But in 2000, Congress Gave wall street an exemption thats turned out to be a very bad idea. Its legalized gambling. It was illegal gambling, and we made it legal gambling. With no regulatory controls. With absolutely no regulatory controls. Zero, as far as i can tell. I mean, it sounds a little like a bookie operation. Yes. [watch ticking] i dont to die. I shouldnt have to die. Helen sharp, suffering from lymphoma, just got the letter that says her county hospital is cutting charity care to Cancer Patients. Its a symptom of the recession Public Hospitals forced to cut Vital Services just when people need them the most. When you read this letter, what did you think it meant to you . A death sentence. Welcome to 60 minutes on cnbc. Im steve kroft. In this episode well meet some big winners and some big losers in the high stakes game of world finance. Up first, the secret vaults of geneva and zurich, which have served as repositories for the wealth of dictators and despots, mobsters and arms dealers, corrupt officials and tax cheats of all kinds. Its a world u. S. Law enforcement has rarely been able to penetrate. So the idea the ubs, one of switzerlands largest banks, would agree to turn over information on thousands of american tax cheats would have once been unthinkable. But it happened in part because of a whistleblower who i sat down with in 2010. For his efforts hes been rewarded with a federal prison term and the possibility of endless riches. Though he was born and raised in the boston area, Bradley Birkenfeld spent most of the last decade living in switzerland, helping wealthy americans hide their money. He was based in geneva, where he says there may be more moneycounting machines than parking meters, in a country that once bragged it had more banks than dentists. Its not swiss money in those banks. Its foreigners. You have a culture there that has been ingrained in society about managing peoples money, protected by swiss bank secrecy. And who has a right to that information under swiss law . Only the banker and the bank itself. How unusual is it for a swiss banker to come forward and say, this is how it works . Its never happened before in history. Im the first one. When birkenfeld, a midlevel banker with an undistinguished employment history, knocked on the door of the u. S. Justice department in the spring of 2007, he touched off an investigation that would threaten one of the Worlds Largest banks with extinction and shake 300 years of Swiss Banking secrecy to the foundations of its underground vaults. He did it by providing inside information and documentation that his former employer, banking giant ubs, was actively involved in helping its american clients defraud the u. S. Treasury out of billions of dollars in unpaid taxes. What do you think was most valuable thing that you gave to the u. S. Government . The amount of clients and the amount of assets managed by ubs in the United States out of switzerland. And that was how much . That was 19,000 clients and around 20 billion swiss francs, which is about 19 billion. Of the percentage of american accounts that you represented, how many would you say were trying to evade taxes . My own clients . Mmhmm. I would say about 90 . Did people tell you this was their intention when they opened an account . It was the unwritten rule. You didnt have to discuss it. People wouldnt fly all the way to switzerland to open accounts just because they wanted to declare their money. And as a private banker for ubs, birkenfeld would help his clients invest, spend, and move their money. One example he told us about involved withdrawing cash from a customers account, buying some diamonds in geneva, and then smuggling them into the u. S. For the client inside a toothpaste tube. Birkenfeld claimed it was legal, because the diamonds, he said, were worth less than 10,000 and didnt have to be declared at customs. If it was legal, why did you put them in a toothpaste tube . Thats why im having trouble with that. Oh, it was just a way of carrying them so i wouldnt lose them. Where would you put two diamonds . I think id put them in a money belt or i think id put them in a case. It was a onetime event. Thats not my business. I just put them in a toothpaste tube. You werent trying to hide them from customs . No, not at all. Buying diamonds and other valuables is just one way of hiding and transporting assets, and birkenfeld insists that he was just providing a service to his clients, which is what Swiss Banking is all about. People would ask you to make purchases for them, possibly maybe a car or a chalet, possibly a nice watch. So you would also cater to the client in that regard and then deliver it to them upon their choosing. And what would be their choosing . It could be in their hotel room. It could be in maybe another country. Could be there in geneva. So you were sort of not just a banker but also a personal shopper . If you will, at a concierge level. Birkenfeld claims his motives in going to the Justice Department were mostly altruistic. He offered to wear a wire to gather evidence against highlevel ubs executives in exchange for full immunity for his transgressions, but the negotiations broke down. And birkenfeld neglected to