Killer On The Loose

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

However, about the time the agents from the Department of Insurance began their investigation, the Press was contacted by an HIV-positive Dallas attorney who says he was one of those approached by Waldhauser/ Davis through contacts at the AIDS Resource Center of Dallas. The attorney, who asks that his name not be used, says he refused to participate in the scam but that several of his HIV-positive friends did.

According to the attorney, his friends would pass themselves off to insurers as being HIV-negative, then obtain life insurance coverage of $100,000 or more. After taking out the policies, Waldhauser/Davis would make the monthly premium payments for them until he could find a buyer for the policies.

Early last year, the attorney says, he was lunching at the AIDS center when two longtime friends approached him about the scheme by Waldhauser/Davis's company.

"Southwest Viatical gave them money for the initial premium," the attorney says. "That money then went into the individuals' checking accounts, which they then used to pay the insurance company. Southwest paid the premiums directly after that. All you had to do was say you were not HIV-positive."

After the state-required two-year waiting period, if the insurance company did not discover that those insured were HIV-positive, Waldhauser/Davis and Southwest Viatical would buy the policy, says the attorney. He adds that he told his friends that what they were suggesting amounted to fraud, but several of his associates got in on the scheme.

He says some of the policies were sold to elderly investors who did not realize that people are no longer dying from AIDS as fast as they once were. The buyer of the policies has to pay for the premiums until the insured dies, so some viatical investors found the business to be a losing proposition.

"After the Press article came out, I told my friends that it was obvious they were dealing with real crooks," says the attorney. "But at that point they didn't want to talk to me."

The attorney says he is unsure how many people were involved in the scheme; he says he didn't want to know. Many of them, he says, bought multiple policies and were paid as much as $5,000 each time a policy was sold to an investor. The attorney says he was under the impression that some officials of insurance companies were also in on the fraud.

A Dallas County grand jury is expected to start hearing evidence in the fraud case this week, as the search for Waldhauser/Davis expands.

Andy Kahan, director of victims' assistance for the City of Houston, deplores the way the criminal justice system has dealt with the confessed capital murderer.

"Since Waldhauser's release [from prison], there has been one illogical event after another, so why would I expect a simple arrest on a warrant and law violations to be any different?" says Kahan. "The fact that he was apparently tipped off, and that life was about to change as he knew it, adds to the absurdity of his whole criminal career."

Kahan points out that Waldhauser/Davis has used multiple Social Security numbers over the past several years, a fact that will add to the difficulty of tracking him down. He says that task would be easier for officers if the Board of Pardons and Paroles had granted Kahan's request for them to require Waldhauser/Davis to use his original name.

"I hate to say we told them so, but we told them so," says Kahan.
Ellen Davidson, who was best friends with the late Diana Wanstrath, also was troubled by Waldhauser/Davis's eluding justice. Like Kahan, Davidson says that, given his track record, she's not surprised that he has once again outsmarted the law.

"For [the Board of Pardons and Paroles] to remove him [from electronic monitoring] knowing that this guy had to be up to something is just unconscionable," says Davidson. "It's not like this guy was on parole for stealing hubcaps. This man is responsible for the deaths of four beautiful, innocent human beings. And I'm very, very angry. And right now he's laughing at everybody in the system.

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