captioning funded by cbs and ford-- built for the road ahead. >> kroft: they are agents of the federal government operating out of a secret location in south florida going after what's become one of the biggest criminal enterprises in america- - medicare fraud. is the medicare fraud's business bigger than the drug business in miami now? >> i think it's way bigger. >> kroft: it is a quiet crime. the only victims are the american tax payer, and they don't even know they're being ripped off. how much money did you steal from medicare? >> about $20 million. >> kroft: was it easy? >> real easy. >> kroft: you're not exactly a criminal master mind. >> ( laughing ) >> couric: as president obama's

senior advisor, david axelrod is accustomed to fighting battles in the rough-and-tumble world of politics. but he and his wife susan have been face to face with another very personal adversary for the last 28 years. that's when their daughter lauren was diagnosed with epilepsy. >> you know, epilepsy is like terrorism of the brain. you don't know when it's going& to strike, where you're going to be. >> couric: the axelrods are part of a movement that has tried to jump-start medical research. it's finally beginning to unravel the mysteries of a disease that can strike and kill at any moment. >> pitts: he's one of the biggest names in the american movie business, and almost every time tyler perry puts a new movie out, it opens number one at the box office. he has built a multimillion dollar empire. yet most americans have never heard of him. how can that be?

he says what he creates is directed at a specific audience, and they can't seem to get enough of him. >> do not see him small because he is not just some lucky, rich negro turned black man. he is not. >> i'm steve kroft. >> i'm lesley stahl. >> i'm scott pelley. >> i'm morley safer. >> i'm byron pitts. >> i'm katie couric. those stories and andy rooney tonight on "60 minutes." ocean spray cranberry juice cocktail tastes real good. it's packed with powerful nutrients that help strengthen your immune system. i'll be your immune system on cranberry juice. okay, bring it on, bad stuff. still healthy? mm-hmm. they say imports always get the best mileage. well,do they know this malibu offers an epa estimated 33 mpg highway? they never heard that. which is better than a comparable toyota camry or honda accord?

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facing the united states right now, none are more important than health care. president obama says rising costs are driving huge federal budget deficits that imperil our future, and that there is enough waste and fraud in the system to pay for health care reform if it was eliminated. at the center of both issues is medicare, the government insurance program that provides health care to 46 million elderly and disabled americans. but it also provides a rich and steady income stream for criminals who are constantly finding new ways to steal a sizable chunk of the half a trillion dollars that are paid out each year in medicare benefits. in fact, medicare fraud, estimated now to total about $60 billion a year, has become one of, if not the most profitable, crimes in america. we caution you that this story may raise your blood pressure, along with some troubling questions about our government's ability to manage a medical bureaucracy.

if you want to find medicare fraud, the first place you should look is south florida, where we were told it has pushed aside cocaine as the major criminal enterprise here. it's a quiet crime, no sirens or gunfire. the only victims are the american taxpayers, and they don't even know they are being ripped off. fbi special agent brian waterman, who we rode with for several days, told us the only visible evidence of the crimes are the thousands of tiny clinics and pharmacies that dot the low-rent strip malls. you don't even know they're there because there's never anyone inside-- no doctors, no nurses and no patients. >> brian waterman: this office number should be manned and answered 24 hours a day. >> kroft: this tiny medical supply company billed medicare almost $2 million in july and a half-million dollars while we were there in august, but we never found anybody in, and our phone calls were never returned. they say they're currently on the other line. >> waterman: oh. well, do they want you to hold?

>> kroft: sometimes, they don't even have offices. we went looking for a pharmacy at 7511 northwest 73rd street that billed medicare $300,000 in charges. it turned out to be in the middle of a public warehouse storage area. >> waterman: they've already told us that there's no offices here. there are no businesses here. in fact, they are not even allowed to have a business here. >> kroft: waterman is the senior agent in the miami office in charge of medicare fraud. and kirk ogrosky, a top justice department prosecutor, oversees half a dozen medicare fraud strike forces that have been set up across the country. this one operates out of a warehouse at a secret location in south florida, and includes investigators from the fbi, health and human services, and the irs. >> waterman: there's a healthcare fraud industry where people do nothing but recruit patients, get patient lists, find doctors, look on the internet, find different scams. there are entire groups and entire organizations of people

