Spies stayed with her boyfriend despite the continued heat on him from Smith and Tempe police.

In early 1985, she borrowed $9,000 from her father and turned over the money (with the father's knowledge) to Ortloff.

Tom Carlson
Kathleen Smith
Kathleen Smith

Ortloff says he still wanted to try to reinvigorate the Subway venture, and planned to repay that debt after he collected the life-insurance money still pending from Kathleen's policies.

But none of it happened. The ROKS Subway project was kaput, and Ortloff never did collect a penny of the life-insurance proceeds. And he never did repay the $9,000 loan from Jennifer's father, Gary.

In April 1985, John Lyon met with Gary Spies in Southern California.

Afterward, Lyon said on tape that he'd alerted Jennifer's dad that "if it's a fact that Robert killed that woman, and if it's a fact that Jennifer knows it, and if it's a fact that Jennifer becomes a threat to him, her life ain't worth a plugged nickel, okay?"

Robert Ortloff asked Jennifer Spies to marry him around Memorial Day 1985, and she said yes.

In early June, they took out life-insurance policies on each other (Ortloff listed Spies as sole beneficiary of a $100,000 policy on himself, and vice versa). Spies also took out an additional $50,000 policy, naming her father as a 25 percent beneficiary and Ortloff as 75 percent.

The very next day, Tempe detectives drove to Fiesta Flowers in an unmarked car, where Spies still was working with her new fiancé.

They asked her to speak with them in the car, where they informed her they knew about the newly inked life-insurance policies. They equated those policies to those Ortloff had taken out on Kathleen Smith shortly before the murder, all but telling her that she could be his next victim.

The next morning, the detectives called Spies at the shop and, she said later, told her she was in immediate danger. She drove Ortloff's car to the Tempe station and learned that her father had hired bigtime Phoenix criminal-defense lawyer Tom Henze to represent her.

That night, the authorities put up Spies at a hotel, and a meeting was arranged for the following day at Henze's office with members of the County Attorney's Office.

On June 7, 1985, Spies took questions from a deputy county attorney after he promised her immunity from prosecution in the case.

For the first time, Spies admitted she'd been lying about Ortloff's whereabouts when she'd awakened on the morning of Kathleen's murder.

But Spies swore she had been truthful about everything else, including that she hadn't at first seen the scratches on Ortloff's neck. She reiterated that Robert never had made any incriminating statements to her.

"I don't believe that he did anything wrong," Spies told the disappointed authorities at the secret session.

Later that day, Spies returned to California, leaving her personal belongings behind. Her father came to Tempe a week later to pick them up from Ortloff.

The wedding was off.

On September 26, 1985, Tempe police sent their findings to the County Attorney's Office and asked that murder charges be filed against Robert Ortloff.

But prosecutors declined to take the case to a grand jury.

Ortloff continued to toil at Fiesta Flowers for the rest of 1985. He dated other young women, including Anna Carpenter, who had replaced Spies as an employee at Fiesta.

She would have a huge role in the next chapter of Ortloff's legal saga, but that's getting ahead of the story.

On January 31, 1986, federal authorities arrested Robert Ortloff on charges of attempting to murder soldier Thad Gulczynski with a mail bomb he'd allegedly sent from Fiesta Flowers to Fort Hood, Texas.

The motive in that case? Gulczynski allegedly had stolen Carpenter's affections from Ortloff.

Ortloff has been in custody since that day.

As for Rick Schibler, the former murder suspect, life after Kathleen Smith's death got much better, financially speaking.

With Schibler still at the helm, Subway now has more than 300 franchises in Arizona, and he resides in a multimillion-dollar Scottsdale home abutting a golf course.

Schibler would have remained a footnote in an unsolved cold case had it not been for Fred Tokars coming forward in 1999 with a wild tale about enticing a murder confession out of fellow prisoner Ortloff.

Just last year, someone uncovered a memo in the files of Robert Ortloff's former civil attorney, R. Kelly Hocker, and sent it to Ortloff.

The document, the legitimacy of which has been confirmed by Hocker's former secretary, was dated May 2, 1985, around the time Tempe police were about to make their assault on Jennifer Spies.

"From a confidential source, it was learned that Kathleen was having an affair [with] Rick Schibler," the memo said.

"Apparently, it had been going on for several weeks prior to her death. Around the same time, Kathleen found out that Rick had been responsible for taking the space that she and Robert had located" and that Schibler had signed the lease notwithstanding the huge plumbing problems.

"Apparently, Kathleen was very, very angry over hearing these things . . . and this may have prompted a number of actions which included and ranged from confronting him, socking him, cussing him, threatening him, or all of the above."

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