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McStay murder mystery: Who is Dan Kavanaugh?

Within a week of the family's disappearance in 2010, large sums of money started being transferred out of Joseph McStay's business bank account.

SAN DIEGO, Calif. (CBS 8) -- Joseph McStay, 40, his wife Summer McStay, 43, and their two sons, Gianni, 4, and Joey, Jr., 3, went missing from their Fallbrook home in February 2010.

It would be almost four years before the skeletal remains of the family were discovered in shallow graves near Victorville on November 11.

Within a week of the family's disappearance in 2010, large sums of money started being transferred out of Joseph McStay's business bank account.

Where was the money going? Who was transferring it and why?

CBS News 8 caught up with the employee who admitted to his involvement in some of those transactions.

At first, Dan Kavanaugh, 32, was reluctant to talk about his former employer, Joseph McStay, when a CBS News 8 camera crew came knocking at his apartment door in Little Italy.

"No news questions right now bud, sorry, can't do it," said Kavanaugh.

A web designer by trade, Kavanaugh had been in charge of developing the online presence for Earth Inspired Products, Joseph McStay's custom fountain design and manufacturing business.

Eventually, Kavanaugh opened up to CBS News 8, denying that he had anything to do with the family's disappearance or murder.

Kavanaugh said he was in Oahu, Hawaii on a surfing trip at the time the family went missing.

"I was in Hawaii. You guys know that, right?" said Kavanaugh as he stood in the threshold of his apartment.

In a subsequent telephone interview, Kavanaugh looked up his online itinerary from the surfing vacation, and claimed he was in Oahu from Jan. 4, 2010 to Feb. 17, 2010, when he returned to San Diego.

"I have a hundred witnesses that saw me there (in Oahu) and can attest that I was there the whole time," said Kavanaugh.

Emails sent to Joseph McStay – and later retrieved by family members – confirmed Kavanaugh received thousands of dollars from the Earth Inspired Products business account after the McStays went missing.

"So, there are some curious withdrawals for business expenses and things around the time of the disappearance; but when you look further, the guy was 2,500 miles away. He has an alibi. And I had no resources to get anything like that done or motive," explained Kavanaugh.

Kavanaugh said the transferred money was used to keep the fountain business going during Joseph McStay's unexplained absence.

He said he was working with Joseph's brother, Michael McStay, and Joseph's mother, Susan Blake, at the time the withdrawals were made.

"I actually transferred it (the money) to myself with Mike's knowledge," he said. "None of that money went to me. That money went to vendors, welders and manufacturers."

"Mike and I and his mom tried to salvage and run the business that we had built for a long time," Kavanaugh said.

But without Joseph McStay at the helm, the business would eventually fold.

In July 2011, Kavanaugh ended up selling McStay's business, Earth Inspired Products, to two individuals named Matthew Schneider and Joaquin Quintero, according to court records.

The sale of Earth Inspired Products and the subsequent creation of a corporation called Water Feature Supply, Inc. resulted in a lawsuit being filed in February 2012 in San Diego Superior Court  (case # 37.2012-00092477).

The lawsuit detailed ownership disputes between the plaintiffs, Schneider and Quintero, and another party named Patrick Maloy.

The lawsuit was dismissed in May of 2012 and Maloy retained ownership of the Water Feature Supply domain and business.

Joseph McStay's original web site domain name associated with Earth Inspired Products currently directs users back to McStayFamily.org.

Joseph McStay's father, Patrick McStay, told CBS News 8 that Kavanaugh had no right to sell the business to Schneider and Quintero.

"So, are you going to tell me that Kavanaugh was running the company? He had no authority to run anything. He was a nobody. He was a web guy. He took care of the web and that's it," said Patrick McStay. "I think he wanted to gain access to the business and sell it."

Kavanaugh saw his role in Earth Inspired Products differently.

"I didn't just do the web site," he said. "I created all of the traffic to the site. Joe did very little. He just answered the phone. I built the entire business."

