and knapp was ready with a story. he had been babysitting, one of his boys at his ex-wife s house when this incident actually occurred. you d have to pin him down on that, make sure he had proof of it, right? that s correct. reporter: another detective turned on his recorder, as knapp rambled on about his relationship with carol. she and i are, sort of, commited to one another to be co-coaches to coach each other through both our divorces. reporter: but knapp didn t stop there. oh no. he seemed very eager to tell them about carol s ex-husband, steve democker. i ll warn you guys. it s just my intuitive take. the guy comes off to me as a very sneaky, manipulative man. reporter: so by the time steve arrived detectives were already suspicious. and they asked him to come to
750,000 dollars. reporter: steve and carol s daughters, katie and charlotte, were in court, sitting behind, and supporting their father. to have your father accused of killing your mother and for them to not believe it. you can t imagine what that must have done to how they view things. and it s just got to be a horrible experience. and in his opening statement, defense attorney john sears was quick to address that life insurance money. you will hear from katie and charlotte that their father told them from the beginning, this is your money from your mother. this isn t mine. he disclaimed, he signed over any interest to the girls and the money was paid out to the girls. that s what happened in this case. reporter: prosecutor butner called his first witness. katie democker, steve and carol s elder daughter. did she have a habit of things that she did when she came home from work? she did. she typically went for a run maybe four days a week out on
it s a now there s one store that connects your life like never before store. the xfinity store is here. and it s simple, easy, awesome. reporter: steve democker was in jail, charged with first degree murder for his ex-wife carol kennedy s violent death. he pleaded not guilty. private investigator rich robertson joined steve s defense team, and right away saw what he believed was an elemental mistake by detectives. they put together their story, their version of events almost immediately. husband always does it, right? yeah, they focused in on one person and they had a story, and that s what they worked on. they zeroed in on steve democker right from the very beginning. reporter: but robertson said detectives should have taken a much closer look at another man in carol s life, jim knapp.
the man who lived in the guest house and showed up at the crime scene within minutes of the officers. and, who was the first person to point the finger at steve. but the fact that law enforcement viewed him in a different way that they viewed steve democker, that they saw jim knapp as a friendly witness, and they see steve democker as a suspect, frames the way that they investigate. so anything having to do with jim knapp becomes excusable, explained, it s just not something you have to worry about because he s not our guy. reporter: and yet? look, for example, at these crime scene photos of carol s kitchen counter. this magazine was sitting on it, and slipped inside, between the pages, were some financial documents that were printed the very day carol was murdered. that became really important because his thumbprint is on those financial documents. reporter: what was jim knapp
reporter: so, had the insurance paid out or hadn t it? sechez took another look, a much harder look at the money trail. not only was the insurance paid out, but it was paid to the two daughters who then transferred it to several accounts, including wire transfers to mr. democker s parents account in new york, who then wire transferred it back to mr. democker s defense team. reporter: remember steve democker was a highly-paid financial adviser. the prosecutors now believed he was using that expertise to try to get away with murder. here is a person that murdered his ex-wife then collected her life insurance of over 750 thousand dollars and is using that life insurance to pay his defense team in the murder prosecution. so then prosecutors added fraud