that are dedicated to nothing but committing fraud, finding a better way to steal from medicare. >> kroft: is the medicare fraud business bigger than the drug business in miami now? >> kirk ogrosky: i think it's way bigger. >> kroft: what changed? >> ogrosky: the criminals changed. >> waterman: sophistication. >> ogrosky: they've figured out that, rather than stealing $100,000 or $200,000, they can steal $100 million. we have seen cases in the last six, eight months that involve a couple of guys that, if they weren't stealing from medicare, might be stealing your car. >> waterman: you know, we were the king of the drugs in the '80s. we're king of healthcare fraud in the '90s and the 2000s. >> kroft: but it's not just miami. in march, the fbi arrested 53 people in detroit, including a number of doctors, and charged them with billing medicare more than $50 million for unnecessary medical procedures. and in los angeles, the city of angels medical center recruited homeless people off the street to fill their empty beds, offering them cash and drugs, plus clean sheets and three squares a day, while billing

medicare tens of millions of dollars for their stay. >> eric holder: we have to understand this is a major fraud area. >> kroft: united states attorney general eric holder is taking a crime that has been in the backwaters of law enforcement and made it a top priority at the justice department. why do you think it's been so attractive for the criminals? >> holder: because i think it's been pretty easy. i think that they have found a way in which they have been able to get pretty substantial amounts of money with not a huge amount of effort and, at least until now, without the possibility of great detection. >> kroft: with much fewer risks... >> holder: much fewer risks. you'll see some of these people, and they'll say, "you know there is not a chance that you are going to have some other drug dealer shooting at you." the chances of being incarcerated were lower, the amount of time you would spend in jail was smaller. all of which is different now. >> tony: you're waking up every day, making $20,000, $30,000, $40,000-- every day, almost literally. and you're like, "wow, i just won the lottery." >> kroft: let's call this guy "tony." that's not his real name, and obviously, not his real face.

but before he was ratted out by a friend and brought down by the fbi, he was making wall street money running a string of phony medical supply companies out of this building that were theoretically providing wheelchairs and other expensive equipment to medicare patients. how much money did you steal from medicare? >> tony: about $20 million. >> kroft: $20 million? >> tony: yes. >> kroft: was it easy? >> tony: real easy. >> kroft: and you're not exactly a criminal mastermind? >> tony: no, no. ( laughs ) no, not really. it's more like common sense. >> kroft: did you actually ever sell any medical equipment? >> tony: no. no. just have somebody in an office answering the phone, like we're open for business. and wake up in the morning, see how much... check your bank account and see how much money you made today. >> kroft: you didn't have any medical equipment. you didn't really have any clients, either, did you? >> tony: no. >> kroft: all of it was fake? >> tony: all of it was fake, yes. >> kroft: and you would just fill out some invoices and some forms and send them to medicare, and...? >> tony: that's it. in 15 to 30 days, you'll have a direct deposit in your bank

account. i mean, it was ridiculous. it's more like taking candy from a baby. >> kroft: according to the fbi, all you have to do to get into this business is rent a cheap storefront office, find or create a front man to get an occupational license, bribe a doctor or forge a prescription pad, and obtain the names and i.d. numbers of legitimate medicare patients you can bill the phony charges to. >> waterman: there's a whole industry of people out there that do nothing but provide patients. >> kroft: when you say "provide patients," what do you mean? >> waterman: i'm just talking about lists of patients-- people's names, social security numbers, addresses, and date of birth. with those four things, you can bill for a patient. >> kroft: in order for medicare to pay, you need to have a medicare patient. where do you get those? >> tony: there'll be people that would sell you a list of maybe $10 per patient. and i'll buy 1,000, 10,000 maybe at a time. and then, you just fill in the... the patient's name and you send it. and then, i used the same patients with the same company, and then the next company, i used the same patients, and i kept using them. and they'll pay for the same patient every time.

>> kroft: once the crooked companies get hold of the patient lists, usually stolen from doctors' offices or hospitals, they begin running up all sorts of outlandish charges and submit them to medicare for payment, knowing full well that the agency is required by law to pay the claims within 15 to 30 days, and that it has only enough auditors to check a tiny fraction of the charges to see if they are legitimate. if they're not, it's usually people like 76-year-old clara mahoney who catch them. she began to notice all sorts of crazy things turning up on her quarterly medicare statements back in 2003, things that medicare paid for on her behalf that she had never ordered, never wanted, and never received. what kind of things? >> clara mahoney: oh, air mattresses, a wheel chair, urine bag for my leg. ( laughs ) it was getting so i didn't want to open up the... the explanation of benefits because, you know, it's like, "oh, no, not again."

