Transcript for Man tells police he was hired by husband to kill wife for $10,000: Part 4
Reporter: Small town corning, New York, is in disbelief when just 24 hours after Kelley Clayton is found murdered, her husband is arrested, in part because of the statement given by the only eyewitness to the crime, his young daughter. More tonight on the murder in Caton. Tom Clayton is in jail, suspected of killing his wife. When Tom was arrested, I was in shock, definitely, like everybody. Reporter: Had she ever indicated any aggression from him? Never. People always think, we make an arrest, that's the end of the case. But the investigation continued. It was determined shortly after Tom was arrested that there was a lot more to this story. Reporter: Kelley's family can't believe her husband could have done it. They point police to Michael beard, Clayton's longtime employee. If Tom didn't have any work through servpro, he always had him up at the house doing stuff. Cutting down wood or whatever. Reporter: Beard had recently been fired. Could he be holding a grudge? There was an initial check at his residence just as a follow-up. He didn't know anything about anything and indicated that he had nothing to do with any part of this. Reporter: Investigators are stalled until they get a lucky break. Remember lucky Miller, who with her husband Greg hosted that infamous poker game the night Kelley was killed? She now recalls a strange request Tom made that night. Wait a minute, he asked to use my phone. And I look at the phone, I'm looking to see the past when he called and there's nothing. Reporter: No evidence of a phone call? Nothing. She's yelling at me and she's shaking like this. And I go, "Then he deleted them." And she goes, "You can delete phone numbers?" Who hides evidence? You only do it if you really have something to hide. Reporter: The Millers pull up their phone bill online. And, sure enough, at 10:53 P.M., a pair of calls to an unfamiliar number. Lo and behold, that phone number comes back to Michael beard. Reporter: They question him again, this time bringing him here, the state police barracks, and put him in this hot seat. Polygraph chair? Polygraph chair. That's the same chair he was sitting in. Reporter: How did he handle the polygraph? He denies all involvement in it. And he was deceitful. Reporter: While Michael beard, the hard-working handyman, is failing the polygraph test miserably, his live-in girlfriend holly Barrett is speaking her truth. Holly tells investigators that Tom had offered Michael $10,000 to basically burn his house down. My boss came into the interrogation with that information. Said, "Michael, we know about the $10,000." Beard looks down and then he looks up, and he finally gives up the whole story as to what had happened, placing himself at the crime scene. He did it at the direction and request of Thomas Clayton. Reporter: It is a surprising twist for investigators. Beard making a full confession to murdering Kelley Clayton as another job for his boss. He didn't even get any money upfront. I mean, he was going to go do this on the promise from Tom Clayton that he'd be paid $10,000. Reporter: In a transcript of his confession, beard reveals details of the plan, saying, "He wanted me to go to the house, kill Kelly, then light the house on fire. He said the kids would be at her sister's house. There was also gas in the garage. He wanted the cars to burn also so that he could collect insurance money." When asked why, beard said, I needed the money. He said in his words that he got scared. Reporter: Stunningly, it appears to police that Clayton had a secret plan he didn't reveal to beard. He was going to set the house on fire with Kelley and the children in the house? That's correct. This is a cold-blooded attempt to remove your own wife and children from this Earth. Reporter: Beard agrees to show police where he got rid of the murder weapon. He's driving 225 south, and throws it out the window. Reporter: When day breaks, search times find this in a wooded area. What appears to be a yellow stick, but it's actually the handle of a sledgehammer. It seems like Michael beard left a lot of bread crumbs around town. Police are also able to locate keys to the Clayton home tossed into this creek. And they recover Michael beard's clothes from the night of the murder, dumped in this swampland. Bloody clothes? Yeah. They had blood on them. Her blood. Beard was then arrested for murder, and now the focus shifted from Thomas Clayton doing the crime himself. Now it became a murder for hire. Beard confesses to the murder, tells them where the murder weapon is, tells them where the bloody clothes are buried, but adds the critical detail, the reason he did it was because Tom Clayton offered him $10,000 to kill his wife. It was shocking to hear that there was another person involved in the murder of Kelly Clayton. We weren't expecting it at all. Reporter: So your sister has been brutally murdered, and now your brother-in-law is being charged. How did you even begin to fathom this? You can't. So, this person who you stood up for to marry your sister, is, now you find out, a monster, a sociopath. The fact that he planned and calculated this entire plot to have my sister killed made it 100 times worse.
This transcript has been automatically generated and may not be 100% accurate.