginning. Mccarty youre sitting in your kitchen and saying, you know, youve got all these symbols of security and Financial Stability and were going to be there for you with your family in their grief, but they say, oh, by the way. If you stick that policy in a closet, not only are we not going to look for you, but were gonna to take all the cash value in it, and stahl give it back to the company. Mccarty give it back to the company. And leave your beneficiary with nothing. Here, sign here. Stahl the 25 Insurance Companies that have settled with the states admitted no wrongdoing, but agreed to pay out more than 7. 5 billion, either directly to the unpaid beneficiaries or to the states, which then try to find the beneficiaries by phone. We have received some funds from an Insurance Company thats in your name. Stahl or online. Thousands of oklahomans are owed money from Life Insurance policies. Stahl none of the life Insurance Companies we contacted would give us an interview, but speaking on their behalf, the Industry Trade association, the American Council of life insurers, told us quote most life insurers are going well beyond what the law requires to identify policy unclaimed benefits. Ken miller, the treasurer of oklahoma, says there are still about 35 Insurance Companies that have not settled and some are fighting tooth and nail. At stake, he says, is up to 3 billion more in unclaimed benefits nationwide. Whos fighting the hardest . Ken miller kemper is the main one. Stahl kemper, a chicago based Insurance Company, has been pushing for legislation around the country that would bar the states from forcing kemper to go back and search for unpaid beneficiaries. When we called kemper, they referred us to Steve Weisbart of the Insurance Information institute, who says making Companies Like kemper pay now would be unfair. Steve weisbart if we can say, do something today that you didnt expect to do and didnt plan to do and didnt collect money to do 30 years ago, what else can we say today retroactively. Its potentially an open door. Stahl a slippery slope is what youre saying . Weisbart a slippery slope. Stahl kemper has argued in Court Filings that its never used the death master file to identify deceased policyholders and that finding and paying their beneficiaries now would result in a substantial financial loss and require the company to. Substanially alter its business practices. Miller if your model is built upon the fact that youre not going to pay a dead persons loved ones for a policy that theyve completely paid in full, to me thats just a bad policy. Stahl an oklahoma woman, sherry sanders, didnt know about her husbands policy until about a year ago when, because of a settlement, she got a check worth 22,000. We asked oklahoma treasurer miller how much an Insurance Company can make by holding on to the 22,000. Miller well, lesley, now youve hit on something thats and thats the time value of money. Because thats what this is all about. This is about money. That 22,000 invested for 50 years at an 8 return becomes 1. 2 million. Stahl that the company gets because it sat there . Miller and thats just one small policy. If you expand that over all the policies thats just due to my of money, billions and billions of dollars. Stahl the American Council of life insurers says that the industry has paid out more than 600 billion in death benefits over the last ten years, so the companies are doing a good job. Miller i dont think we should pat them on the back for doing what theyre supposed to do. Stahl but the Companies Say that this is only 1 of the Life Insurance policies. Miller then why fight it . If its so inconsequential, if its such a small amount, then why be spending your reputation them . Cbs money watch update sponsored by glor good evening. The i. R. S. Has already processed nearly 105 million tax returns. The deadline to file is the end of monday. A plan to Freeze Oil Production fell apart today after iran skipped a meeting of 18 countries in qatar. And the west coast retailer sports chalet is going out of im jeff glor, cbs news. gasp shark diving xerox personalized employee portals help Companies Make benefits simple and accessible. From anywhere. Hula dancing . Cliff jumping Human Resources can work better. With xerox. Which allergy . Eees. Bees . Eese. Trees . Eese. Xerox helps hospitals use Electronic Health records cheese . Cheese patient care can work better. With xerox. Thats it. Bill whitaker there has been a lot of talk about criminal Justice Reform in america, and it would be hard to find a place Rikers Island, the most important jail in new york city. Located in the middle of the east river, rikers holds about 10,000 inmates. Its a volatile mix. Some have been convicted of minor crimes; but as many as 80 are awaiting trial. Many are there because they cant make bail. And, in a trend that reflects a growing national problem, rikers holds a rising number of mentally ill inmates. The mentally ill now make up more than 40 of the population. Correction officers are not adequately