Mysterious Disappearance of Madalyn Murray O'Hair
No Sign of Madalyn and Family
Bill Murray, though, wanted to resolve what happened to his family, and so, a year after their disappearance, he filed a missing person's report with the Austin Police Department. They opened an investigation, but didn't come up with any leads. It appeared superficially that the O'Hair family had absconded with assets from American Atheists, not a high-priority case for the police. Besides, Madalyn was 77 years old and in poor health due to her diabetes and obesity.
However, the IRS was interested, and began a money laundering investigation in February 1997, 17 months after the O'Hair family had disappeared. Those who cared were of two schools of thought: either they had disappeared with a fortune overseas, or Madalyn had died. Madalyn had frequently told supporters that she didn't want her death to become a national event because it would give those "Christers" an opportunity to pray over her.
Despite their assets, the American Atheists had filed a 1995 tax return that showed a loss of $612,000. The family also had left behind a checklist written by Jon that showed the steps that needed to be taken before fleeing the country. The idea that they had fled was promoted by David Waters, Madalyn's former office manager, who had broken dramatically with the O'Hair family when they had prosecuted him for embezzling $54,000 from the organization.
Madalyn had then lambasted Waters in an atheist newsletter, exposing Waters' criminal history. He had been convicted of murdering a boy over gasoline when he was 17 years old. He had been paroled 12 years later and had then assaulted his mother, which led to more prison time. The embarrassment of Waters' past was almost too much for him to bear: he told acquaintances that he fantasized about torturing Madalyn by cutting off her toes, according to an affidavit by the IRS.
At first he claimed to be innocent — saying he withdrew money from atheist accounts at Jon's behest because the O'Hair family planned to flee. But ultimately Waters pleaded guilty to the embezzlement and paid back the money, and the court placed him on probation instead of sending him to prison.