Horowitz confirmed that he knew of others who had also been involved in litigation with Bill, but he declined to elaborate or speculate, noting that it was a matter of public record. He also declined to discuss his personal relationship with Bill or whether he felt bitter toward Bill. Even though he had no attorney present, he said, he believed he’d already answered the detectives’ questions about his business relationship with Bill as truthfully and fully as he could.
As for any character discussions, he said, “I wouldn’t have anything complimentary to say,” so he preferred to say nothing.
He acknowledged that Bill’s death did surprise him initially. “It’s a shocking thing. And I’m sorry to hear it.” But upon reflection, he said, he wasn’t all that surprised.
“The way he conducted himself or his business activities, do you think he would cause someone to go to that extreme?” one of the detectives asked.
“I’m no expert in that kind of thing,” Horowitz said coyly.
Still hoping Horowitz would open up, the detectives said they’d interviewed others who volunteered that they didn’t care for Bill and who also weren’t surprised by the way he died “due to the way he treated other people.”
“If other people have told you that, that does not surprise me,” Horowitz said. “I would not dispute their opinion.”
In contrast, Horowitz described Bill’s ex-wife as a “marvelous, dignified person” and a “nice lady.”
After the detectives confirmed Horowitz’s whereabouts the night of the murder, he was no longer a prime suspect, unless they found some incriminating evidence, such as proof that he’d hired a hit man.
Meanwhile, Detectives Tom Voth and Steven Van Horn drove to Las Vegas to search Bill’s house and to talk with his Realtor, David Mitchell, one of the few people Bill interacted with there.
Mitchell said he’d met Bill several years earlier when he was looking to buy property. He’d sold Bill one home on Harbor Cove to live in and one more as an investment. Since then, he said, they’d become friends.
During a search of Bill’s house, Voth found a safe in the bedroom closet, where Bill kept paperwork for a trust fund that showed a balance of $488,000, as of October 1990. He also found a promissory note, signed by Nanette and dated July 20, 1991, that showed he’d loaned her $35,000. (Detectives later learned that about a month after she’d moved in with Bill, she’d paid her ex-husband, K. Ross Johnston, $28,000 of the $38,000 they’d borrowed from his parents while they were still married.)
The detectives learned that Bill didn’t gamble when he was in Las Vegas, that he belonged to a shooting range where he shot guns as a hobby, and that the phone number of a woman, found on a piece of paper next to the phone, belonged to a friend he’d met through flying.
“It just eliminated the whole potential of [the theory that] he owed way too much money to someone in Las Vegas or he had nefarious activities there,” Voth said.
Back in Newport, Detective Hartford interviewed Bill’s ex-wife, Sue, who said they’d divorced in 1991 after he’d had several affairs, but no more than she could count on one hand. He also had never hit her.
She later told police that when they used to make new house keys, they always had to be reground before they worked smoothly in the front door’s lock. Being so close to the ocean corroded the door locks with salt.
Housekeeper Mary Berg told detectives that Bill had had girls over to the house when Sue was out of town, but she’d never seen him do that since he’d been with Nanette, and she figured she would’ve found indications if he had. Berg described Nanette as incredibly loving and accepting of everyone in Bill’s family, and she had no sense that Nanette was seeing other men.
Berg backed up Nanette’s story that she’d come home to wash Kristofer’s soccer uniform while Berg cleaned the house the day of the murder, and that Nanette had left the house around noon after writing Berg a check. Bill didn’t like to be around while Berg was cleaning, she said, so she tried to stay out of his way.
Hartford also interviewed a neighbor, Rosemary Luxton, who lived across the channel from the McLaughlins. Luxton said she’d heard shots the night of the murder, had looked across the channel for several minutes, but hadn’t seen anyone getting into a boat. Based on this and other neighbors’ observations, the detectives narrowed the killer’s means of escape to be on foot or by car.
