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Wife Aids Police in Husband's Arrest

Karl Karlsen is accused of murdering his son and insurance fraud.
6:44 | 09/18/13

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Transcript for Wife Aids Police in Husband's Arrest
the new york man suspected of killing his wife and his son for nearly $1 million in life insurance money. And their suspicion, he was on the verge of doing the same to the his current wife. Dan and nancy weigh in live on that just ahead. Abc's linsey davis is here with more on the story first. Reporter: A greedy man with a cold heart. That's how karl carlson's former father-in-law describes him. His first wife and horses all died. And carson collected insurance payouts on all of them. He now faces second-degree murder and insurance fraud. This morning, karl carlson is sitting in a jail cell, accused of murdering his son, nearly two decades after the suspicious death of his fire wife. He's accused of some horrible things. We'll have to see if the court process finds him innocence or guilty. Reporter: The horrible things are a series of occurrences that investigators say likely weren't coincidences. First, there was the colorado house fire in 1991, that gamed the life of his then-wife, christina. Investigators say he collected a $200,000 life insurance payout. Then, the 2008 death of his 23-year-old son, levi, crushed to death when the truck he was working under unexpectedly slipped off its jack. Karlson collected a $700,000 life insurance payout for that. Police say karlson chalks it up to a string of bad luck. It's unlikely that someone would have that many tragic events, a few weeks after they obtain high insurance policies. There was the fact that he facilitated a handwritten will on the day that levi died. Reporter: Thanks to a tip from an unnamed family member, new york and california authorities have reopened the investigations to the circumstances around both deaths. Cindy karlsen, was one of investigators see first calls. Her first words were, thank god you called. Reporter: Cindy told police she had her suspicions. Especially after she learned he used some of the life insurance payout from his son, to take out a life insurance policy on her, worth $1.2 million. His first wife's family was also suspicious. For 20 years, I stood in the gap, believing that justice would take place. And I never gave up hope. Never. Reporter: Karlsen's attorney did not return our calls. Investigators say in a nearly ten-hour interview, 75 times he denied killing his son. But they say he contradicted himself with inconsistent accounts of how his son died. His trial begins late next month, george. Let's get more from our legal team. Dan abrams and nancy grace. Dan, I guess this is really, really bad luck. Or -- the question is why did it take so long to catch him, so to speak. Taking out insurance policy here and there and cashing in. But there is a real legal question here about whether they're going to be able to introduce this tape. This wife, very bravely goes and gets him to make all these confessions on tape. But it's his wife. And there is a spousal privilege in new york that very well could allow him to prevent her from testifying. And so, there's going to be a big legal fight whether that tape comes in. Nancy, how can prosecutors get that tape into evidence? There's not going to be a problem at all. Like all the rules in the world, they're made to be broken, just like hearsay. There's over 20 exceptions to that. There's exceptions to the marital privilege, as well. Number one, he stated these things to his wife in confidence. But they were sitting in an open restaurant, surrounded by people, including cops. I don't know how confidential that was. Number two, the marriage must be viable for the confidence to exist. They were in the process of a divorce. Number three, the confidence, the marital privilege, does not apply, if it is about the mistreatment, abuse or murder of a domestic relative, a wife, or a child. He killed his son and he killed his first wife. And she was afraid he was going to kill her next. Let me point out one other thing about the 1991 fire I didn't hear mentioned. Let me point out that he saved his other three children. But his wife died in the bathroom. Guess what? A few days before the fire he boarded up the window with 17 nails so she couldn't get out. She was trapped in the bathroom and burned to death. You're not going to hear me defending this guy. The only question is going to be whether this tape comes in and whether she can testify. I don't think it's quite as simple as nancy's laying out. One of the key factors in deciding does someone get to say spouse can't testify, was it to further the marital bond. And her getting him to come out there and make these comments, she said, when she kept saying to him, this is the only way i can trust you. This is the only way we can make this relationship work. But nancy's right, with other people around, that's going to be the key argument. And also, does the fact he's taken out a life insurance policy on her, which could indicate a bad motive, undercut his chances? He's in a lot of trouble. It's not going to change the spousal privileges. He's taking out life insurance policy -- can you two please come clean. These were his investments. He would take the money he got from the other dead people, even killed his horses. They were belgium draft horses. He would take that money and roll it over into a new insurance policy on his last wife. Cindy, finds out he took the 700 grand off his dead son, that he dropped a car on, and stood there while he died, he invested that in a policy on her. It was a rollover, like minutes with sprint. That's the question. Is, how did they not suspect? And I think -- did you mention the walker? Did you see him hobbling around on the walker. He only does it in court. When he's not in court, he doesn't need a walker. Hello? I don't remember what I was going to say. We have to -- we're out of time anyway.

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

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