>> kroft: mahoney, who says she hasn't been sick in 30 years, began calling medicare to tell them that someone was ripping them off. but the only responses she received were letters saying that someone was looking into it. the bogus charges are still turning up on her statements. >> mahoney: and i continued to report and i... i kept saying, "can't you flag my account? you know, i'm not getting any equipment or supplies, nothing." >> kroft: so, how many years have they been looking into it? >> mahoney: six years. ( laughs ) >> kroft: once criminals like tony get their hands on usable patient numbers, they try and charge medicare for the most expensive equipment possible, which requires having access to a list of medicare codes. and what were some of the best codes? >> tony: artificial limbs, electric arms, electric wheelchairs. i mean, a regular patient, you can put them on two artificial legs and an artificial arm, and they'll pay for it. >> kroft: and that's what happened to former federal judge ed davis. he was one of those patients who started getting charges on his medicare statement for

artificial limbs. >> judge ed davis: and i looked at it and it had charges for prosthesis, and i knew i had my arms. >> kroft: did you get the left arm and the right arm on the same bill? >> davis: both arms, same bill, yeah. >> kroft: and you obviously have two good arms. >> davis: the same ones i have had for over 70 years. >> kroft: didn't anybody in medicare check to see if any of these charges were valid? >> tony: sometimes, they'll do it. but by the time they did it, it was too late. >> kroft: too late? >> tony: yeah. we're... already made $300,000, $400,000, $500,000 on it, and then, we will never send them nothing back. and then at 30 days, they'll send an inspector to your office, and by that time... >> kroft: it's all closed down? >> tony: ... it's all closed down. >> kroft: so they would pay first and audit later? >> tony: yes. >> kroft: uh-huh. there's something i don't understand. i mean, you're saying, essentially, people just fill out the phony paperwork, they send a bill to medicare, and they pay it. >> waterman: that's why you have companies that can run for 60, 90 days, and bill for ridiculous things. because there are very few checks and balances to even

determine whether these things a) were medically necessary, b) were ever given, or c) even physically possible for a patient with the kind of conditions they have. >> kroft: the fbi calls it "pay and chase," and riding around with them, we saw plenty of examples. this tiny pharmacy in a hialeah strip mall went from billing medicare $13,000 in may to billing nearly a million dollars a month later. this place billed $800,000 in the month of june? >> correct. >> kroft: that's a pretty small place. by the time we were there in august, the fbi says, the owners had already burned the company, shut it down, and moved on to another operation. >> waterman: we were here last week. it was... there was stuff on the shelves. the business still had a name on it. you can still see, from where the tape is, that someone just took this off. >> kroft: to understand just how preposterous all of this is, the fbi says this tiny little store collected six times more money from medicare in june than the largest walgreen pharmacy in the state of florida.

quite an achievement, since neither the fbi nor the proprietor of the bingo parlor next door ever saw a customer coming or going. what's the deal with the pharmacy? >> i've never seen people, only twice. >> kroft: no customers? >> no customers. it's always been locked. >> kroft: we obviously had a few questions to ask the people at medicare, and requested an interview with the person in charge of preventing fraud. that turned out to be kim brandt, medicare's director of program integrity. we went around with an fbi agent and a woman from health and human services. they took us to storefront after storefront after storefront, billing $300,000 or $400,000 a month. and they were completely empty, nobody there. i mean, how do they get away with that? >> kim brandt: we're as frustrated by that as the law enforcement officials that you went out with. and in fact, our primary focus over the past years has been to tighten our enrollment standards to make it so it's much harder for people like that to be able to get in the program and to be able to commit that kind of fraud. >> kroft: look, i'm sure that

you're aware of these problems. but it doesn't seem like you're doing a very good job. i don't mean you personally, but i mean, the... the government. this is still, like, a huge problem, and getting worse, right? >> brandt: well, it really does come down to the size and scope of the medicare program, and the resources that are dedicated to oversight and anti-fraud work. one of our biggest challenges has been that we have a program that pays out over a billion claims a year-- over $430 billion-- and our oversight budget has been extremely limited. >> kroft: about that, there is little dispute. medicare has just three field inspectors in all of south florida to check up on thousands of questionable medical equipment companies. >> holder: clearly, more auditing needs to be done, and it needs to be done in real time. >> kroft: why has it taken medicare so long to figure out they were being scammed? >> holder: i think lack of resources, probably. and then, i think people... i don't think necessarily thought that something as well intentioned as medicare and

