I'll Take Care of You (4 page)

CHAPTER 3

The morning after Bill McLaughlin was murdered, Nanette took his son, Kevin, out for breakfast at Denny's. Kevin found this unusual because she'd never offered to do that before. Despite his speech difficulties, she told him that he was the one who needed to call his sister Jenny to tell her what had happened.

Doing as he was told, Kevin tracked down Jenny at work.

“Are you sitting down?” he asked.

“Yes, what's going on?”

“Dad's been shot.”

“Is he okay?”

“No, he's dead.”

“How did this happen?”

“I don't know. Somebody shot him.”

“Okay, where are you?” Jenny asked. “I'm going to come get you. We're going to figure out what's going on.”

“I'm at the beach house with Nanette.”

With that, Jenny immediately left the high school where she was teaching and called Nanette for more details on her way to the Seashore house, where she planned to pick up her brother and take him back to Balboa Coves.

Jenny thought the ensuing call was very awkward and oddly short.

“Is it true?” she asked Nanette. “Kevin called me and said our dad's been shot.”

But Nanette had very little to say other than to confirm what Kevin had said.

“Yeah, it's true,” she said. “It sucks. It really sucks.”

Worried this might be a trap, and that the shooter might be lurking around and would try to shoot them, Jenny asked Nanette to have Kevin meet her outside the beach house. Then Jenny called her mother, who, in turn, called Jenny's sister, Kim.

It was late in Tokyo when Kim got the call, just in from a night out with a friend. By that point, their mother was already making arrangements to fly to Newport Beach, where she ended up staying for several months, sleeping in the room she'd once shared with Bill, so she could take care of her disabled son and try to hold her grieving family together.

 

 

As Jenny pulled up to the house in her gold Mercedes, Kevin was just coming out the front gate. Jenny was stymied why Nanette only peeked out the front door and then shut it quickly without coming outside to speak to her, console her, or try to share in their grief.

After striking out with Nanette and Kevin for more details, Jenny decided to go straight to the police. She arrived at Balboa Coves with her brother just after 9:00
A.M.
Finding no detectives, she headed over to the station, where she found Van Horn and Voth, who had been trying to reach her too.

Like Kevin, the only person Jenny could offer as a possible suspect was Jacob Horowitz.

Asked about her father's relationship with Nanette Johnston, Jenny said she knew of no problems, even given the difference in their ages. As far as she knew, her father wasn't seeing anyone romantically besides Nanette.

Anyone with access to keys was a suspect at that point, so the detectives asked Jenny where she'd been around nine o'clock the night before. She said she was horseback riding with a couple people at the Nellie Gail Ranch in Laguna Niguel. Afterward, she headed home to visit with some friends, until nearly 11:00
P.M.
After confirming her alibi, the police had Jenny take a lie detector test. She passed, as did her sister, Kim. Detectives crossed them both off the list of possible suspects.

 

 

Meanwhile, Nanette called her ex-husband, K. Ross Johnston, to tell him what had happened.

“Bill has been shot,” she said.

“I'm sorry to hear that,” K. Ross said. “Is he going to be okay?”

“He's no longer with us.”

“Oh, I'm sorry. I didn't know.”

Nanette explained that Bill had been killed at the house after Kristofer's soccer game, while she was out shopping, and she had receipts to prove it. But she said the police would probably be calling him to confirm her “alibi” all the same.

“When they do, you don't need to tell them anything about Eric, because he's not involved,” she said, referring to Eric Naposki, the professional linebacker and nightclub bouncer whom she'd been bringing to Kristofer's games for the past eighteen months.

Kevin McLaughlin didn't have anywhere to go that Friday. Because the police were still processing the house for evidence, they didn't want him wandering around, so he rode his three-wheeled bike around the community, presumably looking for Goldie, the family's golden retriever, who had run off after the murder. Nanette had to call Animal Control to see if they could find her. The dog turned up a couple of days later.

Told for the second consecutive night that he couldn't stay at the Balboa Coves house, Kevin called his girlfriend, Sandy Baumgardner, who worked in pharmaceutical sales, around four o'clock to come get him.

“Someone came in last night and shot my dad,” Kevin said.

Sandy heard someone in the background telling him not to say anything more. “Who is that talking to you?” she asked, confused.

“That's Bill,” he said.

Now she was even more confused.
I thought he just said Bill was dead,
she thought.

“Put me on with Bill,” she ordered.

Sandy could hear Kevin explaining who she was to a man who then took the phone and identified himself as Detective Bill Hartford.

“What happened?” she asked.

But Hartford didn't say much. Sandy wasn't sure that Bill McLaughlin was dead, but she suspected as much because the detective was being so cagey. She immediately called her father, a college buddy of Bill's, who split his time between Newport and Colorado Springs.

“I think Bill McLaughlin was murdered last night,” she said. “I'm going down there and I'll call you back when I know more.”

As soon as she arrived at Balboa Coves and saw the yellow police tape around the house, her suspicions were confirmed. Hartford met her out front, lifting the tape so she could get under it.