tell them about his dealings with this man, california Real Estate Developer igor olenicoff, who was his biggest client. Birkenfeld helped olenicoff hide 200 million by introducing him to a consultant who specialized in creating Shell Companies and sham entities that concealed the ownership of the ubs accounts. I dont sign peoples tax return, so what they do with their taxes is not my business. Im a banker. So you would steer them to somebody who would help them hide their money . I would them to these service providers. Thats correct. You must have known deep down that it was illegal. When you came into the u. S. You felt uncomfortable. Thats correct. But as a gesture of good will, birkenfeld did give the Justice Department, senate investigators, irs agents, and the s. E. C. Lots of information about ubs and its secret activities. Any transaction that happened on an account was held deep in the vault and sealed until the client came to pick it up personally. Then they would either take it with them, which was generally not the case, or they would tell you to shred it, which we would do on behalf of the client. People didnt have online accounts. It was forbidden. Ebanking was forbidden. They didnt get statements in the mail. No. So if somebody wanted to know how much money they had in the bank and how their investments were doing, they had to go to switzerland . Or maybe see their banker when they came to the u. S. It was those visits to the u. S. Which birkenfeld told the government about that ultimately got ubs in so much trouble. The bank would sponsor lavish events like yacht races in newport and the art basel modern art festival in miami beach to attract wealthy americans. Then it flew in its bankers from switzerland to mingle and to try and drum up new clients and conduct business with existing ones. Because the swiss bankers werent licensed to conduct business in the United States, it was a clear violation of American Banking laws on u. S. Soil, and birkenfeld provided internal documents that proved the length that ubs would go to in order to avoid detection. Call it a vacation rather than a business trip. Rather than saying, oh, yes, im coming to see my private clients here in the United States. And im coming in from zurich, switzerland. Did you bring records into the country with you when you came in . Generally, no. I did not. My colleagues brought in encrypted laptops. Encrypted laptops. Yes, so that even if they were discovered, you couldnt see what was inside the computers, which were portfolios of the clients, and they were Product Offerings for the clients. [watch ticking] up next, Bradley Birkenfeld pays a price after going to the government. I gave them the biggest tax fraud case in the world. I exposed 19,000 international criminals. And im going to jail for that . The day he walks into prison is the day you will lose a generation of tax whistleblowers. When 60 minutes on cnbc returns. [watch ticking] every day were working to be an Even Better Company and to keep our commitments. And weve made a big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. Thomas perrelli, the associate attorney general of the United States, says Bradley Birkenfeld was not the only person who provided valuable information to the investigation of ubs. But he says his evidence that executives encouraged illegal behavior was the banks achilles heel. They were going out of their way to cover their tracks. They would bring checks or sometimes they would actually carry money from one client to the next, all with the purpose of disguising and avoiding detection of large transfers of money. What did that information tell you . It was certainly surprising that there would be a unit within a major bank that would be behaving in that way. And there was . And there was. And we subsequently learned that senior officials knew about this. They knew it was wrong. They called it toxic waste. But it was very profitable, and they didnt stop doing it. Based on information provided by birkenfeld, the Justice Department and the irs obtained a court order demanding that ubs turn over records on the 19,000 americans believed to have secret swiss accounts. Ubs then enlisted the help of the swiss government to try and negotiate a settlement, finally agreeing to pay a 780 million fine, cease its offshore banking activities with americans, and for the first time in history, turn over the names of more than 4,000 u. S. Citizens suspected of tax fraud. I think they knew we had a very strong case. Right, and they did that because the u. S. Government said that, if you dont cooperate, were going to take away your license to do business in the United States. Well, we certainly told them that we had a strong case for criminal prosecution, and that if we couldnt find another way to resolved that, that thats where this was headed. Ubs realized that the Justice Department was holding all the cards. It had a major presence in the u. S. And 30,000 employees here. And it could not survive as a Global Banking power without access to the u. S. Market. If you had such a strong case, why didnt you get the names and numbers of every american account holder in switzerland . We got the accounts that really are