medicaid would necessarily attract fraudsters. but i think we have to understand that it certainly has. >> kroft: the obama administration is providing medicare with an additional $200 million to fight fraud as part of its stimulus package, and billions of dollars to computerize medical records and upgrade networks should help medicare catch more phony charges. but tony, who has just begun serving his 12-year prison sentence, says there's no shortage of people in miami waiting to take his place. how many people in miami were doing this? >> tony: i'd say at least 2,000 people; at least 2,000, 3,000 companies. >> kroft: well, presumably some of them are going to be legitimate? >> tony: i say less... less than 5%. >> kroft: less than 5%? >> tony: yes, less. >> kroft: if went to the phone book and looked under "medical equipment suppliers," 95% of the companies would be phony? >> tony: yes, sir. >> cbs moneywatch update,

sponsored by prescription flowmax. >> good evening. jeffrey pickaur, an associate of bernard madoff was found dead at his home, he was being sued by the trustee seeking to recover money from madoff's victims. in other news, gas shot 18 cents to an average of 2.66 a gallon. i'm russ mitchell, cbs news.

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>> couric: as president obama's senior advisor, david axelrod is accustomed to fighting battles in the rough and tumble world of politics. but he and his wife susan have been face to face with another very personal adversary for the last 28 years. that's when their oldest child, lauren, was diagnosed with epilepsy. lauren axelrod is one of nearly three million americans living with epilepsy, more than parkinson's, multiple sclerosis and cerebral palsy combined. and one third of those with

epilepsy don't respond to treatment. faced with few medical options, the axelrods are part of a movement that has tried to jump- start medical research in a fight for a cure, and is finally beginning to unravel the mysteries of a disease that can strike and kill at any moment. >> david axelrod: you know, epilepsy is like terrorism of the brain. you don't know when it's going to strike, where you're going to be. >> couric: david and susan axelrod knew nothing about epilepsy until, one morning, susan found their seven-month- old daughter lauren lying in her crib, limp and blue. >> susan axelrod: i thought that she had died. and i picked her up, and she immediately went into a seizure. now, i had never seen a seizure before in my life, and i didn't know that that's what it was, and i watched, you know, one arm go up, and... and her body stiffen, and her eyes rolled back, and she was frothing at the mouth. your classic description of a

seizure. >> couric: this is what a seizure can look like. it's caused by a sudden, out of control burst of electrical activity in the brain. some children grow out of it; others can control it with medication. but, for lauren, nothing worked. as she grew older, she continued to have seizures, sometimes as many as 25 a day. you've written, i know, susan, very eloquently about this, but lauren used to scream, "mommy, make it stop, make it stop," and... >> susan axelrod: there's nothing worse than... you know, than having your child cognizant enough to know what's going on and know what's happening and begging you to help, and you can't do anything. >> couric: lauren is now 28 years old. her brain was damaged by the severity and frequency of her seizures, and she's living at the misericordia home for the developmentally disabled in chicago. do you remember what it felt

like to have a seizure? >> lauren axelrod: it felt like it was really scary when i had them. >> couric: like what? can you describe it? >> lauren axelrod: like that i was feeling like i was going to fall down when i had them. >> david axelrod: the other half of the story isn't just what happened during the seizures, but between the seizures. because the medications and the treatments were so hard, and they impacted on her personality, and they impacted on her cognition, they impacted on her ability to walk. >> lauren axelrod: i'm lauren. i'm 18 years old. >> couric: by the time lauren was 18, they had tried 23 different medications and an unsuccessful brain surgery. nothing worked, and the axelrods were stunned to realize how little research and money were dedicated to finding a cure. epilepsy strikes and kills as many people each year as breast

cancer, which gets five times more federal funding. so, susan and two other mothers started a non-profit called "cure" to raise awareness and fund innovative research. >> susan axelrod: why can't they stop a seizure? i mean, this is a disease that's been known since biblical times. and it just seemed the... the research and the ability to treat and control is so primitive. >> couric: why? as you say, it's been around forever. it affects so many people. >> david axelrod: you know, it was viewed, even into this century, as... you know, widely as sort of demonic possession and so on. you know, it's so frightening to see someone have a seizure. and it makes people uncomfortable. >> frances jensen: that is a seizure. you're looking at a seizure. >> couric: some of cure's money goes to the lab of dr. frances jensen at children's hospital in boston. and she's making significant progress. her team is developing the first medicines designed specifically for newborns, whose growing

