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Finances continue to dominate novelist's murder trial

By John Springer

Defendant Michael Peterson, center, seen in a recent appearance during his trial.
Defendant Michael Peterson, center, seen in a recent appearance during his trial.

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DURHAM, North Carolina (Court TV) -- Some jurors took copious notes. Others removed eyeglasses to rest weary eyes. A few appeared totally lost.

Tuesday was another day of high finance and reams of testimony about assets, debts and stock options at Michael Peterson's first-degree murder trial. Prosecutors must prove that the successful novelist killed his wife Kathleen on December 9, 2001, but they focused much of the trial's opening days on his alleged monetary motive instead.

Prosecutors contend that Michael Peterson was in debt and killed his wife of five years for her $1.8 million life insurance policy.

Jurors learned Tuesday from prosecution witness Raymond Young that the Petersons were spending $100,000 a year more than they made during each of the three years before Kathleen Peterson's death at age 48. Young presented the same information in court Monday outside the presence of the jury.

Using a large notepad and marker, Young, a North Carolina State Bureau of Investigation agent, explained that he looked at the couple's five checking accounts, examining every check and deposit ticket for 1999, 2000 and 2001.

Young also testified that, when Kathleen Peterson died, the Petersons were carrying more than $142,000 in credit card and credit line debt spread across 20 active accounts.

The defense objected, unsuccessfully, that Young's credit card information, essentially a report of a report, amounted to hearsay testimony. The defense also complained that Young did not distinguish between different kinds of expenses, such as recurring bills and discretionary purchases, during his analysis of the Petersons' cash flow.

Judge Orlando Hudson Jr. told defense attorney David Rudolf that the defense could challenge Young's methodology during cross-examination.

The defense did.

Peterson's attorney pointed out that Young had counted checks written to buy stocks as expenses, but didn't count the sale of those stocks as "normal" income. Rudolf also questioned Young about why he did not account for the thousands of dollars that flowed through Kathleen Peterson's accounts when Nortel Networks, her employer, reimbursed her for business expenses.

During arguments to keep the financial evidence out of the trial, the defense maintained that the whole exercise was misleading, a numbers game intended to lead jurors to the facile conclusion that the Petersons were living beyond their means. Using Young's own figure of the couple's assets, mortgage liabilities and credit card debt, the defense showed that the Petersons had a combined net worth of more than $1.4 million.

"As they sat there that December weekend, even with your analysis, this couple was worth more than $1.4 million, isn't that correct?" defense lawyer Thomas Maher.

"That's right," Young replied.

By presenting evidence of a possible financial motive so early in the trial, the prosecution appears to be holding its physical evidence in reserve. Forensic experts are expected to testify that the nature and number of Kathleen Peterson's head injuries, and the amount and location of blood were more consistent with a beating than a fall.

Defense experts are expected to argue the opposite.

Another staircase death

It is uncertain whether the state will try to introduce evidence of the 1985 death of Elizabeth Ratliff, a neighbor and friend of the Petersons when they all lived in Germany. Like Kathleen Peterson, Ratliff was found dead at the bottom of a staircase.

German and U.S. military investigators had concluded that Ratliff died from a stroke that had probably contributed to her fall. On Tuesday, Rudolf complained to the judge that the prosecution had only recently turned over a May 29 statement from an Army investigator in the Ratliff case.

In the statement, investigator Steven Lyons wrote that he had not seen a large amount of blood where Ratliff fell. "My examination discovered nothing that would lead me to believe that Ratliff's demise was from anything but natural causes," Lyons wrote.

Rudolf said the statement supports his client's case, and he would have referred to it in his opening statement July 1 if the prosecution had turned it over sooner. Durham District Attorney Jim Hardin Jr. countered that the statement is not exculpatory -- that it aids the defendant -- and is inconsistent with other witnesses' recollections of the scene at the Ratliff home.

Hudson will decide later whether the statement should have been turned over, but he reminded Hardin of his duty to promptly provide the defense with exculpatory information.

Whether the prosecution will pursue the Ratliff evidence, and whether the judge will allow it, is the subject of growing interest. Although the initial finding was that Ratliff's death was from natural causes, her body was exhumed in April at the request of the prosecution. A second autopsy done in North Carolina concluded that Ratliff died from blunt force trauma during a homicide, not by natural causes.

Elizabeth Ratliff's daughters, now adults, went to live with Michael Peterson after their mother died and refer to the couple as "Dad" and "Mom." They support the 60-year-old defendant's plea of innocence. Caitlin Atwater, Kathleen Peterson's daughter from a previous marriage, believes Michael Peterson is guilty and is suing him for wrongful death.

In other testimony Tuesday, a former colleague of Kathleen Peterson's at Nortel testified that the defendant's wife sounded fine in a phone call a few hours before her death.

The witness, Helen Prislinger of Ontario, Canada, was called by the prosecution to testify that she and Kathleen Peterson had talked about Nortel's financial problems and recent layoffs but that nothing seemed out of the ordinary in the Peterson household that night. 

Within six months of his wife's death, Peterson collected $347,000 of Kathleen Peterson's assets, including her 401(k) and pension plans,  but her $1.8 million life insurance benefit is tied up in civil lawsuits between Peterson, Caitlin Atwater and Kathleen Peterson's ex-husband.

If convicted, Michael Peterson faces life in prison.

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