CHAPTER 8
There were two camps of opinion when it came to Bill McLaughlin. Some people loved and admired him and thought he was a good, generous man. Others had issues with Bill because of the way he interacted with some of his business associates.
“We heard from some businesspeople that he was a little bit eccentric,” Detective Tom Voth said, explaining that sometimes Bill showed up to meetings wearing loafers with no socks, when everyone else was wearing a suit. “I call it eccentric, or is it a power play?”
Born on October 12, 1939, William Francis McLaughlin was raised by working-class parents on the South Side of Chicago. His father, John “Mac” McLaughlin, worked for the city water department, and his mother, Mae, designed and sold women’s hats at a friend’s store.
Bill had two brothers: Patrick, who was seven and a half years his senior, and John Jr., who was thirteen months older than Patrick. Raised during the Great Depression, the family never had much money, but Bill and his brothers thought it was normal not to have everything they wanted.
One day riding in the backseat of the family car, nine-year-old Patrick said to his parents, “I just love turkey. When we get rich, can we have a turkey for dinner?” And so the next Sunday, Mae cooked a bird, even though it wasn’t Thanksgiving, which was a rare treat.
“[My father] knew what poverty was. He grew up in poverty,” said Kim McLaughlin Bayless. “Once he’d made his fortune, he told us, ‘We’ve got to pass this [wealth] on to those who are less fortunate.’
Bill’s extended family always got together for holidays. As a result, Bill became close with his cousin Barbara, who was about three years older. Barbara said Bill had a strong personality, but he was always personable.
“He would make you laugh. He had a good sense of humor. He wasn’t inward at all. He was fun to be around,” she said. “He was just, to me, a smart, above-average kid.”
Barbara, whose last name is now LaSpesa, also remembered Bill as a good son who loved to tease his mother. “She was crazy about him, being [he was] the youngest.”
She said Bill was always a health nut. “He just watched his intake and what he was eating at all times,” she said. “He always was fit and trim. What he devoured in food was strictly healthy food.”
Bill attended St. Philip High School, a private Catholic school for boys, while Patrick attended public school.
“My brother was much brighter than me,” Patrick recalled fondly.
From early on, Bill’s extended family could see that he was ambitious. “He told me when we were kids that by the time he was thirty, he would be a millionaire,” Barbara recalled. “And here he came from nothing.”
After high-school graduation, Bill enlisted in the U.S. Marine Corps, with the tearful permission of his parents. The teenager, a chronic asthmatic who felt he had something to prove to himself and to his family, went through basic training at Camp Pendleton, in San Diego County.
By the time he came back from training, he’d matured significantly. “I didn’t even recognize my brother,” Patrick recalled. “He was a kid before he left. He looked different, and so was his conduct—he even called me ‘sir.’”
Patrick had been drafted by the army into the Korean War and completed his training program, but to Patrick, that was nothing like what Bill had gone through. “He was truly a marine and always a marine,” he said. “He was truly disciplined, he gained a great deal of respect for life itself, and, I would say, was the utmost gentleman.”
After spending several years in the military, Bill enrolled at what is now known as Loyola Marymount University in Los Ange
les, becoming the first person in his immediate family to attend college, and a private one at that.
There, in the Student Worker Program, he met his lifelong friends Denis Townsend and Ken Baumgardner. He met another lifelong buddy, Don Kalal, through the Pep Band, for which he played the clarinet and saxophone. Bill loved jazz.
The discipline he’d learned in the military carried over into his studies. “Bill is screaming smart,” Sandy Baumgardner said. “My dad said in college he was so disciplined. . . . If he had his nose in books over the weekend, you didn’t want to bother him and throw him off. My dad, Denis, and Bill definitely worked hard for their education.”
Bill had a benefactor, “Mrs. B,” who helped pay his tuition, a favor that he later returned by doing the same for some other students.
Because his asthma had improved so much in college, he stayed in California after graduating in 1964, with a bachelor’s in biology.
