On 17 December, the second day of the offensive, 1st Panzer Division broke through the Allied lines between the Belgian towns of Malmédy and Saint Vith. At the village of Baugnez, Peiper's unit encountered a small group of trucks and jeeps belonging to Battery B of the U.S. 285th Field Artillery Observation Battalion. In the ensuing fight, some 20 U.S. soldiers were killed and Peiper's force took 125 prisoners. Peiper left behind some men to guard the prisoners before moving on to his next objective. A few hours later, another 1st SS column arrived at Baugnez, adding some additional prisoners.
The Germans herded the Americans into a snowy field, where they were held under guard. Meanwhile, another group of separated Americans who had previously escaped from the Germans moved toward the crossroads, and a firefight broke out in which more Americans were killed. This engagement led the guards in the field to fire on their prisoners, perhaps believing they would try to escape. The Germans then moved among the wounded, executing them with bullets to their heads. Most of those shot were unarmed. At least 72 men were killed, although some 30 others feigned death and later escaped to American lines.
The incident was the worst atrocity against Americans in the European Theater during the war. News of the event, which became known as the Malmédy Massacre, quickly circulated among Allied troops, and the U.S. Army made the most of it for propaganda purposes, even including civilians who had died in the fighting in the total of persons killed, although many were actually victims of U.S. bombing.
In May 1946, Peiper and 73 members of the 1st Panzer Division, a number of them selected randomly, were brought to trial by a U.S. military court for the Malmédy killings and the murder of soldiers and civilians elsewhere during the offensive. Army prosecutors presented testimony from massacre survivors and civilian witnesses, captured German documents indicating that German troops had been urged to be "ruthless" with prisoners during the offensive, and confessions from some of the accused. In response, the defense argued that pretrial investigations had not been thorough and that confessions had been extorted by mock trials and threats of summary execution. The court dismissed these complaints and convicted all of the defendants. Peiper and 42 others were sentenced to death, and the rest were given lengthy prison sentences.
Questions about the trial results were raised almost immediately, and review boards cited errors in the court's procedural rulings. Several defendants indeed claimed that their confessions had been extracted by physical force, charges that the original prosecutors angrily denied. The army reduced the death sentences to long prison terms, but ultimately, all the defendants, including Peiper, were released from prison within a few years.
Bauserman, John M. The Malmédy Massacre. Shippensburg, PA: White Mane Press, 1995.; MacDonald, Charles B. A Time for Trumpets: The Untold Story of the Battle of the Bulge. New York: William Morrow, 1985.; Weingartner, James J. Crossroads of Death: The Story of the Malmédy Massacre and Trial. Berkeley: University of California Press, 1979.