trained to deal with this population. The result is a disturbing pattern of neglect and Excessive Force that is the focus of our story tonight. It has led the u. S. Attorney Preet Bharara to intervene. Preet bharara what you really had, we found was was a culture of violence on top of a code of silence, and that is a deadly combination. Found in a number of cases that we have brought in connection with Rikers Island. Whitaker concerned by those deaths and a stream of alarming reports about Rikers Island, Preet Bharara who is the u. S. Attorney for the Southern District of new york launched a twoyear investigation into the jail complex. Bharara we found in an Alarming Number of cases there was no discipline with respect to officers at all. You had an officer who had dozens of complaints against him and was never disciplined once, or maybe just one time, and thats something that has to change. People have to understand that there are consequences for their actions, not just the inmates, but the the officers as well. Whitaker how long has this been going on . Bharara years and years. Too long. Whitaker rikers is a 400 acre island just off the tarmac of Laguardia Airport in the shadows of manhattan skyscrapers. One bridge leads in and out. Its surrounded by its own moat. The inmate population has come down dramatically from a high of but despite the decrease, city data shows violence has gone up over the last decade. Because of the us attorneys findings, an unusual collaboration was formed. Bharara, the prosecutor, teamed up with plaintiffs lawyers, the Legal Aid Society and private attorney Jonathan Abady in a Class Action Lawsuit on behalf of a dozen rikers inmates. Jonathan abady the number of facial fractures, of traumatic brain injury, of broken bones, of serious physical injury, is just out of control. Whitaker compounding the problems at rikers is that increase in the number of mentally ill inmates. Bharara and that just complicates issues relating to violence and issues relating to care, and issues relating to discipline. So its a problem. Whitaker what was captured on this video, obtained by 60 minutes, helps illustrate what u. S. Attorney bharara is talking about. It has not been seen in public before. Bradley ballard, who was brought to rikers in 2013 on charges of violating parole for an assault conviction. In the video, he was observed twisting his shirt into a phallic symbol and making lewd gestures, and then was taken back to his cell, according to an investigation by the new York State Commission of correction. Abady he was placed in the functional equivalent of solitary confinement. They put him in a cell. They locked the cell. And they basically threw away the key. Whitaker abady represents ballards family in a pending wrongful death suit against the city. The commissions report found that ballard was locked in his cell for six days prior to his death and was denied access to his life supporting Prescription Medications and that day after day, officers, supervisors and clinicians walked by, observed his deteriorating state but failed to help him. After repeated floodings of ballards toilet, a Maintenance Worker turned off the water the report found that ballard was lying in his own waste. Hes spraying deodorizer . Abady yes. The reports are that Corrections Officers were bringing aerosol cans from home because the stench was so bad coming from that cell. Whitaker here, an inmate who delivered a food tray pulled his shirt up over his nose. The report found the videotape indicated ballards cell was grossly unsanitary. Finally, on the sixth day, medical workers were called. According to the report, an officer asked ballard if he could get up on his own. I need help ballard said. Inmate workers carried him out of his cell and put him on a gurney. Records showed ballard went into cardiac arrest soon after. He died hours later. Abady they watched him languish for seven days as he died. And they did nothing. Of torture. They killed him. Whitaker the citys medical examiner declared ballards death a homicide, according to the commission report. It called ballards medical and custodial treatment from the time he entered rikers so incompetent and inadequate as to shock the conscience. The department of correction issued a statement that it adjusted its practices to ensure that a similar tragedy doesnt happen again. But to this day, no criminal charges have been filed against any of the officers, supervisors or Health Workers involved. Its impossible to know if anyone stepped forward. But if they did, it wasnt enough to help Bradley Ballard Norman Seabrook thats inhumane in my opinion. That should never have happened. Whitaker Norman Seabrook is president of the union that represents the correction officers, but not the higher ranking supervisors. We showed him the ballard video. Whos responsible . Seabrook the supervisor. Whitaker what about your officers . Seabrook the officers follow supervisor. Whitaker in another incident captured on surveillance video, inmate Jose Bautista tried to hang