brains are particularly susceptible to seizures. >> jensen: some of the epilepsies that affect babies, they don't respond to adult drugs, so the seizures don't get corrected. the brain development in the more severe cases gets affected. >> couric: dr. jensen's method for developing new drugs involves actual epileptic brain tissue, which she can keep alive for several hours, enough time for her to experiment with different medications. >> jensen: this cell coming out of a human patient you can see is having an epileptic seizure. >> couric: she's testing a new anti-convulsant drug and, at least in the lab, it worked. >> jensen: we can see that we've stopped brain activity in this case. >> couric: this seems like a eureka drug. is it? >> jensen: well, it is a prototype drug. so, in this case, it worked. >> couric: but no one medication will ever treat the more than 25 different types of seizures, which are diagnosed by recording brain activity. if a seizure is in the part of

the brain responsible for motor skills, it can cause a person to jerk uncontrollably. in another region, it can be as subtle as a brief staring spell. because of the range of symptoms, dr. jensen says epilepsy is often misdiagnosed. >> jensen: the people that have staring spells could be mislabeled as just, you know, not paying attention or attention issues. some people later in life have seizures, and it gets mistaken for dementia. >> couric: does it make you furious that more attention hasn't been paid to this? >> jensen: yes. people don't realize that it's happening to two in 100 people, and even more than that-- in five or six out of every 100 children have had some form of epilepsy. >> couric: some of the people most at risk are those who have sustained head injuries, which is why the u.s. military is also focusing on epilepsy. there are thousands of veterans with traumatic brain injuries from fighting in iraq and

afghanistan, who we know from other wars have up to a 50% chance of developing epilepsy. captain pat horan was severely wounded two years ago while on patrol in baghdad. >> captain pat horan: i got shot right in the head. i lost my... what is it called? my... reading. >> couric: he also lost his ability to walk, write, and even speak. >> horan: i lost the whole thing. >> couric: pat and his wife patty say his seizures, which started four months after his injury, have been the hardest part of his recovery at walter reed medical center. each seizure would wipe out the progress he was making, and he'd have to start all over again. do you wonder, patty, how much more pat might have progressed if he didn't have the epilepsy? >> patty horan: yeah, i do. they say most of your healing is

going to be done in the first two years. so, a year and a half of that, he had seizures, you know, every month, every two months, >> david axelrod: you have all these young people coming back and they are very, very much at risk. the statistics from vietnam reflected a high percentage of those with penetrating brain injuries developed epilepsy, you know, five, seven, ten years later. >> couric: the military is already treating soldiers with severe brain injuries in the field with anti-seizure medications, to try to prevent seizures during the early stages of recovery. at 29 sites across the country, another experimental treatment is underway, using a pulse of electricity in the brain to stop a seizure in its tracks. 26-year-old monica lovelace is part of the clinical trial going on at california pacific medical center in san francisco.

monica was diagnosed with epilepsy when she was five years old after contracting meningitis. she and her husband ben have two young children, but her seizures make it hard for her to take care of them. why did you decide to get this experimental procedure? >> monica lovelace: absolutely, for my kids. absolutely. i won't... i wanted to be able to walk my kids to school. if i'm walking them... them to school and i have a seizure, are they going to walk into the street? >> couric: she is getting a device implanted in her brain that will detect the beginning of a seizure and give her a pulse of electrical stimulation to make it stop, like a pacemaker. dr. peter weber, a neurosurgeon, uses a computer to calculate the safest route to implant electrodes in her brain. >> dr. peter weber: the wires come from the back forward, deep inside the brain. that's the way they look from the front-on view. >> couric: implanted in the skull, the neuro-pace device is

smaller than a cell phone. when it's turned on, it immediately detects monica's abnormal brain activity. >> weber: these are abnormal discharges that lead to seizures. >> couric: we followed up with monica three months after the device was implanted. now that you have this device in your brain, what happens when you feel a seizure's coming on? can you explain it? >> lovelace: it doesn't come on. yeah, it doesn't come on. >> couric: monica still gets the familiar sensation that she's about to have a seizure, but now, it usually stops. she showed us how she wirelessly downloads her brainwaves. >> lovelace: this goes over the area where the device is. >> couric: the information is sent by computer to her doctor, who then fine-tunes the stimulation. while the device is still in the early stages, a preliminary study showed it helped 50% of people with seizures in the same region of the brain as monica's. >> lovelace: it's kind of neat,

because me and my husband were talking about all the different possibilities of what i can do now, like, you know, maybe getting a job. >> couric: after 18 years of trial and error, lauren axelrod was given a newly approved medication that finally controlled her seizures. at her home in chicago, she is becoming more independent and making friends. her father hung one of her paintings above his desk at the white house after he moved to washington last year. how torn do you feel having lauren here? >> david axelrod: it's been hard to explain to her. she doesn't understand why. she asks all the time, "why does barak obama need so much help?" >> couric: he recently surprised her with an unplanned visit. while the axelrods are grateful for how far their daughter has come, they're committed to helping other families intervene sooner than they could for lauren.

