I doubt that you know the whole story. But it really doesn't matter. They will work things out or not-- it's their life. I wouldn't recommend going into any financial deals with the guy, however. And if he's truly wanted and a fugitive, that brings up legal questions about reporting...no idea if that's the case, though.

You seem to like Kathy a lot, so why not just be her friend and talk to her about the rumors and articles and how they make you uncomfortable? "Perfectly innocent" strikes me as a bit naive, but on the other hand there might be some value in experiencing the friendship on a present basis.

I have a friend with a partner with a sordid past that's been well documented in the press and courts. It's a delicate balance. I enjoy their company, but I don't get too cozy. Good luck!