himself. He had been arrested on domestic charges and was awaiting trial. He couldnt post the 250 bail. When he jumped up suddenly, officers beat him so severely he suffered a perforated bowel and needed emergency surgery, according to case records. Bautistas case was one of 129 serious injuries over an 11 month period documented in a revealing report by the new York City Department of health and Mental Hygiene that was intended for internal use only, but 60 minutes managed to get a copy. The report found 77 of the injuries involved mentally ill inmates and their injuries were severe enough to require care beyond the capacity of jail medical doctors. Dr. Daniel selling you could take a third of the 77 and say that, okay, it was the inmate needed to be subdued. But 77 is i think tells the story. Its a problem. Whitaker dr. Daniel selling, who is now in private practice, was the executive director of Mental Health at rikers for five years until he left in 2014. Is it fair to say that rikers is a Mental Institution . Selling sure. Its probably one of the largest Mental Institutions in the nation, if not the largest. Whitaker can you tell me about the case of Bradley Ballard . What does that say about how things work on rikers . Selling thats probably the worst case that ive experienced, been a part of. That was a case in which all systems failed. Whitaker selling said the staff of the private medical contractor failed to do the required daily rounds and never informed him about ballards the citys contract with the private medical firm was not renewed. Bradley ballard is not the only mentally ill inmate to have died in custody in recent years. In 2014, u. S. Attorney Preet Bharara filed the first criminal civil rights case in a decade against a rikers officer or supervisor in connection with the poisoning of mentally ill inmate Jason Echevarria, who died after ingesting toxic soap while in solitary confinement. As seen in this video that was entered into evidence, echevarria, a robbery suspect who was also awaiting trial, was escorted to a cell where he swallowed the toxic soap that was given to him for cleaning his cell. His father ramon told us he believes he ate the soap in a desperate effort to get out of solitary confinement. Was screaming, because he was burning up inside. Whitaker hes dying . Echevarria hes dying. Whitaker a few hours later, according to court documents, castro alerted unit supervisor captain Terrence Pendergrass that echevarria needed medical attention. According to castros testimony, captain pendergrass said, dont call me if you have live breathing bodies. Only call me if you need a cell extraction or if you have a dead body. Another correction officer, angel lazarte, testified as to what happened next a Pharmacy Technician on her rounds said echevarria could die. He then approached pendergrass, and pendergrass told him to write an injury report. You can see on the tape, pendergrass then went to look into echevarrias cell himself. He returned and interrupted the writing of the report. Pendergrass led lazarte away from the desk. After they talked, lazarte pocketed the report. According to court records, the report was never filed. Echevarria was discovered dead the next morning. Death a homicide, due to neglect and denial of medical care. Echevarria he saw him. He was he was in pain and everything. Why couldnt you just call an ambulance for him . Okay, hes a prisoner, hes an inmate. Hes a human being. Hes a human being. Bharara it both breaks your heart and it makes your blood boil, because youre thinking to yourself, heres somebody who had responsibility for making sure that peace was enforced, but also responsible for the safety and protection of those under his charge. Whitaker and that report was never filed. Bharara one of the conclusions we found in our investigation was that in case, after case, after case, sometimes you would have individuals who would witness things and they would get together and they would coach each other into what the response should be, which makes it very difficult to hold anyone accountable. Whitaker that culture youre describing seemed so entrenched that the officers felt almost comfortable behaving like that im just what what does that say to you about that culture . Bharar yeah. It says that the culture is broken. It says that the institution is broken. Whitaker captain pendergrass was convicted in december 2014. A jury found that pendergrass violated Jason Echevarrias Constitutional Rights by deliberately ignoring his pleas for help and depriving him of Urgent Medical care, leaving echevarria to die alone in his cell. Pendergrass was sentenced to five years in prison. Officers castro and lazarte have since been fired. Union president Norman Seabrook said his officers dont have the training to deal with mentally ill inmates like Jason Echevarria and Bradley Ballard. Your men are not trained seabrook and women. No, theyre not trained. Whitaker your men and women are not trained to deal with Mental Illness . Seabrook not at all. Whitaker we asked