“He said his health was always better out there,” said Barbara, who moved to the Bay Area when she got married in 1963.
As the two cousins grew older, they chatted by phone and visited each other occasionally. During this period, she said, Bill dated quite a bit.
“He had a lot of ‘dollies,’” Barbara said, quoting the word Bill used to describe his dates or girlfriends. She also noted that he often brought different women to stay with her and her husband in San Francisco.
“He liked women,” she recalled, and he had a particular “fetish” for blondes. “I remember when we were teenagers, he loved Doris Day.”
All that dating stopped after he met his future wife, Sue, who was a flight attendant and later became a substitute teacher. The whole family approved of her when Bill brought her back home to Chicago.
“[Sue] was a nice, wonderful girl and very pretty,” a kind and all-American–looking blonde, Barbara said.
When Bill married Sue in 1966, Don Kalal was his best man, and he, in turn, was Kalal’s.
Setting his sights on the pharmaceutical industry, Bill first moved the family to Blue Bell, Pennsylvania, in the late 1960s, where he worked his way up to national sales manager for Extracorporeal Medical Specialties, Inc., in a small town called King of Prussia. Extracorporeal made hemodialysis products, such as artificial kidneys and blood-infusion pumps.
But he wanted to get back to California, so he made sure that his next job was on the West Coast. The McLaughlins moved to Huntington Beach when Bill landed a gig as director of marketing in Irvine for Shiley, which, at the time, was producing small endotracheal tubes for children whose airways had been blocked through pneumonia or surgery. The company went on to develop the Bjork-Shiley heart valve.
“I think it ran in the McLaughlin family . . . that we wanted to be in a business where we could help people,” said Patrick, who also went to work for Extracorporeal, but in sales.
Kim was Bill and Sue’s firstborn child. Jenny came two years later, and Kevin two years after that. By the time Kim was ten years old and in the fourth grade, the McLaughlins had settled into the house in Balboa Coves.
In the early 1970s, Bill entered a weekend MBA program at Pepperdine University for CEOs, which he completed in 1974. He went on to become an entrepreneur, developing a dialysis catheter he dubbed the “McLaughlin Duocath,” created for Medical Device Laboratories, Inc., a firm he founded and later sold to C.R. Bard, Inc., in New Jersey in 1977.
The patented device was designed to halve the damage to a dialysis patient’s veins through a technology that put a hollow tube within a hollow tube to take the blood out of the artery, clean it, and return it to the vein using only one needle, rather than two. Bill also invented a single-roller pump to replace one with a double roller, thereby reducing the damage to the red blood cells squeezed into the needle during dialysis.
“This is how my brother was,” Patrick said. “He was always thinking of the patient.”
Bill first met Jacob Horowitz around 1973 at Rohé Scientific Corporation, where Horowitz was working as a consultant to develop kidney dialysis machines. While Bill was visiting Rohé, and a director was showing him around, Bill was introduced to Horowitz.
The two men met again in 1978, by which time Horowitz was working as a senior scientist at Hughes Aircraft. Bill proposed that they form a business partnership: Horowitz would develop the technology for a blood-plasma separator, and Bill would handle the business and licensing end of things. They entered into a five-year agreement in November 1978 to split any proceeds fifty-fifty after expenses.
Horowitz said he continued to work at Hughes while he developed the device, which he finished in March 1982. The device extracted a donor’s blood, separated the plasma, then returned the remaining blood fluid to the donor in a continuous flow. This was safer than the previous practice, which kept the extraction and return of blood as two separate processes and was therefore vulnerable to the human error of sending the wrong person’s blood back to a donor.
The business, which operated out of the garage of another partner in Santa Ana, obtained a patent that December. By May, Bill had brought in some investors, including the Hillman family’s venture capital firm in Pittsburgh, which put in at least $1 million. Bill incorporated various businesses to invest in this technology, which he ended up licensing to HemaScience Laboratories, Inc., a company that he and Horowitz formed in 1981, with Bill as its president.
