A local news report is shown profiling a Santa Barbara man, Thane, who was just released from prison after his lawyer from The Innocence Project discovered he was wrongfully convicted of robbing a restaurant he worked at. Thane is very outspoken about this injustice and as a result, is very weary of police and the legal system as a whole. Instead of going to the SBPD, Thane asks Shawn and Gus to help get his restitution settlement. In order to obtain it, the real culprit of the crime that Thane was wrongfully committed of, needs to be found, tried and convicted, or Thane gets no restitution money. Shawn and Gus agree to help, as Thane convinces them that this case should be part of their civic duty to humanity. Shawn and Gus are instantly spellbound by Thane's emphatic "justice shall be served" attitude, and agree to help.
Back at the SBPD, Shawn relays this exciting news to Juliet, but she isn't thrilled, as Juliet was the arresting officer that helped put Thane in prison. Juliet is mortified that she played a hand in putting an innocent man in jail, so she reopens the case file and takes it upon herself to investigate.
The original testimony that landed Thane in prison was from an eyewitness, the restaurant owner, Mercer, whose restaurant Thane was accused of robbing.
Shawn goes to question Mercer who claims that he was getting pressure from the D.A. to name Thane as the robber, and since all evidence pointed to Thane, it made sense to comply.
As Mercer describes the details of the robbery, Shawn is immediately reminded of another robbery that took place at a convenience store recently: both robbers tied their victims with zip-ties and made them recite the alphabet backwards.
They head to the convenience store and question the clerk. Shawn SV's a claim adjustment ticket on the counter. Shawn asks about it, and the clerk tells Shawn that the store is insured but the store alarm wasn't activated in the zone where the burglar escaped. Shawn then Shawnvisions something on the wall that tells him the convenience store had some renovations done a few days before the break in. The clerk confirms that is true.
Just then, Shawn gets a call from Henry about a jewelry store robbery where the culprit again used the same "zip-tie/reciting the alphabet backwards" M.O. This confirms that the person who committed the restaurant robbery is the same person who committed the convenience store and jewelry store robberies.
Shawn and Gus show up at the jewelry store and Shawn immediately notices that the jewelry store, too, had some recent renovations, and that the alarm didn't trip when the culprit fled. Someone tampered with the alarm when they were doing construction on both places.
Juliet wants to help Thane directly, but he doesn't trust her based solely on the fact that she is a cop. But that doesn't stop Juliet from trying to right this wrong. So Thane continues to work with Shawn and Gus. This creates tension between Shawn and Juliet, but Shawn keeps his eyes on the prize when Thane tells the guys that once he gets his restitution money, Psych will get $10,000 as reward.
Shawn realizes that the jewelry store and the convenience store used Derrick Poole, of Poole Construction, to put up drywall in their stores and likely tampered with the alarms while working. They head to Poole's construction company, but Juliet is already there arresting Poole. Shawn asks to question him first before the SBPD, but Juliet tells him no. They agreed to work this investigation separately and she is going to question him first.
While Juliet questions Poole, Shawn learns from McNab that Poole hires Day Laborers to get most of their jobs done. Shawn then gets the idea to question the Day Laborers that Poole hired for both jobs. The Day Laborers give them a clue that leads them to their co-worker Carl's house, however Carl's dad Fred tells them Carl isn't there. They believe Carl is the culprit, but he is nowhere to be found.
Juliet, who has been investigating on her own, is having DNA of a blood droplet she found at the jewelry store crime scene analyzed. Lassiter tells them that once they run the DNA analysis, they will have the real culprit. Juliet is happy she is a step ahead of Shawn, and since they agreed earlier on that they were working separately, she denies Shawn's plea to get in on her findings.
Shawn and Gus then go to question Mercer again but are shocked to discover he has been killed and that Thane is the #1 suspect.
Thane is arrested, but is released after Juliet says she found an eyewitness who spotted someone else running out of the restaurant at the time of the murder. Thane is absolved of the crime, and he thanks Juliet for helping him and apologizes for not trusting her in the first place. He admits he should have hired her over Shawn and Gus.
Juliet alerts the team that the real robber will soon try to fence the diamonds he stole from the jewelry store. Shawn and Gus put it together that the diamonds he stole were conflict-free and therefore carry a laser-etched I.D. that would lead them to finding the person who stole them. Juliet admits that is an excellent lead and decides to follow up on it.
The diamonds lead Juliet and Lassiter to an apartment where they discover Carl hiding out. She arrests Carl, but her car gets hit by another car on the way back to the SBPD, and Carl escapes with the driver that hit them.
Back at the SBPD, Juliet is devastated that Carl got away. They can't get Thane his restitution money until they find and convict Carl.
The DNA analysis comes back from the blood found at the jewelry store, and sure enough, it belongs to Carl, however the DNA also matches evidence on file from an unsolved murder that took place in 1981. Carl was only 8 years old in 1981 and couldn't have committed the murder, so the SBPD figure this is a familial match. Shawn then realizes that Carl's dad Fred has been covering up Carl's robberies to keep Carl's DNA out of the national database so that Fred would never be found out for the murder he committed in '81.
The SBPD track down Fred and learn he planted the gun in Thane's car and paid Mercer to lie about Thane being the culprit. Carl is devastated to hear his father is a murderer and decides to turn himself in for the robberies. Carl and Fred are arrested, Thane is finally given his restitution, and Shawn and Gus are awarded their hard-earned $10,000. Thane uses the bulk of his restitution money to open a new restaurant.