the core of the fraud, the largest accounts, the accounts that are most clearly, likely to be associated with fraud. After the scandal broke, nervous clients withdrew 160 billion from ubs Wealth Management operation. And 14,700 americans notified the irs that they had offshore bank accounts, taking advantage of a program that allows them to pay back taxes and penalties and escape prosecution, which should provide a windfall for the u. S. Treasury. How much in tax revenue do you think you will have gained from this . Ive heard, certainly, the commissioner of the irs say in the billions of dollars. Is it the end of the Swiss Banking system as it used to be . I dont think its the end of the Swiss Banking system. But i think we are moving into an era where countries will be able to get more information to enforce their tax laws, and it will be fair for all americans, because most americans know how to pay their taxes and do it every single year. And the unfairness is people who hide their money overseas and avoid paying taxes. With the government claiming victory and ubs breathing a sigh of relief, the only person with grounds to be really unhappy is Bradley Birkenfeld, who the last time we saw him, was wearing an electronic ankle bracelet. And the federal government had restricted his movements to the commonwealth of massachusetts. I gave them the biggest tax fraud case in the world. I exposed 19,000 international criminals. And im going to jail for that . As it turns out, while the u. S. Government was using birkenfelds information to go after ubs, the Justice Department was closing in on his biggest client, igor olenicoff, for tax evasion. Olenicoff cooperated with the investigation and paid 52 million in fines and back taxes and got off with no jail time. But because birkenfeld hadnt prosecutors told about his relationship with olenicoff, birkenfeld was arrested and charged with conspiracy to commit tax fraud. He pled guilty and was sentenced to 40 months in prison. And he was not happy about it. And you think that you should not be going to jail . I think i shouldnt. Even though you violated the law, and you were an enabler. I mean, you were the person who were implementing these policies. And im the only one going to prison out of 19,000 accounts, and no swiss bankers. Did your investigators believe that birkenfeld was telling them everything he knew . We were certain that he wasnt telling us everything that he knew. In fact, he told us that it wasnt everything that he knew. And at his sentencing hearing, his lawyer admitted that he wasnt forthcoming with us. And in particular, he didnt tell us about his own involvement at all. If he had come forward and told us everything he knew, a complete and accurate picture, in the summer of 2007, we think its likely he wouldnt have been prosecuted. Mr. Birkenfeld says the federal government admits that the prosecution would not have been successful without his participation in this. And yet, he is the only one that is going to jail. Is that fair . It is not uncommon for someone to engage in criminal activity and to provide us information, but to also go to jail. The day he walks into prison is the day you will lose a generation of tax whistleblowers. Why do you say that . Because no one will blow the whistle. Steven kohn is one of birkenfelds civil attorneys and the head of the National Whistleblowers center. He believes there may be one final twist in the case that could give his client the last laugh. Thats because birkenfeld may well be entitled to collect tens of millions of dollars under a federal law that rewards whistle blowers with up to 30 percent of the money that is recovered as a result of the information they provide, even if they end up going to jail. Mr. Birkenfeld has saved the taxpayers billions of dollars, brought thousands of people to justice. They should blow up his check. The attorney general should shake his hand and look into the camera. And he should say, i want a message to every International Banker that works to money launder against america. You come here to america. Youll be protected, and youll be rewarded. Get 20, get 30 birkenfelds. Lets fix this problem. Lets lower everybodys taxes. The irs will ultimately decide whether birkenfeld qualifies for the reward. If he does, they may have to mail the check to federal prison, where birkenfeld is now serving time. But it couldnt be worse than returning to switzerland, where he is regarded by as a criminal and a traitor. Do you think youll ever return to switzerland again . I dont believe i will. In 2011, federal officials had more than 150 people under criminal investigation in connection with the ubs case. But as of early 2011, no one had received more prison time than Bradley Birkenfeld, who has petitioned president obama for clemency. When we return, american banks get legal permission to enter a high stakes, highly risky form of gambling, one that helped push the nation to the brink of financial collapse. [watch ticking] huh. Fifteen minutes could save you fifteen percent or more on car insurance. Mmmhmmm. Everybody knows that. Well, did you know that old macdonald was a really bad speller . Your word is. Cow. Cow. Cow. C. O. W. E. I. E. I. O. [buzzer] dangnabbit. Geico. Fifteen