Did Karl Karlsen get away with killing his wife?: Part 4

Christina Karlsen’s death was ruled accidental. An insurance investigation found evidence the fire was not an accident, but the insurance company still paid out the claim.
8:47 | 06/06/20

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Transcript for Did Karl Karlsen get away with killing his wife?: Part 4
From the house that burned. Christina Karlsen perished in the house fire. They found her doubled over outside of the tub with a rag covering her face. That day, I got out there and, you know, I started looking around. Somebody directed me over to the ambulance. And when I got in the back of the ambulance, I see the whole family except for my daughter, so that's when I realized what had happened. Everybody was rushing around with a purpose, and my dad wasn't. And he was just standing there casually like it was any other day. There were people in California who right from the beginning in 1991, believe that Christina's death was not accidental. Christina Karlsen's cousins went to the burnt out home and created a video. She took extensive video footage of the inside and outside of the house. The area where Christina's body was discovered in the bathroom. This here is the bathroom where Christina was found. The bathroom door was here. Both of them evaluate the house, look through the ruins. It's obvious that they're suspicious. Why he didn't knock this out -- In front of the bathroom window is a board nailed into the wall. Most of the bathroom area is still intact. You can clearly see the boarded up window to the bathroom. Karl's story is that a few days prior to the fire, his wife was trying to open the bathroom window, and she was using a toilet plunger and broke the window. Karl's solution, he said, was to take a warped wooden board that he had in his shop and use 17 nails to hammer it into the wall. There's no way she could have got that off. Isn't there anything she could have used to get that off? I went to the house the next day. I asked somebody to drive me out there, and they said Colette, you don't want to go out there, and I said, yes, I do. I stood in the bathroom and could not for the life of me understand why somebody didn't try to get her out. Between the boarded up window and the fire raging right just outside the bathroom door, she was trapped. There was no getting out. I asked him, why didn't you get the board off yourself? And he said by the time he got around and got the kids out, the windows -- that it was too late. He couldn't get near it. Reporter: So after the fire, Karl talks to investigators, and he tells them how he thinks the fire might have started. Karl goes on with a very elaborate story told back in 1991 that days prior to this fire his wife brought in a five-gallon jug that was filled with kerosene. They used kerosene heaters inside of the house. They have a cat and a dog. And those animals are rough housing, which knocks over the container of kerosene. I do remember there being a spill on the floor. Mom had towels and blankets piled up, and we were having fun climbing over the top of them. He had been working that day of the fire. He was working in the attic area. Karl says he was using a trouble light up in the attic for light just before he went out to the garage. Karl claimed that the trouble light, which either fell from the attic or which he left on the kerosene spill, likely caused the fire. Reporter: And according to Karl he said once the fire began he did what anybody would try to do, which is try to save the family. There are a few things that are a little fuzzy, but there are some things that I remember just like it was yesterday. He pulled us out through the window. He took Katie and I to the truck. He told us to get down and not to look. We were kids. Curiosity got the better of us, so we turned around, all of us and we just watched. She watched Karl walk slowly to the house and not make any real attempt to break into the house and save Christina, her My father had said mommy's gone to heaven, even before the ambulances got there, the firefighters, while we're sitting in the truck. We didn't understand of course the gravity or what it really meant but we knew so we were all really quiet. Christina's death is ruled an accidental death. The actual physical cause of death of Christina Karlsen was smoke inhalation, which indicates that the fire was not on top of her. We just flew to California as soon as we could get there. He was very stoic, emotionless. And he just said, I want to go home. Meaning New York. And at the time it made sense. In four days, they had everything taken care of and they were off to New York. They were gone before she was even laid to rest. If you really were that concerned about everything that happened, you would stay around and you wouldn't be avoiding talking with detectives or the fire marshal. Carl Kent, who was the investigator for the California department of forestry, had a lot of questions about the cause and who started this fire. I was requested to come to a fire scene. I thought the circumstances of the fire were suspicious. There was concern that something wasn't right. And it didn't help that Karl had taken out an insurance policy on Christina just weeks before the deadly fire. Karlsen went to an insurance agent and bought $200,000 policy on his wife. The fact that the policy was purchased 19 days before Christina's death, I think, rang the alarm bells in the head of state farm insurance. State farm brought in Ken Buske. Typically I'm hired by an insurance company to answer what the cause of the fire is. The story they related to me, at least initially, made sense as a story -- that the hot bulb from the trouble light could ignite the kerosene soaked into the carpet. Reporter: But you know, when that investigator looked at this severely burned light, he was able to determine that the filament had not been energized at the time of the fire, meaning the light was not on. If a bulb is off, of course, it's not apt to be the cause of a fire. Mr. Karlsen's story simply couldn't have been true. So Ken Buske turns his report into the insurance company telling them he's convinced that this was no accident. This was a set fire by a human being. Well, we clearly know there was only one human being capable of starting that fire. But for whatever reason, that report didn't stop the insurance company from paying out the claim. Karl was paid $215,000, and it was not explained why their recommendation to not have him be paid out was overlooked. The insurance company did a very good investigation. Law enforcement, it didn't seem, was doing anything. I never saw Mr. Buske's report. I didn't know who Mr. Buske was. It just seemed like when Karl moved to New York a few days after the fire, it's like everything stopped and there wasn't much follow-up. I asked if they would front the moneys for me to travel back there and interview him. Carl Kent wanted to go to new York to interview Karlsen in person, but his superiors turned him down, saying that there just wasn't enough money for that kinda trip. The d.a.'s office said it was a good circumstantial case, but there wasn't enough to prosecute at that time. I was hoping something would happen, but somewhere after maybe the 15th year, I was beginning to think somebody got away with murder. All these years later, with his 23-year-old son Levi dead, there are people who start to wonder, "Did he get away with murder not once, but twice?" Reporter: You get a phone call. I was asked if we had investigated an accident involving Levi Karlsen's death. Do you remember the call to this day? Oh, yeah. Cindy's concerned now first wife dies in this tragedy, Levi dies in this tragedy. Am I next?

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

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