do you ever look at her and kind of think, "gee, what if? what would she be doing now?" >> susan axelrod: too often. and this is what happens. it's painful. >> david axelrod: god knows wha& she could've been. but that's a... that's a treacherous place to go. you know, there was a time when we have given our right arm for just a... a week of good days. and now, she has them consistently. so, you know, that's a big victory. you know why i sell tools? tools are uncomplicated? nothing complicated about a pair of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping is easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. come on. how about...a handshake.

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you can stop that heartburn cold. (sssssssss!!!) the prices. the profits. the pollution. what's next from the big oil companies? a multi-million dollar smear campaign... ...to stop clean energy legislation from passing in the us senate. the clean energy bill will produce more power here in america for us. and big oil knows that means less dependence on them. it's time to take charge with clean american energy. >> pitts: what filmmaker has had five movies open number one at

the box office in the last four years? spielberg? tarantino? scorsese? no. this record belongs to tyler perry, one of the biggest names in the movie business, yet most americans have never heard of him. his eight films have grossed more than $418 million, one of the highest average grosses per film in the industry. and they're just part of perry's multi-million dollar entertainment empire. what's made tyler perry guaranteed box office gold is his devoted audience-- largely african american, church-going, working class, and female. long ignored by hollywood, they come to see something they can't get anywhere else-- inspirational stories about people like themselves-- and to laugh at characters like this. >> tyler perry: go on in that room and take your medicine. you know you crazy as hell when you don't take it. >> pitts: the gun-toting, wisecracking grandmother--played by tyler perry himself-- madea. >> perry: my soul cries out "hallelujah." "thank god for saving me."

madea is a cross between my mother and my aunt. she's the type of... of grandmother that was on every corner when i was growing up. she... she smoked. she walked out of the house with her curlers and her muumuu, and she watched everybody's kids. she didn't take no crap. she's... a strong figure in... in the... where i come from, in my part of the african-american community. and i say that because i'm sure that there are some other parts of the african-american community that may be looking at me now going, "who does he think he's speaking of?" but, for me, this woman was very, very... ( laughter ) very, very visible. >> pitts: that's what tyler perry's work is all about, reflecting a world his audience relates to. and they show up in droves. >> perry: you heard of the horse whisperer? i'm the kid whisperer. >> pitts: it's been written that madea is one of the top ten grossing women actresses in the country. >> perry: they weren't serious when they wrote that. i mean, come on.

( laughter ) come on. >> pitts: but madea's done well. she's done well by you. >> perry: yeah, she has, she has. ( laughter ) >> pitts: so have his other popular characters, like the flamboyant mr. brown. >> perry: i'm leroy brown. my friends call me leroy brown. you can just call me... >> leroy brown? >> perry: yeah, yeah, how'd you know? >> pitts: but it's not just comedy. perry's work is a gumbo of melodrama, social commentary and inspiration. >> we got the... the strength god gave us women to survive. you just ain't tapped into yet. >> pitts: it's a formula, one that intentionally targets women. >> perry: you're always going to see a person of faith... nine times out of ten, it'll be a woman who has problems, who has lost faith or lost her way. there's always going to be a moment of redemption somewhere for someone. >> pitts: and then there are the grittier, darker elements-- the violence, especially directed at women and children, sex and child abuse, prostitution and drugs use. but there's always a fairy tale

ending-- a happy marriage, a reconciliation, often delivered with a dose of gospel music. >> ♪ take it to jesus... >> pitts: although perry's themes are universal, he's not widely known outside of his niche audience. the average american has no idea who you are. how is that possible? >> perry: i'll tell you how it's possible. it's... there's this great thing called the chitlin' circuit, which i started my shows on. and back in the day when the... you know, ray charles and billie holiday and duke ellington, they couldn't get into white establishments, so they went on this circuit and toured. they were huge stars in their own community, you know, and that's pretty much my same story. i... i was able to build and have this amazing career among my own people. but outside of that, you know, not a lot of people knew who i was. >> pitts: tyler perry, superstar of the chitlin' circuit? >> perry: that's... ( laughs ) yeah. superstar of the chitlin' circuit-- i'll take that. ( laughs ) ( cheers and applause ) >> pitts: you realize what a superstar he is and how strongly the audience connects to him

