The report of the supposed tragedy came on the evening of March 11 from Scott Steele's distraught Swedish girlfriend: Vacationing on Santa Catalina Island, the Dana Point businessman and his 3-year-old son, Schyler, had gone out on the water early that morning in an inflatable boat but hadn't returned.
Fearful of a drowning, several dozen U.S. Coast Guard searchers combed frantically through the night by air and sea for the missing father and son, but they emerged empty-handed.
Law enforcement officials now believe that the searchers were only wasting their time on a hoax.
Steele, they say, was already on his way with his son to Sweden to later meet up with his girlfriend, leaving behind an estranged wife in Tustin who had legal custody of the boy, and a string of criminal fraud charges in Orange and Riverside counties.
But on Friday, Steele's international adventure appeared to have come to an end when Swedish authorities arrested him at the home of his girlfriend and placed his son in the temporary custody of the state.
"This is just such an incredible relief," said 27-year-old Marci Helsley Steele, the estranged wife and Schyler's mother.
"It's been so hard. Ever since this whole thing happened, my whole life has been on hold. Some days, it looks like they've found them; the next day they're gone; I feel like I'm on a roller-coaster," she said.
"Now I just can't wait to go over and get my son back," she said, adding that she has had legal custody of the child since the couple's separation in the fall of 1987. The father, who lived most recently in Riverside County, was limited to twice-monthly visits, she said.
Marci Steele plans to go to Sweden this weekend to bring her son back to Tustin, and U.S. law enforcement officials who will accompany her said they also expect to pursue Scott Steele's extradition to the United States.
If Steele is extradited from Sweden, he faces charges of child abduction atop several sets of criminal charges that officials said are pending against him under various assumed names.
The most serious of those is a 32-count warrant on charges of grand theft, perjury and forgery that was filed against Steele late last year. State Department of Motor Vehicle investigators allege that Steele, running a Dana Point "gray-market" auto firm that imported and registered European cars, forged tax forms to pocket more than $44,000 that should have gone to the state.
Steele, who officials said has a prior conviction in Santa Barbara for credit-card theft, is also wanted in Riverside County on suspicion of passing bad checks.
And Newport Beach police say that they are also still investigating Steele for allegedly having run a boiler-room scam that robbed local precious-metal investors of more than $100,000 in 1987. No charges have been filed in that case.
"This guy was a real operator, plain and simple," said Bruce Rouse, a senior investigator with the Riverside County district attorney's office who has followed the case closely since Steele's mysterious March 11 disappearance.
Gunnar Edlund, an officer with the Uppsala Police Department in Sweden who is handling the Steele case, said in a telephone interview that Steele was arrested without incident around 2:30 p.m. Friday, Swedish time, at the home of his girlfriend, Susanne Pettersson.
Pettersson, the woman who allegedly made the false report about the boat disappearance off Catalina, was a live-in nanny to Schyler while Marci and Scott Steele were still living together in both Temecula and Dana Point, Marci Steele said. She added she believes that her husband and Pettersson--who is now more than 7 months pregnant--were romantically linked even before the Steeles' separation.
Edlund said "there had been a plea from the U.S. government to the Swedish government for his arrest, and those are the grounds we have been acting on."
Edlund, who said he spoke with Steele at length in the Uppsala city jail, said: "He claims that he has come to Sweden with his son to get a fair chance to defend himself (against the pending U.S. charges). He says he can't get a fair trial in the United States, that his ex-wife is trying to make him look bad.
"He seemed determined to get custody of his son," the officer added.
Marci Steele said that her estranged husband "is obsessed with Schyler. He would say that if he couldn't have him, no one could." But, she said, she believes that it was the threat of criminal prosecution that prompted Steele to flee the country.
"He just hated the idea of going to jail," she added.
Law enforcement officials said they believe that Steele, along with Pettersson, planned his elaborate escape well in advance, going so far as to secure the passports of another Orange County man and his child.
"This was a sophisticated scheme," said Investigator Rouse of Riverside. "They went to great lengths, involving a lot of people. He even planned to be out of the country in advance" of the report of his disappearance.
As scheduled, Steele picked up his son from Marci Steele and took him and Pettersson for a vacation trip to Catalina island the weekend of March 10, officials said. That Saturday evening, a frantic Pettersson called authorities to say that the father and his boy were apparently lost at sea, hours after they were to return to their rented condominium from the boating trip.
Lt. Cmdr. John J. Jaskot of the Coast Guard in Long Beach, said Friday: "We took this very seriously as a legitimate distress call." The Coast Guard, undertaking what Jaskot described as a massive search, sent out five different helicopter teams, two jet aircraft, an 82-foot patrol boat and other search teams to try to find the Steeles.
It was not until the next day--Sunday--that the search was suspended after the Coast Guard's efforts were largely exhausted and police investigators came across information from friends and relatives to suggest that the boating accident might be a ruse.
But by then it was too late.
Investigator Rouse said he believes that on March 10--a day before his disappearance was even reported--Steele took his son on a commercial ferry from Catalina to San Pedro, then caught a flight from Los Angeles International Airport under assumed names to West Germany and then on to Sweden.
There, they met up later with Pettersson, who left the country March 16 before police could detain her, Rouse said. She is now wanted for aiding and abetting in a child abduction.
Steele and Pettersson left behind a $550,000 house in Riverside County along with virtually all of their personal property, which they later instructed neighbors to try to sell, Rouse said, adding: "They just up and left with nothing but a few clothes."
Rouse said that after the hoax was discovered, he stayed in close touch with U.S. State and Justice Department officials as well as Swedish authorities to try to track down the elusive Steele--but with little success until Friday.
Marci Steele said that she was "shocked and hysterical" upon first learning 7 weeks ago about the report of her son's disappearance.
The report was particularly unnerving, she said, because "I sensed that something was wrong the whole week before they left. . . . I had just had a dream that Schyler was drowning."
But she said she soon began to suspect that the supposed accident may have been prearranged. "I just knew sooner or later he was going to disappear with Schyler," Marci Steele said.
But others conceded that they were less suspicious.
Santa Ana attorney Kenneth D. Miller, who had been defending Steele against the pending charges in the "gray-market" cars case, said that until hearing the news of Steele's arrest from a reporter Friday, he had assumed his client was still missing off Catalina.
He recalled a phone call soon after the disappearance from Pettersson. "She was hysterical, said they were lost at sea. And I had no reason to believe otherwise," Miller said.
"I'm glad to hear he's still alive," the defense attorney said. "But if this guy in Sweden is truly him, he's obviously in a lot of trouble."