Killer On The Loose

Was Walter Waldhauser/ Michael Davis tipped about his latest arrest warrants?

Despite Waldhauser/Davis's reputation as a con artist, two parole board members approved the request for him to remove his monitoring device. Those board members, from the department's Palestine office, are James Paul Kiel Jr. and Sandie Walker -- both appointed by Governor George W. Bush.

A parole board spokesperson defended the action to drop Waldhauser/Davis from close monitoring. She says the standard department procedure is to remove a parolee from the electronic device if he maintains a clean record after 60 days. Waldhauser/Davis wore the monitor for more than 90 days.

However, the department policy also gives parole officers the discretion to recommend electronic monitoring for up to 180 days. Records also show that after Waldhauser/Davis missed his May parole appointment a parole officer went to Waldhauser/Davis's home on both May 27 and 28. He was not home on either date, but no arrest warrant was issued until June 10, almost two weeks later.

Meanwhile, parole officials in Dallas say that to "the best of [their] knowledge" no one in that office tipped Waldhauser/Davis or his attorney to the arrest warrant. (His lawyer did not return calls from the Press.)

State insurance investigators decline to comment. But they are described as furious that parole officials would not alert them that they had obtained an arrest warrant of their own. Insurance investigators believe the parole department knew of the insurance probe into Waldhauser/Davis, although Dallas parole officials say they were unaware of it. A Houston parole spokesperson says she was aware of the probe but did not pass that information on to her counterparts in Dallas, instead assuming that was the responsibility of the state investigators.

It's all enough to make Johnny Bonds -- Waldhauser/Davis's foremost nemesis -- spit.

"I think eventually he'll be arrested," says Bonds. "I hope this mix-up with the [parole revocation] warrant wasn't something that was done intentionally. If it was done intentionally, somebody should be fired."

Almost two decades ago, Bonds brought Waldhauser/Davis to justice. Now an investigator with the Harris County District Attorney's Office, Bonds was a Houston homicide detective when the capital murder case started in July 1979.

Police found the bodies of John and Diana Wanstrath and their adopted infant son, Kevin. All had been shot to death in their Memorial-area home. Although no murder weapon was found at the scene, Harris County Chief Medical Examiner Joseph Jachimczyk mistakenly ruled that Diana Wanstrath had killed her husband, her son and herself.

It took two years of intense investigation, but Bonds eventually proved that the deaths were a contract hit. Markham Duff-Smith had not only arranged the deaths of his adopted sister Diana and her family, but had also had his adoptive mother, Trudy Zobolio, killed four years earlier. The medical examiner's office botched Zobolio's autopsy by ruling it a suicide as well.

In 1981 a Harris County jury convicted Duff-Smith of murdering his mother and sentenced him to death. He was executed in 1993. The triggerman, Allen Wayne Janecka, is on death row awaiting execution.

Waldhauser/Davis put Duff-Smith and Janecka together in the murder scheme and was an active participant in the Wanstrath killings. He avoided the death penalty by pleading guilty to three counts of capital murder in exchange for his three concurrent 30-year sentences. He was released from prison in 1990 and placed on parole until the year 2010.

Almost immediately after his release, he changed his name to Michael Lee Davis and went to law school in Arizona. His plans to become an attorney were upset when law school officials learned of his sordid past.

In early 1997 Waldhauser/Davis surfaced in Dallas when he befriended Garland police officer Bruce Marshall while the two were students in a night biology class at Richland College. Because Davis was so elusive about his past, Marshall decided to find out more about his new companion. To his horror, he eventually discovered that the man who had been to his home on several occasions was a convicted capital murderer who, through the viatical industry, had found a new way to profit from the deaths of others. Marshall contacted Bonds.

"I originally thought that he was probably killing people," says Bonds. "Insuring them and killing them. I'm glad to find out that's not what he was doing. But I assumed he was doing something illegal, and it proved out that he was."

The arrest warrants obtained by investigators from the Department of Insurance provide little detail about the allegations against Waldhauser/Davis. He is accused of insurance fraud -- committing a first-degree felony by using deception to secure execution of a document valued at more than $200,000. Five more charges allege first-degree money laundering, each involving more than $100,000.

However, a source close to the investigation says the actual of insurance fraud by Waldhauser and several other suspects totals more than $1 million and that the scam involves accounts in several offshore bank accounts.

State District Judge Henry Wade Jr. of Dallas refused to release the report that details the evidence amassed by police to gain the arrest warrants. He says that the "probable cause" report will not be public information until police arrest Waldhauser/Davis.

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