minutes could save you. Well, you know. Vo traveling you definitely end up meeting a lot more people but a friend under water is something completely different. I met a turtle friend today so, you dont get that very often. It seemed like it was more than happy to have us in his home. So beautiful. Avo more travel. More options. More personal. Whatever youre looking for expedia has more ways to help you find yours. [watch ticking] the Great Recession was in part ignited by the collapse of the Housing Market in the u. S. And intensified worldwide by the sale of complicated investments that warren buffet once labeled financial weapons of mass destruction. Theyre called Credit Derivatives or credit default swaps, and as we first reported in 2008, theyre essentially side bets on the performance of u. S. Mortgage markets and some of the biggest Financial Institutions in the world, a form of legalized gambling that allows you to wager on financial outcomes without ever having to actually buy the stocks and the bonds and the mortgages. It would have been illegal during most of the 20th century under the gaming laws. But in 2000, Congress Gave wall street an exemption, and it turned out to be a very bad idea. The term derivative is almost becoming a household word. The cats kind of out the bag here. This is not the american dream. Its an american nightmare. While congress and the rest of the country scratched their heads trying to figure out how we got into this mess, we decided to go to frank partnoy, a law professor at the university of san diego who has written a couple of books on the subject. Can you explain to me what a derivative is . Yes, a derivative is a financial instrument whose value is based on something else. Its basically a side bet. Think of it for a moment as a football game. Every week, the new york giants take the field with hopes of getting back to the super bowl. If they do, they will get more money and glory for the team and its owners. They have a direct investment in the game. But the people in the stands may also have a financial stake in the outcome in the form of a bet with a friend or a bookie. We could call that a derivative. Its a side bet. We dont own the teams, but we have a bet based on the outcome. And a lot of derivatives are bets based on the outcome of games of a sort. Not football games, but games in the markets. Whether Interest Rates are going to go up or down . Yes, and the new bet that arose over the last several years is a bet based on whether people will default on their mortgages. And that was the bet that blew up wall street. The tnt was the collapse of the Housing Market and the failure of complicated Mortgage Securities that the big investment houses created and sold around the world. [electronic noises] but the rocket fuel was the trillions of dollars in side bets on those Mortgage Securities called credit default swaps. They were essentially private insurance contracts that paid off if the investment went bad, but you didnt have to actually own the investment to collect on the insurance. If i thought certain Mortgage Securities were going to fail, i could go out and buy insurance on them without actually owning them . Yeah, the irony is, though, youre not really buying insurance at that point. Youre just placing a bet. Eric dinallo is the insurance superintendent for the state of new york. He says that credit default swaps were totally unregulated and the big banks and investment houses that sold them didnt have to set aside any money to cover their potential losses and pay off their bets. As the market began to seize up and as the market for the underlying obligations began to perform poorly, everybody wanted to get paid, had a right to get paid on those credit default swaps. And there was no there there. There was no money behind the commitments. And people came up short. And so thats to a large extent what happened to bear sterns, lehman brothers, and the Holding Company of aig. In other words, three of the nations largest Financial Institutions had made more bad bets than they could afford to pay off. Bear stearns was sold to j. P. Morgan for pennies on the dollar. Lehman brothers was allowed to go belly up, and aig, considered too big to let fail, is on life support, thanks to a 123 billion investment by u. S. Taxpayers. Its legalized gambling. Its legalized gambling. It was illegal gambling. And we made it legal gambling. With no regulatory controls. With absolutely no regulatory controls. Zero, as far as i can tell. I mean, it sounds a little like a bookie operation. Yes, and it used to be illegal. It was very illegal 100 years ago. In the early part of the 20th century, the streets of new york and other large cities were lined with gaming establishments called bucket shops, where people could place wagers on whether the price of stocks would go up or down without actually buying them. This unfettered speculation contributed to the panic and stock market crash of 1907, and state laws all over the country were enacted to ban them. Big headlines, huge type. This is the front page of the new york times. No bucket shops for new law to hit. So theyd already closed up, cause the law was