After novelist Michael Peterson’s wife, Kathleen, was found dead in 2001, the “Staircase Murder” case would eventually have more plot twists than one of his books.
There were allegations that Michael was hiding a bisexual history, online chats with a gay escort, reports that he faked his military credentials, and even speculation that Kathleen’s death could have been caused by an owl attack.
But the lurid headlines hid a simpler reality: The couple was having marital problems and, according to prosecutors, living beyond their means. And most damningly, Kathleen’s insurance policies were worth almost $2 million combined — and payable to Michael.
Michael claimed that he found Kathleen’s lifeless body after she fell down the stairs — but an autopsy report concluded that she’d sustained severe injuries including a fracture of the thyroid neck cartilage and seven lacerations to the top and back of her head that were consistent with blows from a blunt object.
Was money the motive for the “Staircase Murder”? The prosecutors seemed to think so: At trial, they focused hard on the couple’s finances.
Kathleen Peterson had a life insurance policy valued at around $1.5 million in effect at the time of her death on December 9, 2001.
Michael portrayed himself publicly as a successful novelist, but at trial, it emerged that the Petersons were spending $100,000 a year more than they made during each of the three years before Kathleen’s death.
In addition, Michael’s sons were all reportedly heavily in debt — so much so that they could not afford to pay even the interest on their loans.
A North Carolina State Bureau of Investigation agent stated that he looked at the couple’s five checking accounts and found that the Petersons were carrying more than $142,000 in credit card and credit line debt spread across 20 different active accounts.
Within six months of his wife’s death, Peterson collected $347,000 of Kathleen Peterson’s assets, including her 401(k) and pension plans from Nortel Networks. Michael Peterson claimed that he used most of this money for his legal defense — and money definitely made a difference.
“By the time the Durham police arrived at the Cedar Street mansion that terrible December night, Peterson had retained private counsel, as is his constitutional right. Upon his lawyer’s advice, Peterson never talked with police about what had happened to his wife, as is his constitutional right. He was able to post a bond to get out of jail pending trial, as is his constitutional right,” Anne Saker wrote in The News & Observer.
“By then, Peterson had effectively pledged his net worth and, later, the proceeds from the sale of that mansion, to the protection of his constitutional rights.”
For years, Kathleen’s other life-insurance benefit was tied up in civil lawsuits between Peterson, Kathleen’s daughter Caitlin Atwater, and her ex-husband Fred Atwater. Caitlin later reached a settlement with Prudential Insurance. After Michael’s conviction, the company agreed to split the money between Caitlin and Fred Atwater, who is also her biological father.
In 2007, Michael Peterson and his stepdaughter agreed to a $25 million settlement in a wrongful death lawsuit she filed against him. He later filed for bankruptcy.
In 2011, Peterson was granted a new trial. On February 24, 2017, Peterson submitted an Alford plea to the reduced charge of manslaughter. He was sentenced to time already served, and freed.
In October 2017, Caitlin Atwater Clark filed a motion to reinstate the $25 million wrongful-death judgment Peterson agreed to pay.
For more on Michael Peterson, watch Investigation Discovery’s An American Murder Mystery: The Staircase on ID GO now!
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Main photo: Michael Peterson [CBS 17 / YouTube (screenshot)]