The Modesto Bee reported that police met with the missing woman's family this week and informed them that they believe Scott Peterson was involved in Laci Peterson's Christmas Eve disappearance because he had recently taken out a $250,000 life insurance policy on his wife and was also having an affair with another woman.
The revelations appeared to stagger the volunteer search effort that had begun handing out flyers and fielding tips within hours of Laci Peterson being reported missing. The search's headquarters was shut temporarily even as leaders traveled to open a branch in Los Angeles.
"Obviously, it was hard to close it down," a longtime friend of Laci Peterson's, who asked not to be identified, told the Bee. "Everybody's numb right now. It's hard to hear that he is not the person we all thought he was."
Modesto police issued a statement Friday saying they would not comment on the newspaper's report and would have nothing to say about the case unless there was a major break.
Laci Peterson, 27, vanished sometime Dec. 24 while her husband was supposedly off fishing by himself on San Francisco Bay, about 70 miles west of Modesto. Scott Peterson told police his wife, who is nine months pregnant, had planned to take the family dog for a walk along a nearby trail that morning.
A neighbor found the golden retriever near the Peterson home later that day, and Scott Peterson said he had been unable to reach his wife by cell phone before returning home.
Police have publicly maintained that Scott Peterson is not a suspect in his wife's disappearance, however he has not been ruled out, either.
"We're not going to confirm or deny anything," Police Chief Roy Wasden told the Bee. "We're not going to discuss this investigation."
Family members told the newspaper that police told them of their suspicions Wednesday night because the news was about to be broken by a tabloid.
CNN reported that police had obtained photos of Scott Peterson and the unidentified Fresno woman and had shown them to Laci Peterson's relatives.
Scott Peterson, who has largely stayed away from the media, told Sacramento television KCRA Thursday night that he was not overly concerned with the Bee's report and actually welcomed the new publicity for the case.
"You can make me out to be the biggest villain in the world if you want to. As long as it keeps her photograph in the press, they can think anything they want about me," Scott Peterson said.
"What we hope to accomplish is people will come by and pick up a few flyers," Brad Sultzman, a leader of the volunteer effort, told reporters Thursday night after arriving at Los Angeles International Airport.
CNN reported that the plans to open the search center at a Westwood hotel Friday were uncertain.
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