“Whoever did this had intimate knowledge of his schedule,” Sandy said.

Hartford seemed irritated that Jenny had dropped off Kevin and left him there all day, because he couldn't be left alone while the detectives were trying to work.

After talking briefly with the police, Sandy took Kevin to the house of a family friend who had done business with Bill and was a surfing buddy of Kevin's.

“There's only one person who stood to gain from this,” the friend said. “Nanette.”

CHAPTER 4

After interviewing Jenny McLaughlin, Detectives Voth and Van Horn headed back to Balboa Coves to continue their search for evidence at the house.

Voth looked for the spare keys in the dock box on the rear patio, but the box was empty. He hadn't expected the shiny keys left by the killer to be from there anyway, because they showed no signs of rust or salt corrosion.

In an interview that afternoon at the station, Nanette told detectives that she'd met Bill in early 1991 while in-line skating on the boardwalk, where they were introduced by some mutual friends. Only she couldn't remember their names.

As they reviewed her activities the night of the murder once more, she mentioned that “we” left the soccer game around 8:00
P.M.
However, the detectives apparently didn't catch her slip of the tongue, perhaps because she didn't mention
with whom
she had left.

Pressed for more details about her role in Bill's finances, she said that since they'd been together, Bill had given her increasing control over his money, including making her a trustee of one of his accounts.

Jacob Horowitz, she said, was one of Bill's former scientist employees who had helped Bill develop his blood-plasma separator. After an internal dispute with Horowitz, Bill and his partners bought out Horowitz, then sold the company. Bill had been receiving royalties from that sale, but several “nuisance” suits by Horowitz had blocked the flow of money, she said. Just recently, however, Bill finally heard he'd won the legal battle.

His Swiss bank account was the only one she didn't know much about, but she thought it had been established because of concerns about the recent IRS audit. Elaborating on most of his five life insurance policies, she said one was for the trust, one was for the family, one was for the business, and one named her as the beneficiary. But she claimed not to know the value of the payouts, which detectives later learned came to a total of $9 million.

They also learned that Bill had taken Kevin out of his will, apparently because Kevin's government-funded medical costs would no longer be covered if he came into an influx of money. With this in mind, Bill had set up a special-needs trust to take care of Kevin's medical costs and monthly bills. This would also continue his eligibility for public-assistance programs, such as Dial-a-ride and speech therapy programs, which were important because Kevin had already capped out his insurance after the accident. The trust was designed to kick in if and when Bill died.

Nanette told detectives that she'd been concerned about Bill's recent dealings in the gun market, and she gave them the name of his gun dealer.

Asked about Bill's usual habits, she gave them a general rundown: He usually left for Vegas on Tuesday or Wednesday and returned Thursday or Friday, almost always during daylight hours. He never filed a flight plan. He normally wore the blue robe he'd been wearing that night. He typically drank four to five beers around dinnertime and maybe some wine with dinner. (Curiously, the glass where he'd been sitting at the dining table contained hard liquor.) They rarely used the alarm system in the house, unless they were on vacation. When he was in Las Vegas, he didn't gamble. And she didn't know anyone else with whom he had regular contact there other than his Realtor, David Mitchell.

She also said that a number of keys to the Balboa Coves house hadn't been returned by workmen, such as window cleaners, gardeners, and painters, but she hadn't copied any keys herself. Nor did she know where Bill would have had any made.

“You can call me anytime,” Nanette said. “I want to help in any way that I can.”

When her gunshot residue test came back, her hands were clean.

CHAPTER 5

That Saturday morning, December 17, the first news story hit the local paper, stripped across the front page. Few details were released and no suspects were cited in the
Daily Pilot
story, which said,
Police were tight-lipped about William Francis McLaughlin's death, citing a need to protect their investigation.

The NBPD wouldn't even acknowledge that the divers seen combing the waters behind the house were part of the homicide investigation. But, in fact, two sets of divers scoured the channel for a day and a half, looking for the murder weapon. One was a team of Newport Beach lifeguards and the other was a U.S. Navy dive team, stationed in San Diego, that used metal detectors to search through the thick marine grass covering the channel floor.

In the article, Bill was described by neighbors as
a physically fit man who would jog through the complex, and when a homeowners' association fund fell short of the kitty needed to install the community security gate in 1990, McLaughlin was among the residents who made an additional donation.

Although neighbors said Bill had been affectionate with Kevin at a homeowners' association party, they also said they found Bill and his family to be “standoffish,” because they hadn't socialized much with neighbors over the two decades they'd lived in Balboa Coves.

The regional paper, the
Orange County Register,
also played the story on its front page, with the headline
NEWPORT MILLIONAIRE SLAIN IN GATED HOME
.

“He was a really nice guy,” twenty-six-year-old Jenny McLaughlin told the reporter. “This has always been a really quiet neighborhood, but who knows.”

Citing court records, the article characterized Bill and Sue's divorce as “bitter,” noting that she'd gotten a restraining order to stop him from transferring any holdings and from calling her early in the morning to bully her into taking a payout of $1 million of his “hard-earned money.” If she didn't, he'd threatened to take “unpleasant tactics.”

