For decades he's been dismissed as a conspiracy theorist who killed himself after realising he'd been duped. But has the truth finally been uncovered about CIA drug trafficking, Ronald Reagan and the 'Octopus murders'?

At around noon on August 10, 1991, housekeeping staff cleaning the Sheraton motel in Martinsburg, West Virginia, made a discovery in the bathroom of Room 517 so disturbing that one of them fainted.

Lying naked in the bloodied bathtub was a 44-year-old man named Danny Casolaro. His wrists had been slashed a dozen times, the wounds so deep they had cut his tendons. Bloody handprints were smeared all over the wall.

The bath also contained a single-edge razor blade. Nearby was a half-finished bottle of wine, empty beer cans were in the waste bin and on the bedroom desk was what appeared to be a brief and unsigned suicide note.

‘To those who I love the most: Please forgive me for the worst possible thing I could have done. Most of all I’m sorry to my son,’ it read. ‘I know deep down inside that God will let me in.’

To the local coroner and police detectives, it seemed clear that Casolaro, a freelance writer, had taken his own life. They found no signs of a struggle or forced entry.

Police concluded that, after a night of heavy drinking, he’d taken some pills, put a plastic bag over his head and slit his wrists.

And yet his family and friends were convinced he’d been murdered. They knew that he detested the sight of blood, so would never have chosen such a gruesome method. What’s more, he hated anyone seeing him naked.

They also knew that, far from being suicidal, in the weeks before his death, Danny – who had spent months conducting research for what promised to be an explosive new book – had been excited about the prospect of meeting a crucial source in Martinsburg, 60 miles from Washington DC, who would give him the final evidence he needed for his expose.

He had gone there with the briefcase in which he always carried his research material but neither the briefcase nor his papers were anywhere to be found. And most alarmingly of all, he had been receiving anonymous death threats by phone and had recently warned his doctor, brother and a close friend that his investigation was so sensitive that if any mishap should befall him, they shouldn’t believe it was an accident.

For Casolaro was convinced he had uncovered a shadowy international political conspiracy that went to the heart of the US government. Profits from CIA-sanctioned drug-trafficking, he believed, were being used to finance covert operations that Congress wouldn’t authorise, many of them involving the supply of weapons to dubious allies abroad.

It was a conspiracy that connected such crises as the 1979 Iranian hostage drama, the Iran-Contra scandal of the mid-1980s and the 1991 collapse of the fraudulent Bank of Credit and Commerce International (BCCI).

Casolaro dubbed the sinister cabal at the heart of these events ‘the Octopus’, pairing each of its eight tentacles with a former powerful government official, most of whom had, at one time or another, been at the top of the CIA. They even included President George H W Bush, himself the agency’s former boss.

By exposing these figures, who had one foot in US intelligence and the other in organised crime – and whose ‘tentacles can reach into almost any part of government in any country’ – the dogged reporter said he was confident he would ‘rewrite American history’.

His incredible story, which sounds like the plot of a far-fetched Hollywood thriller, became a US cause celebre. Now, it has been revisited in an enthralling new four-part Netflix documentary series: American Conspiracy: The Octopus Murders.

It poses the question: was Casolaro – an affable suburban father who dreamed of being a famous writer – the victim of criminal conspirators who wanted to stop him exposing them? Or was he a man driven to suicide after allowing paranoid theories to exert such a grip on him that, when he couldn’t prove them, he took his own life in despair?

The new documentary – an addictive mix of revelation and suspense has helped make it one of Netflix’s most popular shows – throws up an intriguing third possibility.

While Casolaro didn’t prove the existence of the Octopus, did his relentless investigations nevertheless mean he made some deeply dangerous enemies in the murky world of intelligence, at least one of whom decided he couldn’t be allowed to live?

If so there’s certainly no shortage of suspects.

‘There are a lot of very bad, very dark and very evil people involved in this story – people that Danny couldn’t recognise because he’d never been around people like that,’ close friend Ann Klenk tells the documentary.

The journey to that drab motel room in West Virginia had started a year earlier when Casolaro began investigating a long-running legal battle between a computer software company and the US government.

Casolaro, one of seven children, was the charming and good-looking scion of a well-to-do Italian-American family, who had gone on to marry a former Miss Virginia. When his marriage failed after ten years, he had been granted legal custody of his son.

After dabbling in fiction writing and journalism, he specialised in covering America’s nascent computer industry and, in 1990, a colleague drew his attention to a story that was to become the focus of his attention until the day he died.

It was a protracted legal case involving Inslaw, a computer software company that in 1983 had created a revolutionary program, called PROMIS, for the US Justice Department. This allowed prosecutors and police to track criminal cases worldwide, avoiding the need for exhaustive trawls through paper files.