Norman Seabrook about the internal report showing the vast majority of Excessive Force cases involving mentally ill inmates. Seabrook at the end of the why didnt these individuals receive their medication, so they wouldnt attack a correction officer . If youre talking about an inmate that has a Mental Health problem, then certainly something set this person off. Whitaker seabrook says its not just an issue of the mentally ill. Rikers is a dangerous place, and many of his officers are assaulted every year. Seabrook wanted to show us the conditions his officers have to contend with. But when he took us out to rikers, department of correction staffers stopped us from going inside with our cameras to see the problems seabrook is talking about. This is as far as we got, Walking Around the perimeter of one of the buildings with him. We wanted to talk to the commissioner of the Correction Department about the problems at rikers, but our three scheduled interviews all were postponed. The city recently initiated a number of policy changes, like installing more cameras and reducing the use of solitary confinement. Implemented. U. S. Attorney bharara is going to hold the city to it. Is there a decrease in violence . Bharara you know, it it remains to be seen how much that decrease will be over time. I think the training will take some time and is happening as we speak. Whitaker its taken some time to build up this culture of violence. Bharara yes, it has. Whitaker how long do you think it will take to unravel it . Bharara i im not gonna put a clock on it, but i will say that were were impatient people, and we like to see results, thats why we got involved in the first place. Te is brought to you by ford. At the rbc heritage in hilton head island, south carolina, south african brandon grace shot a final round 66 to win the tournament by two over luke donald and russell knox. Nba playoff action, lebron james and kyrie irving score more than 20 as the cavs won game one against the pistons. For more sports news and cbssports. Com. Jim nantz reporting from south carolina. To get into a new ford explorer. Explorers terrain Management System easily handles changing road conditions. 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Tell your doctor if youve been to areas where certain fungal infections are common, and if youve had tb, hepatitis b, are prone to infections, or have flulike symptoms or sores. Dont start humira if you have an infection. Raise your expectations. Ask your gastroenterologist about humira. With humira, control is possible. Man dear mr. Danoff, my wife and i are now participating in your mutual fund. We invested in your fund to help us pay for a College Education for our son. Weve enclosed a picture of our son so that you can get a sense there are real people out here trusting you with their hardearned money. At fidelity, we dont just manage money, Sharyn Alfonsi a lot of modern life is interconnected through the internet of things, a global empire of billions of devices and machines. Automobile navigation systems. Smart t. V. s. Thermostats. Telephone networks. Home security systems. Online banking. Almost everything you can imagine is linked to the world wide web. And the emperor of it all is the smartphone. Youve probably been warned to be careful about what you say you see what we found, you wont need to be warned again. We heard we could find some of the worlds best hackers in germany. So we headed for berlin. Just off a trendy street and through this alley, we rang the bell at the door of a former factory. Karsten nohl hi im karsten. Alfonsi thats where we met karsten nohl. Come on in. Alfonsi a german hacker with a doctorate in Computer Engineering from the university of virginia. You can lead the way. We were invited for a rare look at the inner workings of Security Research labs. During the day, the lab advises fortune 500 companies on computer security. But at night, this international in the devices we use everyday smartphones, usb sticks and sim cards. They are trying to find vulnerabilities before the bad guys do, so they can warn the public about risks. At computer terminals and work benches equipped with micro lasers, they physically and digitally break into systems and devices. Nohl hang up. Alfonsi now, nohls team is probing the security of mobile phone networks. Is one phone more secure than another . Is an iphone more secure than an android . Nohl all phones are the same. Alfonsi if you just have somebodys phone number, what could you do . Nohl track their whereabouts, know where where they go for work, which other people they meet when you can spy on whom they call and what they say over the phone. And you can read their texts. Alfonsi we wanted to see whether nohls group could actually do what they claimed. So we sent an offtheshelf york to representative ted lieu, a congressman from california. He has a Computer Science degree from stanford and is a member of the House Committee that oversees information technology. He agreed to use our phone to talk to his staff