click here or scroll down for afternoon update.

REPORTS: WATERS TO PLEAD GUILTY THIS MORNING IN EXTORTION, KIDNAP PLOT: WILL IDENTIFY BURIAL SITE

January 24, 2001

According to published reports and sources inside the U.S. Attorney's Office, a plea agreement is expected in the next hour between prosecutors and David Waters, the man believed by many to have been the ringleader in a plot to kidnap American Atheists founder Madalyn Murray O'Hair and her family.

O'Hair, her son Jon Garth Murray and granddaughter and adopted daughter Robin Murray disappeared in the fall of 1995. The case became more compelling when it was learned that $600,000 was missing from the bank account of one of her organizations. Allegations that the family had stolen the money and left the country, though, were called into doubt as investigators began a murder probe which soon focused on David Waters, a former employee of the O'Hairs, and a group of close associates.

Mrs. O'Hair was a plaintiff in the historic 1963 MURRAY v. CURLETT Supreme Court case which helped to end prayer and Bible verse recitation in the public schools. She went on to found American Atheists, and initiated numerous other court actions challenging everything from religious mottoes on public money to orchestrated prayer by astronauts in outer space. Her feisty, combative style made her a target for religious groups, media and others. At the time of the disappearance, the responsibility for running American Atheists and other organizations had shifted to Jon Garth Murray and Robin Murray.

Even with allegations that the trio had absconded with funds in order to live high in some foreign country, doubts persisted. The Criminal Investigations Division of the Internal Revenue Service began an inquiry into the possibility of fraud and money laundering. Ed Martin of the IRS said that "it soon turned into a murder investigation." The case began to unravel when at the behest of John McCormack, a reporter for the San Antonio Express-News, police linked the discovery of a decapitated corpse outside of Dallas to David Waters, a disgruntled employee who had been fired by the O'Hairs and had later pled guilty to stealing funds and other assets of the organization. Soon, investigators learned that Waters and his associates, including Gary Paul Karr, had ended up with money and valuables taken from the O'Hairs.

Karr was convicted last year of involvement in an extortion and kidnapping plot.

Despite the fact that the bodies of the O'Hairs have not been located, investigators pieced together evidence linking Waters and others to the disappearance. Authorities believe that the O'Hairs were kidnapped and held hostage in a San Antonio motel room where they were tortured, raped, and extorted for money, and then killed in September, 1995. Under this scenario, their bodies were transported to a storage unit in Austin, Texas where they were dismembered, stuffed into 55-gallon blue plastic drums, and then buried in a ranch in West Texas near the small town of Camp Wood. There have been numerous searches with heavy equipment of the 5,000 acre ranch, but no bodies have been recovered.

That could all change this morning, though, as Water heads to court and a possible plea bargain . Sources tell us that he will plead guilty to at least two crucial charges in the case, and agree to take investigators to the site where the O'Hairs are reportedly buried. This move comes after Judge Sam Sparks refused defense motions to have Waters' trial postponed. Waters is already serving a life sentence for violating a probation agreement which stems from his 1995 conviction for stealing $54,000 from American Atheists. He is also slated to serve an eight-year term in federal prison for illegal possession of a gun.

January 24, 2001 - afternoon

Sources have told AANEWS that in an unusual move, Judge Sam Sparks sealed this morning's court proceedings involving David Waters, the man authorities say masterminded a plot to kidnap, extort and ultimately murder the Murray O'Hair family. As reported earlier today, Waters was expected to plea bargain in lieu of going to trial next week on several counts involved with the disappearance of Madalyn Murray O'Hair, her son Jon Garth Murray, and her granddaughter and adopted daughter, Robin.

Waters had reportedly agreed to plead guilty to at least two charges in connection with the disappearance, and lead authorities to a grave where he reportedly disposed of the dismembered bodies.

Defense attorneys requested and received a court order sealing today's proceedings. Reporters and spectators were barred from the plea bargain proceedings, and what transpired inside is -- for the time being -- being kept secret. A source close to the investigation, though, informed AANEWS that this may be due to concerns about possible recrimination by or against certain witnesses.

