Murder and Millions

updated 10/13/2003 AT 01:00 AM EDT

originally published 10/13/2003 AT 01:00 AM EDT

On a balmy summer evening he took her to their favorite bar, at Manhattan's Stanhope Hotel. He made sure to order her favorite drink, a Cosmopolitan. Then, when the moment was right, Danny Pelosi raised his glass and toasted his wife, Generosa—or more precisely, her ashes, still in a box from the Frank E. Campbell Funeral Home. "We had a booth that we sat in every night," says Pelosi, 40, of the send-off he staged the night after Generosa, 46, died of cancer on Aug. 22. "I drank a beer, and then I walked [the ashes] around the pond and the Great Lawn in Central Park."

A poignant scene, to be sure. It might have been even more touching had Pelosi not taken Generosa's ashes in violation of her will—and were he not suspected of murdering her first husband, wealthy financier Ted Ammon, 52. But bizarre as Pelosi's tête-à-tête with his wife's remains may appear, it was only the latest twist in a case already tangled by two conflicting wills, a disputed postnuptial pact, accusations of harassing behavior and a battle over custody of the Amnions' 13-year-old twins. At the same time there is mounting frustration as investigators struggle to crack the mystery of who killed Ammon, found bludgeoned in his East Hampton, N.Y., mansion two years ago. "The longer the case goes, the colder the trail gets," says Generosa's attorney Michael Dowd. "That's unforgivable."

The man in the middle of this mess is Pelosi, an electrical contractor with several prior arrests—at least three for drunk driving—and a possible murder indictment hanging over his head (a special Suffolk County grand jury is continuing to hear evidence in the case). Pelosi, who had been dating Generosa for six months before the murder (he married her three months later), authorized the installation of the security system at Ammon's English-style East Hampton spread. Given that there were no signs of a break-in, police believe the system was shut off the weekend Ammon was killed (they have yet to reveal an exact time). Pelosi's alibi is that he attended a wedding that weekend.
"All I can tell you," he says, "is that I had nothing to do with it."

The couple's affair began during Generosa's contentious divorce from Ammon, a dashing banker who helped engineer the $25 billion takeover of RJR Nabisco in 1988. Ammon and Generosa met in 1983, when she was a Manhattan real estate agent showing him apartments after his divorce from his first wife. Married in 1986, they adopted Ukrainian twins Alexa and Gregory in 1992. But their relationship crumbled after they moved to a baronial manor in Ewhurst, England, in 1999. Generosa accused Ammon of cheating on her during his trips to New York; the couple separated and fought bitterly over the twins.

Ammon was murdered days before final terms of the divorce were to be set, clearing the way for Generosa to wed Pelosi in January 2002. "I hit the Lotto," says Pelosi, who has three children from his first marriage. "She bought me $1,500 bottles of wine, she got new caps put on my teeth. I gave her what the guy with all the money couldn't. She loved a man with a tool belt." The couple lived for a year in a cozy four-bedroom home in Center Moriches, N.Y. Accustomed to private jets and ski trips to Switzerland, the twins enrolled in public school and swam in the creek next to Pelosi's home. "The kids were in heaven," maintains Pelosi. "They liked being normal. They liked getting the school bus at 7 a.m. without a guard to walk them."

In May 2002 Generosa suffered fainting spells and was diagnosed with cancer. Pelosi says he and his wife—who had been orphaned at 10 when her own mother died from brain cancer argued constantly after she rejected some treatments. "She didn't want to lose her hair," he says. "She lost the will to live." He also claims Generosa attempted suicide several times by overdosing on medication. A few months before her death, Generosa took the twins and moved back to her East Hampton home, primarily, says her attorney, to get away from Pelosi. "He constantly wanted money from her and was frightening and harassing her," claims Dowd. "She wanted peace and quiet."

Generosa's mental state during her final weeks is now an issue in the battle not only for the twins but also for a fortune valued at $34 million. Generosa's first will after her marriage to Pelosi, prepared in 2002, awarded him nearly the entire estate. But a second will signed seven weeks before her death cut Pelosi out completely and divided the money between a trust for the twins and a charitable foundation. "I believe the will is not valid," says Pelosi. "Generosa was under a lot of medication and went through stages of delirium."

Pelosi's planned challenge of the will focuses on "the validity of her signature," says his attorney James Spiess. "The signatures on the two wills are markedly different." But first Pelosi must overturn a postnuptial agreement he signed the same day that Generosa signed the second will. It awards him $2 million and contains his pledge to waive any further rights to Generosa's estate. "I was 100 percent misled," says Pelosi of the postnup. "That document they have, I never even read." As for the scrawled signature on the second will, "It wasn't a penmanship test," says Dowd. "For months Generosa was having trouble with her right hand as a result of the cancer." Dowd also contends the second will and the postnup will hold up. "She knew exactly what she was doing, he says of his client. "And Mr. "Pelosi certainly didn't argue that she was out of her head when she gave him $2 million." That figure, he adds, "is not a bad day's pay for an out-of-work electrician."

Meanwhile Ted's sister Sandi Ammon Williams, 55, is challenging a provision in the second will naming Generosa's British housekeeper Kathryn Mayne guardian of the twins. "The children have always been a part of our family, and what they need is family," says "Williams, the married mother of three grown children. Mayne, 57, who began working for the Amnions in 1999 and nursed Generosa through her final months, is twice divorced and has two adult children. "Generosa's view is that she is a stable person and a person she could trust," says Dowd. "It was very much a friendship." Eileen Sanders, a former neighbor in England, calls Mayne "very kindhearted and caring." But someone close to Pelosi says of her, "This ain't no Mary Poppins."

Pelosi, at least, has expressed no interest in gaining custody of the twins, because, he says, his lawyers have told him that his drunk-driving convictions make him a poor prospect to get the children. "I'll back whoever is appointed guardian, if they allow me to be a part of the kids' lives," he says. "I am their best friend." But Generosa may have had other ideas. "The last thing she told me," says Dowd, "was, 'Don't let Danny be alone with my children.'" In any case, Pelosi must first fend off charges that he illegally rewired his house and stole $43,000 worth of electricity. Then he may have to defend himself against a murder charge.

For now, Alexa lives with Mayne in the Hamptons home where her father was found murdered. Following their mother's death, Gregory was sent off to a boarding school. "It is unbelievable what they've been through," says a close family friend, who often discussed some of those misfortunes with Generosa. "I used to say, 'I'll write the book of your life, and then they can make it into a movie,'" says the friend. "And Generosa would say, 'No, don't bother, because no one would ever believe you.'"

Fannie Weinstein in New York City, Tom Duffy in East Hampton and Center Moriches and Ellen Tumposky in London

From Our Partners