coming. Heres a picture of one of them. And they were like parlors. See . Betting parlors. Betting parlors, yeah. It was a felony. Well, it was a felony when a law came into effect, because it had brought down the market in 1907. And they said, were not gonna let this happen again. And then 100 years later in 2000, we rolled them all back. A bill to reauthorize and amend the Commodity Exchange act to promote. The vehicle for doing this was an obscure but critical piece of federal legislation called the commodity futures modernization act of 2000. And the bill was a big favorite of the financial industry it would eventually help destroy. It not only removed derivatives and credit default swaps from the purview of federal oversight; on page 262 of the legislation, congress preempted the states from enforcing existing gambling and bucket shop laws against wall street. It makes it sound like they knew it was illegal. I would agree. They did know it was illegal, or they knew it was prosecutable. [watch ticking] some people strike it rich after the law passes. I know people personally who have taken away more than 1 billion from having been on the right side of these transactions. When 60 minutes on cnbc continues. [watch ticking] at farmers we make you smarter about insurance, because what you dont know can hurt you. What if you didnt know that its smart to replace washingmachine hoses every five years . What if you didnt know that you might need extra coverage for more expensive items . And what if you didnt know that teen drivers are four times more likely to get into an accident . sup the more you know, the better you can plan for whats ahead. Talk to farmers and get smarter about your insurance. We are farmers bum pa dum, bum bum bum bum hey, the new guy is loaded with protein really . 25 grams of protein. What do we have . All four of us, together . 24. Hes low fat, too, and has 5 grams of sugars. Ill believe it when i [ both ] oooooh. Whats shakin . [ female announcer ] as you get older, protein is an important part of staying active and strong. Ensure high protein. Fifty percent of your daily value of protein. Low fat and five grams of sugars. See . Hes a good egg. [ major nutrition ] ensure high protein. Ensure nutrition in charge in retrospect, giving wall street immunity from state gambling laws and legalizing activity that had been banned for most of the 20th century should have given lawmakers pause, but on the last day and the last vote of the lame duck 106th congress, wall street got what it wanted. The Senate Passed the bill unanimously. The Senate Stands adjourned sine die. There was an awful lot of, trust us. Leave it alone. We can do it better than government, without any realistic understanding of the dangers involved. Columbia University Law professor Harvey Goldschmid is a former commissioner and general counsel of the securities and exchange commission. He says passed at the height of wall street and washingtons love affair with deregulation, an infatuation that was endorsed by president clinton at the white house and encouraged by Federal Reserve chairman Alan Greenspan. That was the wildest and silliest period, in many ways. Now, again, thats with hindsight because the argument at the time was, these are grownups. Theyre institutions with a great deal of money. Government will only get in the way. Fears it will be taken overseas. Leave it alone. But it was a wrongheaded argument and turned out to be, of course, extraordinarily unwise. What role did Alan Greenspan play in all of this . Well, he made clear in his public speeches and book that a libertarian drive was part of the way he looked at the world. Hes a very talented man. But that didnt take us where we had to be. He wasanother former commissioner told us, hard to argue with at that point. Alan was most powerful man in washington, in a real sense. Certainly a rival to the president and had enormous influence on capitol hill. And he was at the height of his power. He was at the height of his power. Within eight years, unregulated derivatives and swaps helped produce the Largest Financial Services economy the United States has ever had. Estimates of the market for credit default swaps grew from 100 billion to more than 50 trillion, and you could bet on m the solvency olocal communitaf general motors. They also helped produce a huge transfer of private wealth to wall street traders and investment bankers, who collected billions of dollars in bonuses. A lot of the money was made financing what seemed to be a neverending housing boom, selling Mortgage Securities they thought were safe and credit default swaps they believed would never have to be paid off. The credit default swaps was the key of what went wrong and whats created these enormous losses. Is it your impression that people at the big wall Street Investment houses knew what was going on and knew the kind of risks that they were exposed to . No, my impression is to the contrary, that even at senior levels they only vaguely understood the risks. They only vaguely followed what was going on. And when it tumbled, there was some genuine surprise not only at the board level where there wasnt enough oversight but at Senior Management level. They