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Authorities say suspect in family killings owed victim money

FILE - This June 15, 2015 file photo Charles Merritt, left, speaks with his attorney, Jim Terrell, before his preliminary hearing in San Bernardino, Calif. Authorities say Merritt, charged with murdering his business partner and partner's family and burying them in shallow desert graves, was getting fired and had a $30,000 gambling debt. Investigators say Merritt's cellphone was linked to a tower near the desert gravesites shortly after the family went missing. (James Quigg/The Victor Valley Daily Press via AP, Pool,File)

A Southern California man charged with killing his business associate, the man’s wife and two preschool-aged children owed $30,000 to the victim and had other debts, authorities said in court records released Wednesday.

The newly unsealed documents show San Bernardino County Sheriff’s investigators learned that victim Joseph McStay lent defendant Charles “Chase” Merritt money to cover a gambling debt before McStay and his family disappeared in February 2010. Merritt also owed more than $20,000 in back taxes.

A third business associate, Daniel Kavanaugh, also told investigators that McStay, who owned a decorative water fountain business, planned to fire Merritt, authorities said in 305 pages of search warrants and affidavits filed in the case. The men partnered in the business, which was started by McStay, and Merritt was hired to design the fountains, the papers said.

Investigators also found quotes “to do with remorse, forgiveness and murder” while serving a search warrant at Merritt’s home in October 2014, the documents show. The papers don’t detail what the quotes were.

The records show how San Bernardino County investigators honed in on Merritt as a suspect after the family’s remains were found in 2013 in shallow desert graves about 100 miles from their San Diego County home.

Merritt has pleaded not guilty to the murders of McStay; McStay’s wife, Summer, 43; 4-year-old son Gianni and 3-year-old Joseph Jr. He was arrested last year.

The case initially puzzled investigators and for months it was considered a missing persons investigation. Authorities noted there were no signs of forced entry at the McStay home.

Authorities found the victims’ remains along with a rusty 3-pound sledgehammer and a child’s pants and diaper in San Bernardino County. Authorities said all four suffered blunt force trauma to the head, with Gianni receiving at least seven blows.

Detectives questioned Merritt two days after a missing persons report was filed, and noticed he referred to McStay in the past tense.

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