Thirty-seven
While officials in Durham County were waiting for a final inventory of Kathleen Peterson’s estate, a preliminary accounting of her assets showed that she had a net worth of just above $250,000. Surprisingly, even though she was helping to make the mortgage payments, Kathleen Peterson did not own any part of the Cedar Street mansion. Mrs. Peterson’s worth included a personal bank account with about $1,600, vehicles valued at $17,895, stocks and bonds worth $5,600, a half-interest in some rental properties, valued at $176,000, and an Individual Retirement Account worth $52,000. The value of her Nortel Networks retirement plan and her life insurance policy were listed as unknown.
Prosecutors thought it peculiar that Kathleen Peterson died with so little net worth. Her salary at Nortel Networks was in the six-figure range, and she was living so large, it seemed like she had millions. People surmised that there was more money somewhere, that Kathleen Peterson’s net worth would prove to be greater. For one thing, Kathleen’s joint checking accounts with Michael were valued at about $20,000, but that was money that reverted back to him at the time of his wife’s death.
In mid-April 2002, Citibank filed a claim against the estate of Kathleen Peterson for more than $13,000. The credit card charges in her name had come from places such as California and Louisiana, states where Martha and Margaret attended college respectively, and there were also charges from New York, which were purchases made by Caitlin. The overall bill had been run up over a long period of time, and it included transactions made in Fort Lauderdale, where the Petersons had vacationed in November 2001, in addition to Christmas purchases made in Durham, just weeks before Kathleen died.
The Citibank claim against the Peterson estate made the front page of the local news sections, and folks in the Triangle region were shocked to learn that the Petersons had let so many charges pile up, not only with Citibank, but with Bank of America, Bank One, and other banks as well.
By that time, the prosecutors in Durham had already begun studying the Peterson financial situation, looking for a possible motive. Through the efforts of a North Carolina State Bureau of Investigation agent, the DA office would discover that, at the time of Kathleen’s death, the Petersons were over $140,000 in debt, carrying credit lines spread across twenty active accounts.
Even though the Petersons owned some small pieces of property, apart from the Cedar Street house, records showed that no one in the Peterson family had much equity in those parcels. Prosecutors learned that while Michael Peterson was purporting to be a wealthy, successful novelist—buying late-model cars and filling his home with expensive antiques—Mr. Peterson, in fact, hadn’t earned any substantial income in years. Aside from a modest military pension, Peterson had no money coming in that they could trace—not from royalties or from film options.
To prosecutors, it looked as though the Petersons were surviving solely on Kathleen Peterson’s $145,000-a-year income—and were affording the additional luxuries that made up their high-end lifestyle by living on credit. When prosecutors had the Petersons’ cash flow boiled down to gross numbers, there was evidence that for three years prior to Kathleen’s death, the Petersons were spending $100,000 a year more than they were taking in.
When word of the impending Citibank lawsuit was printed in the Herald-Sun newspaper, providing all the details about Kathleen’s estate finances being in disarray, Michael Peterson hit the roof. He felt publicly humiliated, and was furious that the newspaper reported specifics about their bills being unpaid from places such as Toys “R” Us and US Airways. The last thing Peterson needed was a public perception that he and his wife were in financial straits. He shot off an e-mail to Caitlin, insisting that she clear up the problem. As the administrator, Michael wrote, it was her responsibility to settle the credit card debt and any other outstanding bills.
Michael wasn’t just angry, he was irate. He wrote that Kathleen would have been “out of her mind” if she had been alive to read about such shame being brought to the family. He wrote that he’d been very “polite” and had tried to keep silent about things, but now, he told Caitlin, “this estate matter better get unfucked immediately.” And if Caitlin didn’t take care of the problem, Michael threatened, he would go to the police to report the $100,000 worth of jewels and furs that were missing from his wife’s belongings. In the e-mail, Peterson suggested that the $100,000 worth of missing merchandise could easily pay for all the estate debts.
The only problem was, when the “missing” estate items were accounted for, all that was taken from the Cedar Street house were a few Louis Vuitton and Gucci handbags, Kathleen’s pearls, and some small pieces of matching jewelry. Caitlin had these items appraised, and, apart from the sentimental value, she had been informed that the jewelry was not worth much.
The pearls, which Michael had bought at an estate sale and were supposedly owned by Lana Turner, weren’t authenticated. They were the pearls that her aunts had given to Caitlin after her mom’s wake. It was at that time that Caitlin also received her mom’s designer handbags. The items hardly added up to tens of thousands of dollars. And aside from that, Michael was wrong in thinking these possessions were his. It was Caitlin who had a right to keep the goods, by law. Caitlin Atwater was the administrator of the estate, and she had already placed her mother’s pearls and jewelry into a safe-deposit box, waiting for the estate to be settled.
