After being convicted of playing a central role in a gruesome triple murder-for-hire in Houston in 1980, he was released from prison in 1990 after serving a third of his plea-bargained sentence. He wound up back behind bars last month, charged with technical violations of his parole.
That was good news to Houston authorities who believe Waldhauser got off easy for his part in two insurance-related murder plots, one a triple slaying that included a 14-month-old boy shot to death in his crib. It was welcome knowledge as well to a Garland police officer who, after being befriended by Waldhauser, became suspicious that he was hiding something.
He was. Texas parole officials allege he was concealing his new career as a broker of life-insurance policies for the terminally ill in Dallas, a job that struck some as odd considering the man's history of trying to profit from people's deaths.
Waldhauser's new life was revealed in an October 22 article in the Dallas Observer and Houston Press in which Press reporter Steve McVicker described meeting Waldhauser at the West End office of Southwest Viatical, a brokerage that listed Waldhauser as vice president of marketing. Viatical companies buy the life-insurance policies of HIV-positive people for pennies on the dollar, then collect the full insurance benefit when the client dies. Brokers hook up buyers and sellers. "Business is very good," Waldhauser told McVicker.
Last month, officials with the state Board of Pardons and Paroles accused Waldhauser, who now goes by the name Michael Lee Davis, with providing false addresses and false employment information on his annual mail-in parole report to the state. On November 21, a Plano detective arrested him at his home in Collin County.
On Thursday, though, in a narrow, glass-and-concrete "contact visitation" room in the Collin County jail's bowels, as he sat at a conference table described by one participant as "too small for playing cards," the soft-spoken ex-con appeared to hold all the trump.
Waldhauser's two Dallas attorneys--Kevin Clancy, who defended Dallas Cowboys star Michael Irvin against drug charges several years back, and Mark Watson--shredded the parole department's weakly presented and badly documented allegations.
After a two-hour session in which Watson and Clancy were allowed to give even the state's side of the case, hearing officer Mary Sheldon found that Waldhauser committed no violations. She said she would recommend to the board that Waldhauser remain free and "under supervision." For the last seven years that has meant so-called post card parole. He is asked to mail some basic information about himself to the department once a year.
Under state law, the hearing record will be reviewed by a three-member panel of the parole board, who ultimately will decide Waldhauser's fate. They could accept or overrule the hearing officer's finding, or send the case back for another hearing, parole officials said.
Waldhauser, meanwhile, will be spending a few more weeks--at least Christmas and New Year's--in jail until the board hears his case.
At last week's hearing in McKinney, defense attorney Watson easily explained away allegations that Waldhauser did not report his correct address at various times over the past eight years.
Parole officer Tammy Feemster introduced several letters sent to Waldhauser at his supposed addresses that were marked "return to sender." Watson pointed out that the letters were sent to Walter Waldhauser, but that he had legally changed his name to Davis, causing possible confusion by postal officials.
"I do not believe that I can find a violation for him falsifying his residence because of the confusion over the name," Sheldon announced in her finding on the matter.
Waldhauser's defense against the charge of wrongly reporting his employment was more tricky.
He testified that he had described himself as a student on his 1996 and 1997 parole reports because he was a "full-time student" taking a correspondence course from William Howard Taft University in Santa Ana, California. His attorney provided a transcript and said Waldhauser was studying law. (Susan Der with the California State Bar's department of educational standards confirmed in an interview that Taft, although a correspondence school, is registered with the state bar. It is possible to become a lawyer in California after completing correspondence studies at Taft, she said.)
"What were you living on...in '96 through '98?" Sheldon, the hearing officer, asked Waldhauser directly.
Slump-shouldered, dressed in pajama-like jailhouse garb, he replied, "I had worked off and on in the viatical insurance business."
Instead of asking a single follow-up question, such as "Could you be more specific?" Sheldon then asked him why he reported no employment.
He answered, "I was a full-time student."
When she inquired again about what he was living on, he answered, "Money I would make from time to time."
While Waldhauser danced around Sheldon's vague questions, his attorney explained away the state's only documented proof that Waldhauser worked at Southwest Viatical: the 1996 application to the state insurance board listing Waldhauser as a company vice president.
"They are equating putting down officer of a corporation [on state forms] with employment," said Watson. "We are also saying on the days that he sent it [his report to parole] he was not employed on those days."
While this went on, Plano police Det. Curtis Coburn sat outside the visiting room, waiting to be called as a witness. He never was, though some of his information would have at least cast a doubt on the impression that Waldhauser is an impoverished, full-time student.
Coburn says the house at which he arrested Waldhauser, at 3336 Langston Drive in Plano, is listed in county records as being owned by Michael L. Davis (Waldhauser's new name) and has a current appraised value of $182,256. Market values are often more. County appraisal records list no mortgage.
Coburn also says his background checks found four different Social Security numbers associated with Waldhauser.
When the hearing ended, Watson instructed his client not to answer questions, and Waldhauser silently left through a thick glass door. Watson, too, refused comment, and throughout the hearing he objected to the presence of a reporter. He even attempted to swear the reporter in as a witness, which would have required him to leave the room.
Clancy, contacted by telephone after the hearing, says he blames Waldhauser's jailing on reporter McVicker. "I think Steve McVicker is the reason we ended up being there. [His stories] weren't balanced. It was innuendo and muckraking. Read those articles and read between the lines, and you'll see what happened." He declined further comment.
Houston Press Editor Margaret Downing responds, "We stand by our story."
In one story, McVicker speculated that parole officials were focusing on a clause in his parole requiring that he not be permitted to associate with known felons. And Southwest Viatical is thick with ex-cons. Current Southwest Viatical president Hoyt Wauhob spent more than two years in prison in the mid-'80s after being convicted of operating a speed lab in Houston. The company's founder, Wes Crowder, was convicted in Fort Worth in 1984 of felony theft and did a nine-month stretch. He was convicted of theft again, this time in Dallas in 1987--and served about two years in jail.
However, parole rules revised early this year give a limited definition of whom parolees cannot associate with--namely, people currently "engaged in criminal conduct."
Andy Kahan, director of the Houston Crime Victim Assistance Office, says he hopes the parole board will order another hearing "so that all the evidence can be presented. It's important the people of this state get the total picture about who this man really is."
He says parole investigators are at times "thrown to the wolves" because they must present hastily prepared cases against good lawyers, and he is curious how a supposedly "full-time student" such as Waldhauser could afford to hire "high-dollar lawyers.