knowing they would be hacked. And they were. All we gave nohl was the number of the 60 minutes iphone that we lent the congressman. Alfonsi hello congressman . Its Sharyn Alfonsi from 60 minutes. As soon as i called congressman lieu on his phone good. How are you doing . Nohl and his team were listening and recording both ends of our conversation. Im calling from berlin. I wonder if i might talk to you about this hacking story were working on. Nohl what hacking story . Alfonsi they were able to do it by exploiting a security flaw they discovered in signaling system seven, or ss7. It is a littleknown, but vital Global Network that connects phone carriers. For helping us. Every person with a cell phone needs ss7 to call or text each other. Though most of us have never heard of it. Nohl says attacks on cell phones are growing as the number of mobile devices explodes. But ss7 is not the way most hackers break into your phone. Those hacks are on display in las vegas. John hering three days of nonstop hacking. Alfonsi thats where john hering guided us through the Unconventional Convention where 20,000 hackers get together every year to share secrets and test their skills. Hering its proving whats possible. Any system can be broken. Its just about knowing how to break it. Alfonsi hering is a hacker himself. Hes the thirtysomething whiz who cofounded the mobile Security Company lookout when he was 23. Lookout has developed a free app that scans your mobile phone for malware and alerts the user to how likely is it that somebodys phone has been hacked . Hering in todays world, theres really only two types of companies or two types of people which are those who have been hacked and realize it and those who have been hacked and havent. Alfonsi how much do you think people have been kind of ignoring the security of their cell phones, thinking, ive got a passcode, i must be fine . Hering i think that most people have not really thought about their phones as computers. And that thats really starting to shift. Alfonsi and thats what you think . Its like having a laptop now . Hering oh absolutely. I mean, your mobile phone is effectively a supercomputer in your pocket. Theres more technology in your mobile phone than was in, you know, the space craft that took man to the moon. I mean, its its really unbelievable. Alfonsi is everything hackable . Hering yes. Alfonsi everything . Hering yes. Alfonsi if somebody tells you, you cant do it. Hering i dont believe it. Alfonsi john hering offered to prove it. So he gathered a group of ace hackers at our las vegas hotel. Each of them a specialist in cracking mobile devices and them. Adam laurie would you put your money in a bank that didnt test their locks on their safes . We need to try and break it to make sure that the bad guys cant. Alfonsi how easy is it to break the phone right now . John oberheide very easy. Laurie as youve seen, pretty trivial. Alfonsi do i need to connect to it . Okay. It started when we logged onto the hotel wifi. At least it looked like the hotel wifi. Hering had created a ghost version. Its called spoofing. I mean, this looks legitimate. Hering it looks very legitimate. So youre connected . Alfonsi i am. Hering and i have your email. laughs alfonsi you have access to my email right now hering yeah. Its coming through right now. I actually can s i know have a ridesharing application up here, all the information thats being transmitted, including your account i. D. , your mobile phone, which i just got the mobile number. Then more importantly, i have all the credit cards associated with that account. Alfonsi Jon Oberheide pointed out the greatest human nature. Jon oberheide with social engineering, you cant really fix the human element. Humans are gullible. They install malicious applications. They give up their passwords every day. And its really hard to fix that human element. Alfonsi john hering warned us he could spy on anyone through their own phone as long as the phones camera had a clear view. We propped up the a phone on my desk and set up cameras to record a demonstration. First he sent a text message with an attachment to download. Hering were in business. Alfonsi then hering called from san francisco. desk phone rings and proved the hack worked. Hering i installed some malware in your device thats broadcasting video of your phone. Alfonsi my phones not even lit up. Hering i understand, yeah. Alfonsi thats so creepy. Katie its pitch black for us. Alfonsi in this case, when i downloaded the attachment, hering was able to take control of my phone. To do anything to get attacked. All karsten nohls team in congressmans phone was the number. Global phone network we told you about earlier . Nohl ive been tracking the congreeman. Alfonsi theres a flaw in it that allowed nohl to intercept and record the congressmans calls and track his movements in washington and back home. Nohl the congressman has been in california, more specifically the l. A. Area. Zoom in here a little bit, torrance. Alfonsi the ss7 network is the heart of the worldwide mobile