Witness: Life Insurance Taken Out On Compound Members

May 29--A man described as the leader of a traveling entourage that once lived at a Valley Center compound appeared at a court hearing today to decide if there is enough evidence to try him on a murder charge and dozens of other charges.

A prosecutor said the evidence would show that Daniel Perez directed a witness to tell a false story to police about how Patricia Hughes drowned in a pool. There will be other evidence that Perez committed sex crimes against children at the compound, the prosecutor said.

A witness testified that Perez tried to persuade her and her daughter to come and live at the compound. She said he told her: "I'm here to help people, and it's all about the children."

Investigators told her they have found images of her then-8-year-old daughter, shown in a sexually provocative way with her swimsuit pulled up. The images apparently had been taken in a room near the pool on the compound, without the mother's knowledge.

The mother said she and her daughter stopped going to the compound because "there was too much drinking going on."

The daughter, now 14, testified that Perez would hug her tight; "I thought it was really weird," she said. The girl said she also saw Perez kiss a teen girl on the lips and touch her bottom. The teen lived at the compound.

The girl said she and her parents became suspicious that a number of people associated with the compound had died.

Bill Hatton, a retired life insurance representative, testified about policies taken out on members of the compound, including those who died, and said that Perez directed the amounts and who would be the beneficiary.

When defense attorney Steve Osburn asked if there was anything odd, Hatton replied, "Yeah, ... in that Lou (the fake name he used) was there all the time directing it ... I didn't understand how that all came down."

Hatton said Perez and Hughes told him that they had "just kind of formed a bond together, the family units" and that it "didn't operate like most families"

After listening to Hatton, Perez, wearing an orange jail jumpsuit, handcuffs and leg shackles, smiled.

When prosecutor Kim Parker asked Hatton if Perez ever took out a life insurance policy on his own life, Hatton, said, "No, he did not."

Hatton said he first met Perez, who he knew as Lou Castro, around 2002.

A $1 million policy had been obtained on Hughes' life. She said she was manager of an estate that was supposedly Perez's sister's estate, Hatton said.

At the same time, a life insurance policy was taken out on the life of Brian Hughes, Hughes' husband. His policy was for $250,000. After both died in what was determined to be accidents, the actual payout was double for each because of an accidental death benefit, or $2 million for Patricia Hughes and $500,000 for Brian Hughes.

The beneficiaries were members of the compound other than Perez.

Hatton said Perez led him to think that he had cattle in South Dakota, that he was a Native American and that the cattle were on government land.

Perez, 52, is charged with first-degree murder in the 2003 death of Patricia Hughes, 26, at one of the houses that made up the rural compound on North Oliver between Valley Center and Kechi. For years, her death was thought to have been an accidental drowning at a swimming pool on the property. Until now, authorities have not said how she died or how they came to accuse Perez of killing her.

According to court documents, Perez used aliases and false identification and had been a fugitive since 1997 from Texas, where he faced sentencing for child sex charges. Now, he faces nearly 40 separate charges in Sedgwick County, including multiple sex crimes against children and filing false applications for life insurance; the crimes occurred from 2002 to 2010, the charges say.

A series of deaths in Kansas and other states -- all people associated with Perez and his traveling entourage -- has been raising questions for years. According to a court document, there have been about a dozen deaths involving members of the group, who lived off life insurance payouts resulting from the deaths.

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