when he appears on stage after a performance of one of his plays. their reaction gives you a sense of how passionate they are about him. ( cheers and applause ) >> perry: you make me nervous. sit down. >> pitts: but he didn't always get this kind of reaction. he got his start in theater, writing, directing and producing plays. his first production, a gospel musical staged in atlanta in 1992, bombed. but he kept writing and staging new plays, cultivating his audience. by the late '90s, they were selling out across the country, making big money-- more than $75 million. perry's goal? turn those shows into movies. hollywood's reaction? "get lost." >> perry: they didn't open the door. i had to cut a hole in the window to get in. >> pitts: that's what you did? >> perry: oh, yeah, man. it's... you close the door on me and tell me i can't, i'm going to find a way to get in, yeah. >> pitts: he found his way in by setting up shop in atlanta in 2004 where he made his first film, "diary of a mad black

woman," using his own money. >> perry: "he who has the gold makes the rules." if somebody else is going to give you the money, then they're going to be in control. they're going to own it, they're going to tell you how it goes, they're going to give you notes and give you changes. i wasn't willing to do that, so there was no other option for me. >> pitts: "diary" debuted at number one in 2005, stunning hollywood. perry's been surprising hollywood ever since, doing it his way. he writes, directs, and produces his movies. and all eight of them have been major hits, including his latest, "i can do bad all by myself," which opened number one at the box office in september. this is your dream. >> perry: yeah, yeah. one of them, one of them. >> pitts: this is tyler perry studios-- 31 acres of movie and television production facilities, one of the largest independently owned studios outside of hollywood. it opened last october, financed by perry himself, with the profits he's made from his productions. it's perry's multi-million dollar magic kingdom.

>> perry: this is the back lot. and i named it 34th street, as in "miracle on 34th street." >> pitts: he makes all his films here, releasing two a year, and he employs as many as 400 people. >> perry: that's the cicely tyson stage. >> pitts: it has five sound stages, a gym, even a chapel. >> perry: this is wardrobe. there's madea. >> pitts: where? >> perry: up there, that's all madea. that's where she live between movies. >> roll sound. rolling. >> pitts: when he's not making movies, this relentless multi- tasker is running his two hit sitcoms on tbs, "house of payne" and "meet the browns." >> perry: hit them, hit them hard really. >> pitts: he has total creative control, and owns everything he makes. >> perry: and we cut. very good. thanks a lot. i'm out of here. ( laughs ) >> tyler. tyler. >> pitts: tyler perry's huge success has brought him power, and even comparisons to oprah, his friend and mentor. they've teamed up to executive produce "precious," a film about an urban teenage mother battling abuse and illiteracy, which opens in november.

>> oprah winfrey: do not play him small, because he is not just some lucky, rich negro turned black man. he... he is not. to be able to take what he saw as an opportunity to reach a... a group of people, and to turn that into this multi-million-- soon to be multi-billion dollar enterprise-- is what everybody else is trying to do. >> pitts: what's the connection you think tyler perry has with african-american women? >> winfrey: well, first of all, i think he grew up being raised by strong black women. and so much of what he does is... is really in celebration of that. i think that's what madea really is-- a compilation of, you know, all those strong black women that i know, and maybe you do to? and so, the reason it works is because people see themselves.

>> perry: this is it, this is my universe. >> pitts: perry says he's writing what he knows, writing where he comes from. he grew up working class in this tough new orleans neighborhood. >> perry: man, my heart is racing, just being here. isn't that crazy? >> pitts: why? >> perry: i don't have good memories here at all. >> pitts: but it's those memories, both good and bad, that have inspired much of his work. >> perry: mr. james is still sitting on that porch. he's watching everything-- you know, "that boy was over there with that girl last night." ( laughter ) >> pitts: that sounds like one of your characters? >> perry: yeah, man. listen, are you kidding me? >> pitts: we met two neighbors who reminded us an awful lot of a certain grandmother. >> perry: these are the kind of women i grew up with. >> oh, yes. >> perry: and... and people wonder where... >> and christian women, christian women. >> perry: and christian women with guns. ( laughs ) >> i mean, christian women. >> perry: and the people wonder where madea came from. >> pitts: we crossed the street to where he used to live. the pain of his past came back. >> perry: this is where i grew up. and i have not been in this house in years.