phone system. Phone Companies Use ss7 to Exchange Billing information. Billions of calls and Text Messages travel through its arteries daily. It is also the network that allows phones to roam. Are you able to track his movements even if he moves the Location Services and turns that off . Nohl yes. The mobile network independent from the little g. P. S. Chip in so any choices that a congressman couldve made, choosing a phone, choosing a pin number, installing or not installing certain apps, have no influence over what we are showing because this is targeting the mobile network. That of course, is not controlled by any one customer. Alfonsi despite him making good choices. Youre still able to get to his phone. Nohl exactly. Alfonsi karsten nohl and his team were legally granted access to ss7 by several International Cell phone carriers. In exchange, the carriers wanted nohl to test the Networks Vulnerability to attack. Thats because criminals have proven they can get into ss7. Nohl mobile networks are the only place in which this problem can be solved. There is no global policing of ss7. Each mobile network has to move to protect their customers on their networks. And that is hard. Us some u. S. Carriers are easier to access through ss7 than others. 60 minutes contacted the cellular phone trade association to ask about attacks on the ss7 network. They acknowledged there have been reports of Security Breaches abroad, but assured us that all u. S. Cell phone networks were secure. Congressman lieu was on a u. S. Network using the phone we lent him when he was part of our hacking demonstration from berlin. I just want to play for you something we were able to capture off of your phone. Hi ted its marc, how are you . Representative lieu im good. I sent you some revisions on the letter to the n. S. A. , regarding the the data collection. Representative lieu wow. Alfonsi what is your reaction to knowing that they were listening to all of your calls . Representative lieu i have two. First, its really creepy. And second, it makes me angry. Alfonsi makes you angry, why . Representative lieu they could hear any call of pretty much anyone who has a it could be stock trades you want someone to execute. It could be calls with a bank. Alfonsi karsten nohls team automatically logged the numbers of every phone that called congressman lieu. Which means, theres a lot more damage that could be done than just intercepting that one phone call. A malicous hacker would be able to target and attack every one of the other phones too. So give us an idea, without being too specific, of the types of people that would be in a congressmans phone. Representative lieu there are other members of congress, other elected officials. Last year, the president of the United States called me on my cell phone. And we discussed some issues. So if the hackers were listening in, they would know that phone conversation. And thats immensely troubling. Alfonsi nohl told us the ss7 flaw is a significant risk, mostly to political leaders and Business Executives whose private communications could be the ability to intercept cell phone calls through the ss7 network is an open secret among the worlds intelligence agencies, including ours, and they dont necessarily want that hole plugged. If you end up hearing from the intelligence agencies that this flaw is extremely valuable to them and to the information that theyre able to get from it, what would you say to that . Representative lieu that the people who knew about this flaw and saying that should be fired. Alfonsi should be fired . Representative lieu absolutely. Alfonsi why . Representative lieu you cannot have 300some million americans and really, right, the global citizenry be at risk of having their phone conversations intercepted with a known flaw, simply because some intelligence agencies might get some data. That is not acceptable. Hering id say, that the average person is not going to be exposed to the type of attacks we showed you today. Our goal was to show whats possible. So people can really understand if we dont address security issues, what the state of the alfonsi which will be what . Hering we live in a world where we cant trust the technology that we use. How your phone could be hacked when a stranger bumps into you. Go to 60minutesovertime. Com, sponsored by lyrica. Before fibromyalgia, i was active. I was energetic. Then the chronic, widespread pain drained my energy. 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Dont take entresto with an ace inhibitor or aliskiren. Dont take entresto. The most serious side effects are angioedema, low blood pressure. Kidney problems, or high potassium in your blood. Tomorrow, tomorrow i love ya, tomorrow. Ask your heart doctor about entresto. And help make tomorrow possible. Previously on madam secretary. Henry im offering you a chance to save your sisters life. Oh, my god. You, you are asking me to be a spy. You know what they do to spies in russia . Please, get me out henry im taking care of it. Now, hang up the damn phone. There he is