The software was far ahead of its time and had potential far beyond looking up criminal cases. But Inslaw later sued the government for allegedly reneging on the contract, stealing the software and trying to send the company into bankruptcy. The Justice Department countered that it was simply a contractual dispute and Inslaw had overcharged.

When Casolaro contacted Inslaw’s owner, Bill Hamilton – a former employee of the National Security Agency, part of the Department of Defence – to discuss the case, he heard an extremely bizarre story.

Hamilton said he had been contacted by a mysterious figure named Michael Riconosciuto who, having revealed he knew a surprisingly large amount about his software, had provided him with a jaw-dropping explanation for the Justice Department’s behaviour.

Riconosciuto claimed senior officials in the Ronald Reagan administration had given the rights to the lucrative Inslaw software to a businessman named Earl Brian, as payment for a favour he’d done for Reagan back in 1980 when he was embarking on his run for president.

This favour had allegedly involved flying secretly to Iran in October that year at the direction of Reagan’s campaign director, to meet Iran’s Islamic leaders in Tehran. He was asked to persuade them to keep hold of the American hostages they had seized from the US Embassy 11 months earlier until after the election in which Reagan was taking on incumbent president, Jimmy Carter.

This was achieved, said Riconosciuto – who claimed to have accompanied Brian to Iran – by bribing them to the tune of $40million.

This now notorious plot to prevent a so-called ‘October Surprise’, in which Carter could have snatched victory by securing the prisoners’ release, has since been dismissed as fantasy by not one but two Congressional investigations.

However, sceptics, including members of Carter’s campaign team, always considered it highly suspicious that the hostages were released within hours of Reagan’s victory.

Riconosciuto, a gifted computer expert and ‘mad scientist’ type who claimed he had worked for US intelligence, became Casolaro’s main source.

And he spun quite a tale. According to Riconosciuto, Brian and his cronies used a remote Native American reservation in the southern California desert as a covert weapons-development base, which secretly supplied pro-US forces in Latin America, such as the Contra rebels in Nicaragua.

Just for good measure, the operation also had links to the Mafia through the casino operation that John Nichols, a longtime intelligence agent, established after befriending members of the impoverished 26-strong Cabazon tribe.

According to the documentary, the ‘Octopus’ conspiracy claimed three early victims in 1981 when the Cabazon tribe’s head of security and two friends were shot in the head ‘execution-style’ after reportedly discovering the truth about the secret site, including plans to build chemical weapons.

An ex-police officer who investigated the killings tells the documentary that he identified who was responsible – implicating Nichols among others – only for the case to be strangely dropped.

Six months later, in January 1982, came another Octopus-related murder. Police in San Francisco were called to an address where they found the body of a Cabazon conspirator called Paul Morasca, who appeared to have been tortured – ‘hog-tied’ in such a way that he would eventually strangle himself.

The murder squad detective who handled the investigation tells the documentary they’d been alerted to the body by Riconosciuto, who claimed the victim was the Cabazon operation’s money man, with access to offshore bank accounts holding $1billion.

The ex-cop reveals that when he and a colleague went out to the reservation and spoke to Nichols, he admitted they were doing military research and development for the government but bafflingly added that he was actually a ‘psychiatric social worker’ treating Riconosciuto.

Meanwhile, Morasca’s girlfriend told the police Morasca had been very frightened of a ‘CIA hitman’ named ‘Jason Smith’. In fact, the police discovered, Jason was the codename for an FBI informant, Phillip Thompson, a man with a long and violent criminal record who – in 2008 – would be jailed for life for the rape and murder of a 21-year-old woman in 1971.

The FBI told detectives it had arranged for Thompson to get to know Riconosciuto and Morasca because it believed the pair were running a multi-million-dollar business manufacturing and selling methamphetamine.

Although nobody has ever been charged with killing Morasca, Riconosciuto claims Thompson confessed to him that he did it. So did ‘hotel bath corpse’ Danny Casolaro, who planned to devote the first chapter of his book to the Morasca killing, die because he was about to expose Phillip Thompson?

Casolaro never told anyone exactly who he was meeting in West Virginia. It’s possible that he made it all up or, as police insisted at the time, nobody turned up to meet him.

His family admit he was running out of money and had been told by publishers that he needed stronger evidence before they could offer him a book deal. His behaviour had become increasingly odd as he fixated on his investigation. ‘He was in a downward spiral,’ says a close friend.

However, the documentary reveals an oddly overlooked police statement from a guest in the adjoining motel room, who says that she saw a dark-haired man going into Casolaro’s room who looked nothing like the blond journalist. Someone else claimed they saw the writer with a man in the motel lounge.

The ‘official’ government view of Casolaro was that he was conned by the devious likes of Riconosciuto into believing in a conspiracy that never existed and, when he realised he’d been duped, killed himself.

But when it comes to the Octopus conspiracy, if one door closes, another invariably opens, and – with all the murky glamour of its dark deeds and tentacles of corruption – it seems too irresistible to let go.