We have also learned that authorities may begin looking for the bodies shortly. One source declared, "investigators will be out of the office starting next week," and speculated that they may again search a ranch near the West Texas town of Camp Wood.

Word of the plea bargain surfaced after defense attorneys were apparently confronted with a voluminous amount of evidence implicating Waters and others in a plot which, say authorities, was designed to extort money from the family, and ended up resulting in their murder. The body of one of those believed to have been involved in the scheme, Danny Fry, was found after the disappearance. Fry, a small time con man from Florida, was killed and decapitated, and had his hands severed before his corpse was discovered along a river bank outside of Dallas. That led investigators to a trail of other evidence linking David Waters, a former employee of the O'Hairs, and Gary Paul Karr. In June, 2000, Karr was convicted of four counts pertaining to the O'Hair disappearance, and received a life sentence.

Another man tied to Waters, Gerald Lee "Chico" Osborne of Weatherford, Texas, recently pleaded guilty to using a false social security number in order to rent a storage locker where, say investigators, the bodies of the O'Hairs were dismembered and placed in 55-gallon, blue plastic drums.

Authorities were prepared to go to trial against Mr. Waters despite the lack of bodies. Evidence in the case, though, established that Waters and his associates came into possession of property, money and other items from the O'Hairs after the disappearance. Anticipating the trial which had been scheduled for next week, Assistant U.S. Attorney Gerald Carruth told the Dallas Morning News, "Some of the same evidence and witnesses in the trial of Mr. Karr may be presented again. But some charges against Mr. Waters are new, and it's safe to say that different witnesses and different evidence will be presented."

One source warned that there may still a trial, however. "A lot depends on whether or not David Waters cooperates." Another told AANEWS that investigators were "pleased," and said that Waters would be sentenced on the plea agreement on March 30, 2001 at 9:00 a.m.

Today's proceedings may be the denouement in a case marked by bizarre twists, speculation and a plot fit for a murder mystery bestseller. When the O'Hairs first vanished in the fall of 1995 after telling associates that they were engaged in some kind of undefined 'business," there was speculation of possible foul play. Word then surfaced that nearly $600,000 was missing from the accounts of an organization linked to the family; that ignited rumors that the O'Hairs had illegally absconded with funds. Especially on the internet and even in printed publications, there were theories that the trio was living off ill-gained wealth in New Zealand, or had been murdered by religious groups, and even close associates within the organization.

The case took a distinctly different turn, though, when Danny Fry's corpse was discovered, and the trail began leading in the direction of David Waters. Waters, 53, had been former office manager for American Atheists, and in 1994 pled guilty to the theft of nearly $60,000 in cash and negotiable instruments from the organization. The circumstances surrounding the theft, as well as fate of a missing computer from the library at the Austin office of American Atheists, was the subject of a Newsletter piece published before the disappearance. Investigators speculated that Waters was motivated by a combination of desire for vengeance, and greed.

Finding the bodies of the O'Hairs may finally put to rest speculation from those who say that the family is alive and well. Indeed, during the trial of Gary Karr the defense produced a minister who insisted that he had seen a sickly Madalyn O'Hair in eastern Europe during a trip there following the disappearance. One national magazine produced a similar "Elvis-style" sighting, with the family ostensibly dining on Mexican food in New Zealand. Authorities dismissed these claims, though, and noted that part of their evidence in the Karr trial was testimony from Waters' former girl friend, Patti Jo Steffens, who reported saw Waters return to their apartment during a period following the kidnapping with his shoes splattered with blood. Authorities say that the O'Hairs were forcibly abducted, held in a San Antonio motel where they were tortured, raped and extorted for money, and then murdered. Among the pile of grisly physical evidence investigators found were handcuffs and radio listening devices which, they speculate, may have allowed the kidnappers to monitor the O'Hairs in an adjoining room. "Chico" Osborne, they say, was in charge of renting the storage locker where the bodies were dismembered. The room was reportedly scrubbed down with bleach. There have been unverified reports, however, that some kind of DNA evidence from this or another source was uncovered.

Today's events, though, may become their own story. Media in Austin is reportedly furious that they were excluded from the proceedings. Judge Sparks allegedly was upset with a leak about the plea bargain that appeared in the Austin American-Statesman newspaper.

[text only]