Court records show Kavanaugh had trouble with the law in the years after the McStays disappeared.

Kavanaugh pleaded guilty in San Diego Superior Court in two, separate domestic violence cases involving altercations with girlfriends, records show.

In August 2011, Kavanaugh was charged with five misdemeanor counts (in case # M134711DV).

According to a 2013 probation report obtained by CBS News 8:

On 8/1/2011 at 2:44 a.m. officers were called to **** Riveria Drive in San Diego. They heard a woman screaming from the second story of the apartment complex… The defendant (Kavanaugh) came downstairs and let officers in. Officers found the defendant's girlfriend, ****** ******* in the bedroom crying. She had abrasions on both knees.

She said the defendant pulled her out of the car and onto the ground, causing the abrasions to her knees.

Kavanaugh pleaded guilty to a single, misdemeanor count: battery of a current or former significant other, and received three years probation.

In July 2013, Kavanaugh was charged with felony domestic violence (in case # SCD249328).

Probation officers filed a sentencing report that described the incident, which occurred July 5, 2013 at 12:30 a.m.:

The victim was distraught and her dress was disheveled. She was crying and her makeup was smeared. She came out of the apartment and stood behind one of the officers. She pointed to her balcony where officers found the defendant hanging on a 4th floor ledge. The defendant was attempting to get to another balcony. At gunpoint, they directed the defendant to return to the victim's balcony and he complied.

The victim stated she was with the defendant, her boyfriend, outside her apartment building. He wanted to come to her apartment but she repeatedly told him she did not want him there. He insisted and walked with her to the elevator. She again told him she did not want him at her apartment.

The defendant was upset and grabbed her by the wrists and dragged her from the elevator, through the hall, to her apartment. She yelled for help. She said the defendant used her keys to enter the apartment and threw her on the couch. She yelled for help but the defendant covered her mouth and told her to be quiet… She attempted to leave through the front door. He grabbed her and carried her to the bedroom. He threw her on the bed and she started yelling for help. He pinned her down and covered her mouth to keep her from yelling. She was afraid and punched and kicked the defendant. She ran to the kitchen and grabbed a knife and fork. She pointed the knife at the defendant but he grabbed it away from her.

She had bruising and scratches on her wrists… She also had a scrape on her right elbow. She did not seek medical attention.

The defendant had scratch marks on his neck and chest and a scrape to the right side of his face.

The records said Kavanaugh told officers that he and his girlfriend had been drinking and that, "She was rowdy and out of hand."

He also told arresting officers that the victim "had taken ecstasy" and that she was having "a bad trip," according to the probation report.

Kavanaugh pleaded guilty in October 2013, in a plea bargain, to felony false imprisonment and was placed on formal probation.

Defense attorney Isaac Blumberg of San Diego submitted a statement of mitigation to the judge in the case, which included several letters of support from Kavanaugh's business associates, friends, mother and brother.

"Daniel hasn't got a mean bone in his body," his mother, Tamara Lyn Terry, wrote in her statement to the judge.

"I have four sons I raised myself… Daniel, the eldest son of mine is and always has been a kind and loving big brother. Kind to me, an overwhelmed single mother, he helped enormously, being supportive, and even helping financially. I need Daniel. Our FAMILY needs Daniel. I swear, on my honor, Daniel is worthy of your consideration and mercy," his mother wrote.

"I have known Daniel Kavanaugh to be a hardworking, honest and highly intelligent individual," restaurant owner Peter Busalacci wrote the judge.

"The quality of his work has been exceptional and his personality is always pleasant. These (restaurant) web sites have been improved considerably by his services," wrote Busalacci.

Kavanaugh remains on active probation and continues to attend court-ordered, domestic violence classes.  He has not been named as a suspect by law enforcement in the McStay murders.

"As far as you asking me if I'm a violent person, the answer is a resounding no. Definitely not," Kavanaugh told CBS News 8.

(This report has been updated since its original posting)