He's very controlling and domineering,
Sue's filings stated.

In Bill's filings from May 1990, he explained that Sue
should not be given any direct control over any of the property.
He needed full control over all of it, he said, as leverage for business purposes or his investments would fail. He offered to pay his wife $5,000 a month for living expenses.

Bill also explained that the two 8:00
A.M.
calls he'd made to her were never intended to harass her, only to save money on long-distance rates. He said he'd been threatened with legal action since 1989 by a former business partner, presumably Jacob Horowitz. Someone had been trying to serve him with papers, and he was simply trying to find out if it was Sue's representative or someone else. He said he also wanted to question her about whether the $11,000 in charges on that month's MasterCard bill were real or “unsubstantiated,” as they'd been the previous month, when he'd had to cancel the credit card.

He said he'd started setting up a number of trusts to protect their assets from this litigation, including a Cook Islands Asset Protection Trust, as well as a living trust and an asset protection trust for his separate property after Sue had left the “family home.”

Just as he later did with Nanette, it had been his practice with Sue to give her a certain amount to pay the household bills.

Since I handled all the business of the community, all she would have to do was tell me how much she needed to run the household each month and I would give it to her,
he stated in court papers.
In this manner, I have provided substantial payments to my wife each month over the past several years. I never asked on what these moneys were spent even though I felt they were rather excessive.

These filings indicate that Bill watched his money quite closely when Sue was managing the household. This begs the question whether Bill trusted Nanette so much that he blindly let her manage the bills and appointed her as a trustee to his estate, or whether he was still keeping an eye on things and could have figured out what she was doing just before he was killed, as his brother Patrick suggested.

Although Nanette may have thought Bill had trusted her completely, it's possible that she didn't understand how these trusts and his estate worked as well as she'd thought. She also may not have known that Bill had designated a close friend to be the “protector” of his estate, which meant that the friend had the power to correct or change any of Nanette's actions relating to the living trust.

In his divorce declaration, Bill estimated the value of his estate at only $8.15 million, including $3.9 million cash in the bank. He listed $9.43 million in “liabilities,” including money that he figured he would have to pay Jacob Horowitz, who later cited these documents as proof that Bill knew he owed him money when the two were fighting in civil court.

In the end, Sue got to keep the Hawaii home, valued at $2.5 million, as part of a $4.5 million package that included a 1986 Isuzu Trooper and annual payments of $300,000. Bill kept a twenty-one-acre avocado ranch in Fallbrook (valued in 1990 at $690,000) in neighboring San Diego County, the Balboa Coves house (valued at $600,000), and his two homes in Las Vegas. He also kept his airplane, two boats, two Mercedes cars, and a 1986 Chevrolet station wagon. In addition, he held on to all future earnings and royalties from the Plasmacell-C device.

Because Bill's character flaws and his total worth were cited in public divorce papers, they ended up in the newspaper and being batted around by neighbors and former business associates, which further upset his children and close friends.

Reporters were also using the divorce file to track down Sue and question her, so she had the records sealed. However, some of the documents still remain today in the archives of an Alameda County courthouse, where they were filed as part of Horowitz's several lawsuits against Bill and Baxter Healthcare, which were still pending when he was murdered.

 

 

Bill McLaughlin's slaying rocked the tiny bedroom community of Balboa Coves, where residents were rattled that such an incident could happen within the perceived safety of the gates. This was the kind of place where the well-off moved to get away from the dangers of urban life and the riffraff that went with it.

“People came there to avoid getting their front door kicked down and shot,” Dave Byington, the retired homicide sergeant, recalled recently.

But this case also had an air of intrigue and mystery. The shots were fired at close range, and the shooter left behind the bullet casings, which the police saw as a clue because the killer must have known that he (or she) had left no fingerprints on the shells. Early on, however, the police kept these details secret, which left the neighbors frustrated by the lack of cold, hard facts.

“No information is available, so everybody is guessing,” Stan Love, a leader of the homeowners' association, told the
Los Angeles Times.
“It sounds like somebody was mad at [Bill].”

The impact of the incident wasn't contained by the chain-link fence surrounding Balboa Coves—the entire city of Newport Beach was buzzing about it.

“It was big news in Newport,” Byington said. “He's a millionaire. Initially they were truly shocked because this just doesn't happen in Newport. . . . It was fodder for the local papers' front page forever.”

Bill's neighbors were, in fact, living under a false sense of security. The police figured that the killer used the shiny pedestrian-access key to get in. Then, after dropping it, he must have escaped via the abutting Newport Channel, in a car driven by an accomplice, by jumping the fence and running away, or through the pedestrian gate, left purposely ajar. In those days, all you had to do to get through the main entrance gate was punch in a simple code and drive in.

It didn't take detectives long to determine this was no random killing. Because so few people had copies of the keys the killer had left behind, detectives were pretty confident within a day or so of the murder that this was an inside job. So they promptly started surveilling both of Bill McLaughlin's homes in Newport Beach, where they watched Nanette come and go—and they kept an eye out for any suspicious characters to show up.