The scene opens with Mozzie still pissed at Neal for lying to him. Neal attempts to explain his lie by saying he feels a tie to his life in New York. Neal is upset with Mozzie for selling the Degas painting. Mozzie says the fence was Rusty. Neal asks him to look into getting the painting back. Mozzie asks Neal if he wants to stay. Neal replies "I'll let you know." Neal is introduced to the head of the FBI's D.C. Art Crimes bureau, a man named Agent Kramer who also happens to be Peter's former mentor. In a meeting, Kramer tells them they've gotten word a Degas (the one Mozzie sold) has entered the black market. Kramer explains the German connection.
Peter seems to pay close attention to Neal as he provides background for the piece. Peter promises they will find the painting. Neal tells Mozzie about the FBI knowing the Degas is in play. They both seem intimidated by Kramer (who has a vast knowledge of the Impressionists). Mozzie has placed a 48-hour sand timer on Neal's desk. For two days he'll do whatever Neal thinks will help, then he and the treasure will disappear. "Choose a side, Neal," Mozzie says. Peter and Elizabeth have drinks with Kramer. Neal's name comes up. Kramer says he's noticed Peter clearly thinks Neal took the painting. Peter wanted Kramer for an outside perspective. Kramer warns him criminals generally always fall. He should prepare him for the reality of slapping cuffs on a friend. Peter and Kramer interview Neal, asking him what he would do if he had the painting. During the interview, Neal gets a text. Mozzie is meeting with Rusty in 30 minutes. Neal says he would never fence a painting like that himself.
Kramer has two suspects in mind: Gus Thoreau and Rusty. Neal says if it was him he'd use Rusty. Kramer's team is handling Gus. Peter will be tailing Rusty. Peter says they've been following Rusty for 24 hours. Outside Neal and Peter discuss the need for Kramer to have been brought in. Mozzie meets with Rusty. He needs to get back the last piece he sold. Mozzie spots agents and bolts, sticking his hand in Rusty's pocket before giving him the slip. During the chase, Neal is able to meet up with Mozzie, who stole Rusty's phone and deleted any references to them. Neal makes sure to help Peter grab Rusty, who lawyers-up immediately. Peter hands them Rusty's phone. In the elevator Neal runs into Agent Matthews, Cramer's assistant who thinks Neal is an agent with Interpol. She is on her way to see Peter and says they should go in together. Neal asks if he can trust her, then says there is a mole in the White Collar division making a play for the sub art.
He's been working undercover as a recovery agent named Neal. When they run into Peter, she maintains his cover. Peter and Kramer know Rusty deleted numbers from his phone before Neal "found it." They don't know how he got the painting. However, they think he sold it to arms trafficker Elliot Richmond. If they recover the piece they'll have leverage to make Rusty talk. Richmond, like many in his profession, has been using art instead of cash as payment. They believe Richmond is keeping the painting in his penthouse. A meeting is set up to move some rare military-issue automatic weapons in exchange for the painting. Diana and Peter show Richmond the gun. Neal sits in the van with Kramer. Richmond says he has a newly acquired item worth of the guns. Just before a meeting time for the next afternoon, the audio goes out. Cramer notes to Neal "maybe he doesn't consider you as much of a partner as you think."
At the office, Neal asks Peter about the audio cutting out. They have a borderline contentious discussion about Neal being involved. Neal steals a piece of paper from Matthews and learns the time and location of the meeting with Richmond. Neal calls Mozzie with the latest information and says they need to meet that night. Mozzie hangs up and finds Keller behind him. .Keller said this is his last chance to help him get the treasure. Mozzie says he doesn't know what he's talking about. Keller hints at a surprise. Peter is staring obsessively at Neal's tracking data. Mozzie tells Neal about Keller's reappearance. Mozzie wants to bail now. Neal is almost finished making a forgery. He says they'll have a ten-minute window during the FBI raid to swap the paintings. Peter and Neal put their plans together. Peter's involved watching Neal at all costs.
Neal tells Mozzie he's going to have Peter lock him near the guard's station and then sneak up to make the switch. The next part of their plan involves Mozzie showing Richmond an example of several hundred bazookas he'd like to move. He lets him keep the first one as a "floor model." Mozzie leaves this meeting and goes to a closet, plugging himself into the buildings elevators. Peter places Neal in the office as expected, instructing the desk staff not to let him out under any circumstances. Mozzie traps Peter and Diana in the elevator. They call down to the desk, allowing Neal time to escape. Neal gets to an elevator. He heads up to Richmond's penthouse. Neal finds the Degas hidden behind another painting just as Peter and Diana's elevator starts moving. Neal makes the switch and has just enough time to reach the balcony. Peter and Diana arrive for the meeting.
Peter and Diana make the arrest. Mozzie leaves. Neal parachutes off the side of the building. Neal lands on the street, hands Mozzie the real Degas. He gets back into the room by the time Peter opens the door. Kramer examines the painting and (with help from Neal) determines the painting is a forgery. Neal tells Peter he's sorry, given how much he knows he wanted this one. Neal leaves. Kramer tells Peter to look on the bright side. They took down Richmond. Kramer says he might have been wrong about Neal. Back in the office, Matthews tells him she knows who he really is. He says the reason is he was being cut out of Peter's operation and wanted back in. Telling Kramer what Neal did means she'd have to admit telling him about the manifest over drinks.
She can't do that. He knows it. Kramer tells Peter the Degas forgery was the best he's ever seen. Peter stares daggers in Neal's direction. Mozzie tells Neal the time to make a decision has arrived. Neal says he's not ready to leave certain aspects of the life he has. Mozzie seems disappointed. He leaves with "you're fooling yourself if you think this is who your really are." Peter is still at work and obsessing over something he's missed with Neal. He calls Elizabeth. He'll be home soon. Peter gets in the car and his phone rings.
It's Keller. He says Neal has the treasure. He asks Peter to help. He makes reference to having heard his conversation with Elizabeth. Peter gets home. In a daze, he learns from Jones and Diana. Elizabeth has been kidnapped. Neal walks in. Peter says to him "He took my wife." The episode ends.