Investigators attempt to solve 'Killer Clown' murder

At the time, prosecutors felt that there simply wasn't enough evidence to get a conviction in Marlene Warren's murder.
5:33 | 10/21/17

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Transcript for Investigators attempt to solve 'Killer Clown' murder
Announcer: We return to more of "20/20." Reporter: The clown-centric horror blockbuster "It" has become an international sensation this year, becoming the top horror film of all time, but in 1990 "It" was real. In the weeks and months following the murder committed by a clown the local clown economy takes a hit. Nobody wanted to hire them, the kids were afraid of them. The last thing a kid wants to see at their party is a clown." The bozo backlash impacted longtime entertainers like Selim Salguero who suddenly finds himself persona non grata. Everybody was very apprehensive about having a clown come to your, um, to a party, to an event because of, uh, they didn't know who this killer clown was. Reporter: Meanwhile, Michael Warren is also having trouble at his job. Police are digging into his background during the murder investigation, uncovering something shady on his used car lot. Odometer tampering, the kind seen in the movie "Used cars." You're not going to find another deal like this in town. Warren is charged, but not for murder. Mike Warren is accused of 66 crimes in connection with the way he ran his failed auto dealership in west palm beach. I mean, there's so many aspects to this that -- that are -- strange. Reporter: Best-selling author, and Florida native Carl hiaasen is fascinated by all the twists and turns in the case. Maybe there's good money in odometer tampering. You know, who knew? Reporter: Michael Warren sure knew. He magically turned old cars new again, rolling back the odometers, adding value to the cars, allowing him to sell them for more to unsuspecting buyers, and it was in a very large number of cars that, that had happened. Warren is convicted of 43 counts of racketeering, theft, and the odometer rollbacks, but neither he, nor his alleged mistress are charged in that costume-wearing, gun-toting murder of Marlene. He maintains his innocence in that crime, and has an alibi. Michael spent a lot of time at racetracks, and he was on I-95 headed to Calder racetrack in Miami during the time of the murder, and he had friends with him in the car, so he had an alibi. Reporter: Good news for Sheila. She says she has one too. Sheila said that she could not possibly have committed this crime because she was out repoing cars at the time. Reporter: But the bad news, the evidence seems to point to her. For starters, the description from those costume shop employees who I.D'd Sheila from a photo shown to them by police. If you look at this picture, do you see a resemblance to the woman you saw in here, possibly? Yes. Reporter: And don't forget the getaway car. Inside? Turns out some pretty compelling evidence. The investigators found a few things in the white Chrysler Lebaron that the clown allegedly had made the getaway in. There were Orange fibers that could have come from a clown wig, and apparently a few hairs as well, human hair. Reporter: Human hair! Chocolate-brown human hair! The color of Sheila's, and remember when police searched her apartment they took hair samples. Might they match? And, there are those props bought by someone clerks say matches Sheila's description at a publix located, by the way, just 1500 feet from Sheila's old apartment. They were able to potentially link her to the flowers and the balloons. So how is it that police would not have arrested her in the very least on that evidence? It's not illegal to buy balloons or a costume, and nobody at the scene could say that that was Sheila keen because whoever the killer was, was wearing a clown suit with makeup. Reporter: Bottom line, prosecutors felt there simply wasn't enough evidence to get a conviction, and with that the unsolved mystery fades from the headlines. Once the murder happened, and the headlines kind of died down, and there were other horrific murders to cover unfortunately Marlene kind of got lost. It didn't stay in the headlines. No, not that way. Reporter: Behind the scenes there's lots of talk about the case, and a differing of opinion on how to move forward. Some of the people that were investigating the crime felt they had enough evidence to maybe, make, go ahead and make an arrest, and some of the detectives were upset that the state attorneys' office kept saying no we want more evidence. There were reports that Sheila keen had dressed as a clown previously at some other office event, that someone fitting her description had been seen buying flowers, that someone fitting her description had been seen buying a clown costume. It would seem that that's pretty strong circumstantial evidence. It's not about the police or the state attorney's office not connecting dots or failing in any way. Everybody worked diligently on this case. It's just being patient enough to make sure that when we prosecute somebody for first-degree-murder, we intend on getting justice for that victim, and the victim's family, and we want to make sure that we do it right. Reporter: No arrest. No progress. Only suspicion, especially from Warren's neighbor John herring. When I asked him, did you do it, and he said, of course not. You asked him -- I asked him. To his face, did you -- Uh-huh. Kill your wife? Yeah. Well, I said, did you have anything to do with it? He says, no, of course not. I said, good. Reporter: On new year's eve 1997, Michael Warren has something to celebrate! He's released early after serving only 3 ?? years of his sentence for the odometer tampering, and maps out a new life for himself!

This transcript has been automatically generated and may not be 100% accurate.

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