didnt know what was going on in part because credit default swaps were totally unregulated. No one knew how many there were or who owned them. And there was no Central Exchange or Clearing House to keep track of all the bets and to hold the money to make sure they got paid off. Eventually, savvy investors figured out that the cheapest, most effective way to bet against the entire Housing Market was to buy credit defaults swaps, in effect taking out inexpensive insurance policies that would pay off big when other peoples Mortgage Investments went south. I know people personally who have taken away more than 1 billion from having been on the right side of these transactions. Jim grant is the publisher of grants Interest Rate observer and one of the countrys foremost experts on credit markets. If you can and you could lay down cents on the dollar to place a bet on the solvency of wall street, for example, as some did, when wall street became evidently insolvent, that cents on the dollar bet went up 30, 40, and 50 fold. Not everyone who did that wants to get his name in the paper. But there are some spectacularly rich people who came out of this. Who got richer. Who got richer, who became, you know, fantastically richer. A lot of them were hedge fund managers. John paulsons Credit Opportunities fund returned almost 600 in 2007, with paulson pocketing a reported 3. 7 billion. Bill ackman of Pershing Square Capital Management said he plans to make hundreds of millions. Both declined our request for an interview. It is a betting game, folks. Its a betting game. Congress now seemed shocked and outraged by the consequences of its decision eight years ago to effectively deregulate swaps and derivatives. This is casino capitalism. Thats what it is. Its casino capitalism. And various members of the house and senate have hauled in the usual suspects to accept or share the blame. Were you wrong . Credit default swaps, i think, have Serious Problems associated with them. It appears to be the first step in a long process of restoring at least some of the regulations and safeguards that might have prevented or at least mitigated this disaster after the damage has already been done. Where do we go from here . We need the most dramatic rethinking of the regulatory scheme for Financial Markets since the new deal. If anything has demonstrated that imperative, its the economy right now and the tragic circumstances were in. How much danger is still out there, do you think . We dont know. Part of the problem of the lack of transparency in these markets has been we dont really know. The financial reform law passed by congress in the summer of 2010 did take aim at derivatives. Most standard derivatives must be traded on open exchanges with more transparent pricing. And banks can no longer trade in the riskiest default swaps. They have to spin those off to trading desks to prevent them from endangering the rest of the bank. [watch ticking] up next, some extremely vulnerable victims of the Great Recession. How can you do this to Cancer Patients . Theyre dying. If we dont provide them care, their outcome is guaranteed. Theyre going to die. 60 minutes on cnbc returns. [watch ticking] n every day were working to be an Even Better Company and to keep our commitments. And weve made a big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. [watch ticking] las vegas was one of the communities hardest hit by the Great Recession. But it wasnt Just Real Estate and employment that was affected. As scott pelley found in 2009, thousands of patients who were being treated at the only Public Hospital in nevada were stunned to find out that its Outpatient Clinic for chemotherapy was closing. Like many of the charity patients, helen sharp had no idea at the time why a crash on wall street was threatening her life. I dont want to die. I shouldnt have to die. This is a county hospital. This is for people that, like me, many people have lost their insurance, have not any other resources. I mean, i was a responsible person. I bought my house. I put money away. I raised my two children. And now i have nothing. You know, my house isnt worth anything. I have no money. And i said, what do i do . But what do all these other people do after me . And they said, we dont know. 63yearold helen sharp has been fighting lymphoma since july. Shes not working because of her illness and has no insurance. Last year, she received charity care at the county hospital, University Medical center. And she was one of 2,000 patients who got this letter. Dear patient, we regret to inform you that the Nevada Cancer Institute will no longer provide contract Oncology Services at University Medical center. Since december 31st, no chemotherapy for new outpatients. When you read this letter, what did you think it meant to you . A death sentence. [helicopter blades thudding] University Medical center is the safety net for two million people. Vegas bets its life on it. Umc is a teaching hospital, the only fully equipped trauma center, the only burn unit, the only transplant unit, and the primary source of charity care in a city that has fallen on the hardest times it has ever seen. Kathy silver signed that letter. Shes the hospitals