continued When Allen Thompson woke up in his pickup the next morning, September 1, Lupe's truck still wasn't at her apartment. "He returned home," court documents state, "and began to page [Lupe] as well as call both her home and her work. He explained that he didn't know how to contact any of [Lupe's] family."
Lupe's family celebrated Labor Day with a potluck picnic. James Dailey attended the picnic with his two children. "According to Keene," court papers say, "he seemed 'not all there.' "
September 2, 1997, dawned and Thompson still hadn't heard from Lupe. Court documents continue, "Around 8:00 a.m., Thompson called La Petite Academy and contacted Patricia Urbanski. Urbanski verified that [Lupe] had not come to work that day, and they both decided that something was obviously wrong. At that time, Thompson called the police and filed a missing-persons report."
Sheriff's detectives spoke to Dailey, without an attorney present, on September 2 and September 4, 1997. On the former date, with Dailey's permission, detectives searched his apartment, finding no evidence.
Police also questioned Thompson, Cameron, and Tucker as suspects in Lupe's disappearance. All three were cleared of suspicion. Dailey was not. Upon interviewing Dailey's co-workers at Viejas, they found that he had repeatedly mused on the idea of killing his wife in the presence of several of them. Detective Sharon Lunsford's declaration in support of arrest, filed with the court in February 1998, reads, "Co-worker Peter Dwyer stated that Dailey would talk about killing Guadalupe. He talked of his dislike for Guadalupe and how he wanted to kill her and dump her body. Dailey talked about how he could get a boat and take Guadalupe's body to Catalina Island and dump it in the 'Navy Dump,' which he described as a deep water location.... Co-worker Robert Jeffery stated he had a number of conversations with Dailey which incorporated details about how Dailey could kill Guadalupe.... Dailey talked about how he would 'slit the bitch's throat' if he caught her with another man.... Dailey told [co-worker Timothy Rowen] that if Guadalupe was out of his life, he would not be having the problems he had. Dailey blamed Guadalupe for his financial problems and marital difficulties. Dailey often referred to Guadalupe as the 'Bitch' or the 'Whore.' Dailey talked about knowing Guadalupe had men spending the night. Dailey stated his daughter had told him about men spending the night with Guadalupe. Dailey said it was an improper lifestyle for the children. Coworker Linda Stone stated that James Dailey often talked about how he would kill Guadalupe if she deprived him of his kids. Dailey had said he would 'break her neck' and dump her on the Viejas Indian Reservation 30 miles from where he lived. Stone felt Dailey was serious when he made these statements about killing Guadalupe. Dailey told Stone that sometime when Guadalupe was at his house alone 'opportunity would knock.' He stated he would take Guadalupe to bed, because she was an 'easy woman,' and there he would 'strangle the bitch' in the process of 'making love' to her. Dailey said he had killed before and it was something he could do again."
Based on the above testimony, a search warrant was issued for Dailey's apartment and a search made on September 12, 1997. His car and boat were impounded. Three days later, during an examination of the boat, Lupe's checkbook was found wedged in between a seat cushion and the boat's hull. The checkbook contained a receipt from a Mailboxes Etc. on Mission Gorge Road in Santee, dated August 30, 1997.
Despite this evidence, the district attorney's office twice decided not to prosecute the case.
Early in 1998, James Dailey took his two children and moved to Muncie, Indiana, where he enrolled at Ball State University. He lived there until March 1, 2001, when he was arrested and charged with murdering his wife. In the interim, the sheriff's detectives most intimately connected with the Dailey case, Lunsford and Russell Moore, had approached Dan Goldstein with the idea of trying the case against James Dailey. Goldstein accepted and got permission to pursue the case.
At the trial that began August 6, 2001, and ended August 29 -- after four days of jury deliberations -- Goldstein hammered on two themes. "Well, first of all," Goldstein recalls, "you had a guy that was telling people at work that he was going to kill her. Then, you have the fact that his boat was searched a week or two after her disappearance and inside his boat was her checkbook with a receipt in the checkbook from a day before she had disappeared. That was like a smoking gun to me. First of all, she [had told people she] was afraid of the water. Secondly, the checkbook went with her wherever she went; thirdly, there was a receipt in the book from 8/30/97, and she disappears on 8/31/97. So the checkbook was pretty powerful."
Michael Begovich, Dailey's defense attorney, countered that "mouthing off does not equal murder. And I argued that, if this guy really intended to kill her, why would he tell so many people? Why would he set himself up for failure? It doesn't make sense. And then, the witnesses who testified to the threats admitted on cross examination that they didn't really take it seriously, and that's why they didn't call the police or report it to their supervisors. It was just some guy going through a divorce, frustrated and upset like everybody else. And one witness, called by the prosecution, testified that he himself had threatened to kill his wife while he was going through a divorce."
Regarding the checkbook, Begovich argued that the boat sat uncovered for 12 days in an unsecured location where anybody could have tampered with it or planted evidence. Then he pushed the possibility that Lupe was still alive. "There was evidence," he says, "that on at least two occasions, someone had used her Social Security number in order to get credit. Also, there were still telephone calls being generated on her phone bill in that final month supposedly after her death. Then, the third thing that we presented to the jury was one witness who had observed her in Santee about two weeks after she was reported to be missing. It was a security guard who lived in Santee. She was working one afternoon when she saw Lupe come up. I called her as a witness, and she testified that she saw her in Santee in the parking lot of a shopping mall."