Last Updated: Thursday, June 22, 2000, 2:15 p.m.

Fitzhugh investigation focuses on money

by Jennifer Kavanaugh

Palo Alto police detectives have targeted Kenneth Fitzhugh's financial dealings--and possible money problems--as they search for a motive in the killing of his wife, according to police documents released to the public Wednesday.

The search warrants and related documents filed by Palo Alto police don't state conclusively that financial problems led to the killing of Kristine Fitzhugh on May 5. But taken together, the records show the keen interest detectives had in the Fitzhughs' finances and set the stage for the prosecutor's arguments in the case, scheduled to return to court Friday.

In the records, which were unsealed Wednesday at the North County Courthouse in Palo Alto, Detective Mike Denson, the lead investigator on the case, states the Fitzhughs refinanced their Southgate home several times since buying it almost 20 years ago. According to the documents, Fitzhugh also applied for another refinancing loan the day before his wife's death.

Denson added that Fitzhugh had bounced checks on several occasions and once fell behind in paying his taxes.

"I believe that it is likely that one of the motives for the murder was financial," Denson wrote in a motion seeking access to the family's financial records. The detectives seized bank records and computer equipment belonging to the couple.

Deputy District Attorney Michael Fletcher is expected to present this and other information at the preliminary hearing Friday in Palo Alto. For the judge to allow the case to proceed to trial, Fletcher must prove a crime has occurred and show probable cause that Fitzhugh committed it.

Fitzhugh pleaded not guilty to the crime last month. He is in the county's main jail in San Jose on $10 million bail. His attorney did not return a phone call for this story.

By law, district attorneys do not need to establish motive to successfully prosecute a murder case. However, the presence or absence of a known motive can affect a trial's outcome.

The brutal killing of Kristine Fitzhugh and arrest of her husband have baffled members of the Palo Alto community, many of whom recall the Fitzhughs as a loving couple.

Kristine, a music teacher for the school district, was found dead on her basement steps after missing her afternoon class. Though Kristine's death was originally reported as an accidental fall, the coroner determined someone had strangled her and beat her over the head with a blunt object.

Police say Fitzhugh killed his wife in their kitchen and moved her body to the basement, staging an accident.

The first public rumblings about a possible financial motive emerged during Fitzhugh's bail hearing on June 9, when it was revealed that Kristine had a $48,000 life insurance policy, with her husband listed as the beneficiary. Fitzhugh's attorney, Thomas Nolan, said it was ridiculous that anyone in Palo Alto would kill for only $48,000. Fletcher replied the insurance payment would double if Kristine's death were ruled an accident.

The newly released documents also show the scope of the detectives' investigation into the Fitzhughs' lives. The police got a search warrant for the couple's cell phone records and access to their voice mail system. The police also removed blood-stained sections of the kitchen floor and walls from the couple's Escobita Avenue home. And according to the records, the police were also looking for Kristine's personal journal and a ring belonging to Fitzhugh.

The coroner said Kristine was hit by someone wearing a ring.