ceo. Obviously, our gaming and tourism is tanking. The Construction Industry has been decimated. And all of those things cause big, gaping holes in the state budget. The hardesthit area for us was the medicaid budget. You lost 21 million overnight. Overnight. And we were already scheduled or budgeted to lose 51 million. And so when you layered on 21 million on top of that, that brought our loss, or anticipated loss, to 72 million. The 21 million was cut by the legislature when tax revenues went bust. Nevada is number one in foreclosures. Unemployment is over 10 and climbing. Silver told us she had to defend her unique Services Like the trauma center, so she chose to sacrifice services that are duplicated at private hospitals, even though patients may not be able to afford them. The services that you have closed include what . We no longer provide prenatal services. We closed the outpatient oncology program. We cancelled a contract for outpatient dialysis. We closed the dedicated high risk obstetrical unit that we had. And we stopped doing outpatient mammography. We were there when the womens Cancer Clinic closed. Its like, you know, a sharp pain. I canti have to go, like, lay down. I cant move. Dr. Nick spiratos treats ovarian and uterine cancers. Take care. Its been great working with you. When the hospital first informed you that the outpatient Oncology Clinic was going to close, what did you think . How can you do this to Cancer Patients . Theyre dying. If we dont provide them care, their outcome is guaranteed. Theyre going to die. [hissing] we spoke to several of those patients. Roy scales, a laid off Security Guard with lung cancer, went to the hospital and got the news in person. I walked in. The lady looked down and said well, i dont see anything down here for you. Then she looked in the computer, and she said, oh, you were supposed to have an oncology today, but its been canceled. Our Oncology Department is closed. They turned you away at the door . They turned me away at the door without telling me anything. When you walked out of the hospital, what did you think . I mean, where am i going to find help . I mean, im messing with a disease that will kill you. And for every day that i dont get medical input, i mean, this advances on my body. Cancer is advancing on livia ralphs, who was recently laid off from her job selling cosmetics. It goes from here to here. You can probably see it sticking out. So in terms of the cancerous growth in your neck, the doctors believe its treatable. But you dont have a way to treat it . I have no funds. I have no insurance. Nothing. Patients who got the letter, like helen sharp, were sent a list of private chemotherapy centers, which leaves them in essence begging for care. I was wondering what care is available to me now that oncology is closed. [phone beeps] im trying to see whether im gonna die or not. One drug is almost 50,000. One drug, rituxin. Who can afford that . Theres nobody that can afford that unless youre a billionaire. Some of the patients we met are gravely ill. But all future patients are affected, including those with early, highly treatable cancers who would benefit the most. Kathy silver showed us her closed chemotherapy unit, which had treated 40 patients a day for 20 years. Well, im sad, because i know that there is room to serve patients and yet, financially, we cant afford to. You have the facility to save lives. You have people outside the hospital who need to have their lives saved. And you just cant put two and two together . The financial situation that we find ourselves in caused us to make some decisions that i think all of us, to a person would rather not have made. [watch ticking] when 60 minutes on cnbc returns, a mother of two fights Breast Cancer. As we sit here at this moment, you dont know. I dont know. Whether there will be another round. I donti dont know. I dont know. Its just so uncertain right now. I really dont know. [watch ticking] my mantra . Trust your instincts to make the call. To treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. Axiron can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or Breast Cancer. Women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about the only underarm low t treatment, axiron. A friend under water is something completely different. I met a turtle friend today so, you dont get that very often. It seemed like it was more than happy to have us in his home. So beautiful. Avo more travel. More options. More personal. Whatever youre looking for expedia has more ways to help you find yours. [watch ticking] 84, erica. Number 92, matthew. There are two medical assistance programs for the very poor, like the folks who line up here before dawn to apply for state services. Theres medicaid and clark county medical assistance. So if youre poor enough, youre okay . If youre poor enough, youre fine, because those patients are being taken care of. If youre rich enough, youre obviously fine. So who is falling through the cracks here . Its the patients who dont qualify for a social Services Type of program. What were talking about here are people who are making 30,000, 40,000, 50,000 a year and have lost their jobs and therefore lost their insurance. Thats