Horowitz came up with the initial concept for the device, “but when he built it, it didn’t work,” Michael “Mick” Hill, Nanette’s attorney, said later. Hill explained that the workings of the device involved a film that spun around a centrifuge, but the film was too flimsy so it wobbled and malfunctioned. A younger engineer came in and fixed the problem.
Summing up the falling-out he had with Bill, Horowitz told police, “I was frozen out of the company. . . . He sued me. I sued him. That suit was settled in December 30, 1983. . . . I didn’t get what I had coming, but I got some.”
Bill ran the company, then sold it to Baxter Healthcare Corporation in 1986 for tens of millions of dollars in anticipated royalties, which would come in quarterly payouts. Horowitz believed he should have been cut in on the deal, so he filed a lawsuit against Bill and Baxter in June 1990. He cited a dozen causes of action, including the failure to pay royalties, interfering with Horowitz’s business activities, unfair competition, and antitrust violations. After that, the only contact Horowitz had with Bill, he said, was through their attorneys.
Bill and Baxter countersued, and Horowitz followed up with two more lawsuits, in 1992 and 1993, with claims of fraudulent misappropriation and deception. Bill responded by saying that Horowitz “has engaged in conduct that constitutes a waiver of his rights,” that he had “unclean hands,” and that he was simply trying to circumvent the pending arbitration process by filing more lawsuits.
This extensive legal battle became very expensive, complicated, and time-consuming. Bill had received tens of millions in royalties from the blood-plasma device since 1986. However, since the 1990 lawsuit, the disputed half of the quarterly payments had been going into a holding fund Bill couldn’t touch, known as an interpleader account, until the courts could decide whether to grant Horowitz’s claim.
Between October 24, 1991, and December 9, 1993, a three-person arbitration panel conducted 126 days of hearings, involving twenty-three witnesses and 1,500 exhibits. More than seventeen thousand pages of court transcripts were generated, and more than 850 pages’ worth of final briefs were submitted. Final arguments were heard in May 1994.
Horowitz claimed to have lost an estimated $25 million in royalties over a fourteen-year period, and he wanted to be compensated. Accusing Bill and Baxter of secretly conspiring to amend the patent and use the technology to develop products, he tried to block the use of the patent, which, in turn, Bill and Baxter said cost them money.
This highly technical, scientific, and legal morass ended up incurring hundreds of thousands of dollars just to pay the arbitrators, not to mention the
millions in legal fees for all the parties involved.
On the personal side, Bill was described as loving, extremely affectionate with his children, and also very giving to Nanette and her children. But it caused concern for Kim to see him being so affectionate toward Nanette, when his girlfrield didn’t seem to return that affection.
“I felt like it was just a little strange and not very romantic,” Kim said.
Patrick said his brother was very generous, pointing to the time when Bill and Sue took in Patrick’s young adopted Korean daughter while she worked out some personal issues. Bill was also a very giving donor to other causes, both on foreign land and at home.
Patrick said Bill always taught his family that because they were more fortunate than most, he wanted his children “to be pilgrims, if you will, and go to some of these places in Mexico or Central America and give back, help them by bringing gifts and wheelchairs and stuff like that down there.”
The message sunk in. Kim not only went to work in orphanages in Mexico during college, she also tried to live her entire life by the credo Bill taught them.
“My dad never took his successes to heart,” she said.
But according to Bill’s cousin Barbara, he was not so generous with his money and goodwill when it came to his wife, Sue. Early on, as he was trying to get ahead in the business world, Barbara said Bill “would dictate to [Sue] what to wear, where she had to go with him. To me, he treated her somewhat like she had to do what he said.”
“Bill was a very controlling individual,” Barbara said. “And when they started out, they didn’t have any money, like the rest of us. . . . They had a child right away. He couldn’t get any help from his family because they weren’t in any position to help him.”
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