>> pitts: in this house, perry says his father emmett repeatedly beat him and his mother maxine. he describes one time when his father whipped him with a cord until the skin came off his back, and told us, when his father wasn't beating him, he was belittling him. your father used to warn your mother about you? >> perry: yeah. "one day, i would make her cry." because she would try to protect me from him. "what the [no audio] are you protecting him for? what are you... when... what are you protecting him for?" like, "this boy is [no audio]. he ain't going to be [no audio]. one day, he going to make you cry." >> pitts: he brought us out back, showed us the cubbie hole where he would escape from his father's abuse. >> perry: this was my hideout, my safe place, you know. >> pitts: when it got too much, you'd go in here? >> perry: yeah. i'd spend, like, all day in there. so, i had a door there so i could go in and close myself up, you know, to be okay for a minute. yeah. >> pitts: your father, it sounds

like, still makes you... can still make you feel like that boy, little boy. how was that possible? >> perry: you'd have to walk that road and be that little boy. a lot of it, i've... i've put out of my mind because it was so horrific and so painful that, had i not... that's where my imagination was born-- when he was losing it and saying all those things, it would... i could absolutely be there in that room with him at the top of his lungs, and go somewhere else in my head. >> pitts: his faith, and his mother, he says, saved him. >> perry: sunday morning, she'd take me to church. and this is the only time i saw her smile and happy, so i wanted to know the god, this christ, that made my mother, ah, smile so much. >> pitts: perry says he's forgiven his father and come to terms with the abuse. >> perry: this is what happens. you let it destroy you, or you take it and you use it. i chose to use it, and i chose to put in my work, and i choose to... to have it touch and make people understand it. >> pitts: yet, there are some

who don't understand perry's work and dismiss it, many of them african americans. they find characters like madea and mr. brown demeaning caricatures, racial stereotypes. spike lee has said, and i quote, "i think there's a lot of stuff out today that is coonery and buffoonery. i see ads for 'meet the browns' and 'house of payne,' and i'm scratching my head. we've got a black president, and we're going back. the image is troubling, and it harkens back to 'amos 'n' andy.'" he's talking about you. >> perry: i would love to read that to my fan base. let me tell you what madea, brown, all these characters are are bait; disarming, charming, make-you-laugh bait. so i can slap madea in something and talk about god, love, faith, forgiveness, family, any of those things, you know. so, yes, i... i think... you know, that pisses me off, it really does, because it... >> pitts: i can tell. >> perry: yeah. it's so insulting. it's attitudes like that that make hollywood think that these people do not exist.

and that's why there's no material speaking to them, speaking to us. >> welcome to cbs sports update. i'm james brown in new york with the scores from around the nfl today. new england dominates in its overseas visit, cruising by winless tampa bay. the saints have come back to try to stay perfect. minnesota falls from the ranks of the unbeaten while cincinnati crushes chicago. indy makes it 15 straight regular wins and houston ties out best start in franchise his tree. for more news and scores, log onto cbs news dts.sports.com. thinking about my wife. i should have done more to take care of myself. now i'm exercising, watching my diet, and i trust my heart to lipitor. (announcer) unlike some other

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>> safer: now, a few minutes with andy rooney. >> rooney: i'm not much interested in hearing any more talk about health care. president obama wants to overhaul what they call the health care industry. well, good, but i hate that phrase, the "heath care industry." i just don't like to think of my health as an industry. the fact is, though, being sick is often the least of our health problem. even if you're insured, what hospitals charge now is ridiculous. i had what they call an "outpatient procedure" recently and it cost my insurance company $9,361.00. i say it cost my insurance company, but let's face it-- in the end, i'm the one who pays. the u.s. spends more than any other country on earth on its health, $2.5 trillion. and what do we get for $2.5 trillion?

well, we're 50th in the world for life expectancy, below the polynesian french island territory of wallis and futuna, wherever wallis and futuna are. as steve kroft reported earlier on "60 minutes," we are losing billions of dollars on health care fraud. not on health care; on health care fraud. everyone cheats-- companies, hospitals, patients, doctors, drug companies, and government agencies. cheating goes on everywhere in the get-well business. during my recent outpatient procedure, a doctor came into my room, asked how i was doing and said, "by the way, i love your work on television." he left without touching me, and a couple of weeks later, when the bill came, it turned out his visit cost my insurance company $250.00. i mean, who knows what he would have charged if he didn't like my work. there's just no doubt we need health care reform, because the way it is now makes me sick.

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