correct. The middle class. Thats correct. Yolanda coleman is 45 years old, a single mother. Her Breast Cancer has entered her bones. We found her at home, bedridden, with a broken hip. Its hard to know how much she could benefit from chemo. But when we met her, she was receiving almost no care at all. A few months ago there wouldnt have been any question about whether you could have your next round of chemotherapy. Umc would have been available, and you couldve gone there. Yes, coleman replied. What does it mean to you that that is gone now . Its devastating, you know . Its absolutely devastating. She worked her whole life as a maid in hotels and as a truck driver, which was better money to support her 9yearold son and 16yearold daughter in the next room. As we sit here at this moment, you dont know. I dont know. Whether there will be another round of chemo for you . I dont know. I dont know. Its just so uncertain right now. I really dont know. Im just trying to live it day by day and trying to keep my spirits up and trying to keep, you know, trying to get well so i can take of them two i got in there. You know, i got to take care of them. She had three rounds of chemotherapy under her insurance plan. Then she became too sick to work and lost her insurance, exactly the situation umc used to take care of. You know, yolanda, i think most people watching this interview think to themselves that if they get cancer and they dont have Health Insurance that somebodys going to take care of them. No, no, theres nobody gonna take care of you. Is whats happening to this hospital in las vegas unique or is this kind of thing happening all about the country . I think this is happening to some degree to probably every Public Hospital across the country. I think its happening to us to a greater degree because we arewere sort of the epicenter of whats happening. Were a demonstration project, if you would, of all the things that can go wrong at once. Nick spiritos, the doctor we met closing the womens clinic, has not been able to leave his patients behind. Weve taken care of these ladies for years. Theyve been our family. Youre not gonna push them out in hard times. He took a storeroom in his private office and spent 100,000 turning it into a chemo clinic for ovarian and uterine cancers. And you told them they can come here to your clinic and receive free medical care . Correct. Weve asked those who can pay, pay. If they can pay 5 a month, they pay 5 a month. If they can pay 20 a month. Were asking them to do what they can. And those who can do nothing, thats our job to take care of. Spiritos expects 10 of his patients wont be able to pay, so he and his partners will cover them. Theyve put collection boxes out at Convenient Stores around town. Other private clinics are also providing free care. And charities, including the susan g. Komen foundation, are stretching to help the desperate. But these are emergency measures. [machinery beeping] after a month of uncertainty, helen sharp was treated at umc. With the Outpatient Clinic closed, the hospital admitted her as an inpatient. It says it made an exception because her Heart Disease and diabetes are life threatening complications. But livia ralphs is still searching for care. Im going to die if i dont get treated. Thats the bottom line here. Yolanda coleman remains untreated. And after our visit, a medical supply company took away her bed and her wheelchair. You never know what god has for you down the road. But i know he has more for me than just to leave my children because i cant have medical insurance. Roy scales has been calling the private doctors on that list University Medical center sent with its letter. He has been searching for someone who will accept payment from the county medical assistance for the poor, something he calls insurance. But its been five months since he was diagnosed. How many doctors and oncology practices did you call . Oh, man, it had to be at least 25. And they told you what . What about your insurance . I told them about the insurance, well, we dont accept that insurance. What are you going to do if you cant find a doctor to take care of you . Die peacefully. Roy scales died shortly after this story first aired. For other Cancer Patients in las vegas, Nevada Cancer Institute opened a new Oncology Clinic at umc in the fall of 2010 with the help of a 3 million grant. And the clark county supervisors also appointed an advisory board, including dr. Nick spiritos, to help the hospital regain its financial footing. Thats this edition of 60 minutes on cnbc. Im steve kroft. Thanks for joining us. [watch ticking] captioning by captionmax www. Captionmax. Com this is an american greed special presentati. Americas criminal corporation. Money, power, status, and influence. What fuels the mafia is, i think, what fuels almost any business. The american mafia has been going strong for more than 80 years. Its pure criminal capitalism at its best. They specialize in loansharking, extortion, embezzlement, and more. The ability to kill gives them a special power. Murder is a negotiating tool of last resort. We just dont kill people for nothing. Theres rules, and you got to follow the rules. This is why they call it the mafia