Caitlin Atwater hadn’t done anything illegal. Caitlin hadn’t caused trouble for the estate, nor had she stolen anything. Her aunts were the ones who suggested that Caitlin take a few of her mom’s handbags, but Caitlin had left the Cedar Street house with very few mementos from her mom. Mostly, Caitlin packed her own personal belongings, her sentimental stuffed animals, her favorite summer and winter clothes. Caitlin had never tried to set foot in the house after the Christmas season was over. The place gave her the creeps. She never wanted to go back there.
But in his e-mail to Caitlin, Michael ranted and raved, trying to make her feel guilty, holding her responsible for the problems she and Kathleen’s other family members were causing him in the media. Michael said that his silence was over. He seemed ready to strike back at Kathleen’s family, and not only was he planning on “going public” about the “missing” goods, he was also threatening to report Caitlin’s aunt Candace to the Internal Revenue Service.
It seems Candace Zamperini, in her rage over Henry Lee’s appearance on 20/20, wrote an editorial in which she called Dr. Lee “hired help.” In retaliation, Michael was ready to file a report about Candace’s South American housekeeper, Jean, whom he thought the IRS people would be interested to learn about. The thing was, Candace was paying her housekeeper on the books. She was filing tax returns and doing everything on the up-and-up.
But Michael Peterson didn’t know that.
He just assumed his threat was valid.
In his lengthy e-mail, Michael berated Caitlin for refusing to watch 20/20, telling her that she, more than anyone, should have been interested in what Dr. Lee had to say concerning her mother’s death. Michael wondered if anyone honestly thought Dr. Lee would compromise his reputation for a few bucks involving a case in Durham, North Carolina. He told Caitlin that she should listen to Dr. Henry Lee, rather than “the idiots” who investigated the case.
Michael blamed the cops for destroying the family that Kathleen had spent so many years putting together. As Michael had predicted from the beginning, and as Todd had predicted, it was no surprise that Caitlin had turned on him. Michael felt Caitlin was being hypocritical. In his view, Caitlin’s public comments and her behavior were mind-boggling. Michael wanted to be spared the “horseshit” about 20/20. He claimed that Caitlin’s mother would have been much more upset about her autopsy photos being released to the press than about her house being shown on 20/20. Michael was certain that Kathleen wouldn’t have cared one bit about Dr. Lee being on their staircase.
Michael wrote that he knew Caitlin was in agony. He was sorry that things had turned out to be so dreadful. He still wanted Caitlin to contact her sisters—he insisted that Kathleen would want that. And he claimed that, no matter what, he still loved Caitlin.
But for all the love he supposedly had for Caitlin and Kathleen, Michael was acting in ways that were completely contradictory. From the moment Kathleen died, it was one thing after another. For starters, Michael was refusing to pay for Kathleen’s cemetery plot. The place Caitlin and Candace had chosen to bury Kathleen happened to be in the old part of the Maplewood Cemetery, and therefore required a family purchase of four plots. For some reason, Michael felt the estate should pick up the tab. Michael apparently didn’t like the idea of dealing with headstones and grave plots, and he wrote a separate letter to Kathleen’s estate. In this epistle, he explained that he was “philosophically opposed” to any kind of burial and he preferred cremation.
Caitlin was mortified when she received a copy of Michael’s letter, reading in his own words that he was refusing to pay the funeral bills. He was leaving it on the estate to sort out the matter of all the funeral expenses: Kathleen’s monument, burial plot, as well as the unpaid $800 flower bill, which Michael said had been placed under his name, without his permission. Michael had written to implore the estate to pay the bills, particularly the bills for Kathleen’s coffin and flowers.
If the estate couldn’t come up with the money, Michael Peterson claimed he was ready to contact the police, and possibly his insurance company. Michael didn’t care about the Citibank claim, but he certainly did care that Kathleen’s funeral matter be settled, even if he had to loan the estate some money himself.
Caitlin was horrified by the details in Michael’s correspondence, both to her and to the estate. It was one of many times that Michael was using the memory of her mother to haunt her, to make her feel like a disrespectful and dishonest person. Caitlin wasn’t really familiar with paying estate bills. She hadn’t let things slip on purpose; she just had too much on her plate. Dealing with attorneys and all the legal mumbo jumbo, especially when it involved both civil and criminal aspects, was too much for her.
She was still a kid. And she was grieving and in shock.
Caitlin felt terrible that her mom’s grave site had become cause for argument, that there seemed to be no peace for her mom’s soul. With the constant news items, the brewing legal battle, and Michael’s weird behavior and threats, her life was becoming a living hell.
The worst of it was, even though Caitlin had seen the circumstantial evidence, a part of her wanted to believe in Michael’s innocence. There was a part of Caitlin that had a soft spot for Michael, and she found herself remembering all the good years, all the vacations, all the holidays, the fun times.
But Caitlin would continue to discover that Michael was not the quality man he made himself out to be. There were more and more bizarre things coming to light about Michael. For instance, Michael Peterson had collected $347,000 from Nortel, just weeks after Kathleen’s death, but when it finally came down to paying the funeral bills, it was Caitlin’s dad, Fred Atwater, who laid down the cash to pay for Kathleen’s gravestone monument.