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Watts, from Frederick, Colorado, murdered his wife Shanann, 34, and their two daughters Bella, four, and Celeste, three, in cold blood in 2018.
At first, Watts maintained his innocence, claiming his family had mysteriously vanished - but CCTV footage obtained from his neighbour made it apparent there was far more to his story.
In the clip from the Netflix documentary (seen below) footage from a police officer shows a visibly nervous Watts in his living room, while his savvy neighbour Nate Trinastich carefully rewinds back through a CCTV recording.
The CCTV footage came from a camera located on Nate's property, which overlooked Watts' driveway.
Nate has become suspicious about his neighbour's version of events, as he recalled seeing him loading up his car at 5am, which was an unusually early wake-up time.
Added to that, the car was parked in a different spot than usual. Nate concluded that something just didn't add up.
Watching the clip, the change in Watts' body language is clear, as he becomes increasingly agitated.
Later, when Watts has left, Nate tells the police: "Watch. You'll see him get out and then he walks back and forth a couple of times."
He also comments on Watts' body language, observing that he is "fidgety", "rocking back and forth" and overall "not acting right".
Nate said of the footage: "He was loading tools, but I thought that was a little bit odd because I had never seen him really back the truck into the driveway ever.
"He always parked it out front, so I definitely thought it was kind of odd.
"The other thing I thought that was definitely weird was he wasn't watching the footage at all."
He went on: 'He would look at it for a second then go back to his phone or look at it for a second and then look away and if my family was missing, I would be glued to that TV 100% to see if I could see absolutely anything.'
The CCTV recording, combined with Nate's statement, would become a milestone piece of evidence in the early stages of the investigation into Watts.
It would later transpire that Watts had killed Shanann by strangulation, which in turn caused the death of their unborn son, Niko.
Watts then smothered his daughters Bella and Celeste to death.
He disposed of his daughters' bodies in oil tanks and buried his wife in a shallow grave at his place of work.
Watts eventually confessed to his crimes in November 2018 after failing a lie detector test. He went on to receive three consecutive life sentences and is not eligible for parole.
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