David Phelps was the former Chief of the Gates Police Department and direct predecessor to Chief Nick Monohan. He reportedly had "retired to Mexico" as Deputy Leigh Turner told Monohan when he first arrived at The Gates police headquarters. However, his body was found by state police near Green River of Franklin County two or so days after Monohan arrived. He and Deputies Marcus Jordan and Turner responded to the scene. Judging from the state of the body, he wasn't dead for very long with no apparent visually detectable decomposition albeit he did give off a strong odor. He was murdered with a gunshot wound to the back of his head. (Pilot).
According to the Franklyn pathologist Phelps died from a gunshot wound to the back of his head caused by a 9mm bullet, severing the brain stem meaning it was a very competent execution murder; "Very clean" as the coroner stated. Outside of the morgue Monohan and a waiting Frank Buckley discussed how the case would be handled in the public with Monohan wanting to emphasize catching a cop killer and Buckley worried about the psychological well being of the Gates residents.
During the investigation it was uncovered that Phelps was a corrupt policeman. According to Chad Taylor a Gates policeman from approximately late 2007 to early 2009 who was ostensibly fired for "insubordination". That is according to Taylor and euphemism for "knowing the Chief's business". He aided the investigation including one of the questionable things about Phelps Taylor noticed was that he owned a $70,000 SUV on a Chief's salary stating that Chief Phelps would for a price he made police reports disappear including that of Simon Ford and Claire Radcliff. Simon Ford after earlier denying that he had close contact with Phelps had to admit that he had contact with him after all after his fingerprints were found on Phelps's truck after Chad Taylor suggested running resident's prints against the six unknown prints found on Phelps's SUV. Simon admitted to paying $10,000 to cover for his son Lukas for some misdeed.
In October of 2009 Claire Radcliff was pulled over by a Gates police officer for erratic driving. The officer noted the copious amount of blood on the front of her shirt and sleeve. According the Claire when she recounted the incident to Dylan her husband after he was questioned about it by Chief Monohan, she was coming home with blood bank type bags of blood from Dylan's biotech company. Apparently not being able to explain it she gave Phelps a bribe when he heavily hinted that is what it was going to take for the matter to be overlooked, that is the incident report was made to disappear. She paid him off in part according to Claire that if it got back to Dylan he would never believe the truth and would think she killed someone.
Leigh Turner was going through Phelps's financial records as ordered by Monohan when she found out that he purchased the SUV for $70,000 three months prior in addition to a $75,000 for a condominium in Cabo, and $20,000 for a boat, suggesting the many payoffs he received. However what caught the eye was the fact that Phelps apparently brought the SUV three months prior. He told Turner to run the employee fingerprint database for comparisons with the now five unknown sets of prints on the SUV. There was one hit: That of former Deputy Chad Taylor, despite saying that he had no contact with the former chief for over a year. His fingerprints on a vehicle that was owned by Phelps for no more than three months seemed to bely his claim.
In a search of Taylor's apartment by Turner and Jordan with Taylor and Monohan present. Monohan told Taylor out how the finding of his fingerprints contradicted his story. Taylor maintained that stance, confused as to how his fingerprints could possibly be on the SUV. Then a gun was found by Turner that was the same caliber as the murder weapon. Taylor acknowledged that it was his. A dubious Monohan placed Taylor under arrest for Phelps's murder despite Taylor's confused denials.
Events have risen the possibility that Chad Taylor was framed for the murder of David Phelps. A bag of Devon's Day Spa "Vine of the Soul" Tea was found in his apartment despite its high cost and his being unemployed and not being able to physically patronize her business because he was not allowed on Gates property. When these facts were brought up to Devon, who is a witch, she implied that he used her website to order the tea. It has since been shown in the episode Digging the Dirt that the effect of the tea on the person is similar to a truth serum of a sort, where the person who drinks the tea will recount any secret when asked then will forget the revelation when commanded to do so. This has raised the possibility that Taylor could had been under some sort of hypnotic suggestion by Devon. She also denied knowing him well only knowing he seemed like a "nice man". (What Lies Beneath)