For those coming to the party a little late, here's what you need to know: Neal Caffrey (Matt Borner) is a prolific and successful thief and con man caught by the FBI after a long cat-and-mouse chase.
He breaks out of prison to reunite with his girlfriend Kate, but is apprehended by a team that includes FBI Agent Peter Burke (Tim DeKay.) Caffrey has information that could put another white-collar criminal behind bars, but provides it only after striking a deal with Burke: he helps him catch thieves along with his partner and friend Mozzie (Willie Garson) and a few other "colleagues", he stays out of prison on a work release. He wins Burke's trust, but Burke and in particular Agent Clinton Jones (Sharif Atkins) keep close tabs on him.
At the end of the second season, Burke suspected Caffrey's involvement in a warehouse fire where a recovered German U-boat was being stored, along with a fortune in Nazi-owned art. The art's missing. Burke isn't convinced Caffrey is back up to his old tricks. The flashback shows that Neal received an anonymous business card at home with contact information, a key and the phrase “You’ll Thank Me.” Before the warehouse explodes in flames, we see Neal standing and beaming amidst the art and the recovered U-boat. A piece of scorched canvas falls at Burke’s feet as he arrives on the scene, the warehouse still ablaze.
One "Previously On . . ."-style montage later, we're at the starting line for Season Three . . .)
Neal and Mozzie are hurriedly boarding a small twin-engine cargo plane and hustling to taxi down the runway. The plane is loaded down with crates, presumably filled with a lot of very valuable, very stolen artwork. Meanwhile, Burke is barrelling toward the plane in a dark SUV, determined to make sure Neal and Mozzie never get off the ground . . .
"FOUR DAYS EARLIER" . . .
Neal is tethered to a polygraph machine, with Peter and Jones keeping him company. They ask him question after question, including whether he’s a convicted con man, to which he answers, “Yes.” They ask him to outright lie about something to complete a baseline reading, and Neal smartly but calmly proclaims, “I’ve never told a lie.” Jones tells him that’ll do it.
Neal tells Peter what he knows: he had previously met with his foe (and murderer of his girlfriend, Kate) Vincent Adler shortly before his death, the warehouse went up in flames with the art gone and Neal has no idea who did it. Peter stares daggers at a smug Neal, as Jones announces that the polygraph says he’s telling the truth.
Mozzie awaits Neal at Neal’s apartment. It turns out that Neal really didn’t have any idea what was going on. It was in fact Mozzie who delivered the key to Neal with the message, and Adler who loaded the art onto the truck and got away with it. Warehouse went up in flames as a cover, Neal has plausible deniability and now they have a getaway to plan. The two then drink a toast to their “best and final score.”
Neal and Peter, a short while later, have a street-corner stare-down. Neal doesn’t like that, after so many successful collars, Peter still doesn’t trust him. Peter blows him off, telling him that their working relationship isn’t that big a deal to him.
Later in Peter’s office, Peter wants to know why David Lawrence, a known fugitive who was suspected years earlier to have robbed the Federal Reserve of $60 million that’s still unaccounted-for, has been searching high and low for a man going by a known inactive alias of Neal’s. Neal reveals that they may have partnered on a few jobs previously, and Peter tells Neal that he’s to go undercover as his old alias to lure Lawrence into the FBI’s hands.
Later, Peter’s home and fuming over the charred piece of canvas that he’s dead certain is no 1930s masterpiece, but a portrait of the Chrysler Building he swears he recognizes from Neal’s apartment. His wife Elizabeth (Tiffani Thiessen) tells him in no uncertain terms that she’s sure he’s jumping to conclusions. Peter tells her he can’t have the canvas tested via a federal crime lab, because doing so would risk falsely implicated him in the heist. Elizabeth offers to call in a favor at her former gallery to have the paint on the canvas aged, to determine if it came from a 1930s work or one painted much more recently.
Meanwhile, Neal has re-assumed his old alias and met Lawrence, per contacts made by the FBI via his alias’ old e-mail address, at the Gramercy Fencing Club. A little banter and smack-talk among thieves here, one sliced tie on Neal there, and the two are engaging in a little aggressive impromptu fencing and discussing how Neal can use his connections to get Lawrence and his $60 million out of the country in exchange for a 10-percent cut of Lawrence’s booty.
Talking with Mozzie later, Mozzie lets Neal in on the magician’s trick: those weren’t in fact masterpieces destroyed in the explosion, so when Neal told Peter in the previous season that he’d never destroy art, he wasn’t playing him. Instead, those were in fact Neal’s paintings that Mozzie planted and destroyed. Neal also tells Mozzie that he knows that Peter knows something. That’s why Neal goes to see Elizabeth.
When he arrives at Peter’s home, he and Elizabeth adjourn to their kitchen for coffee, where Elizabeth takes a moment and discreetly hides away a coffee-table book containing a Chrysler Building portrait similar to both the one stashed inside the U-boat and the one Peter recognizes from Neal’s apartment collection. Neal intimates to Elizabeth that he suspects Peter isn’t exactly holding him in high regard lately, and Elizabeth gently points out that it’s not as if Neal’s done much that earns his trust. Still, she understands his penchant for doing “the wrong things for the right reasons” but suggests maybe he strike a better balance between the two. Neal diverts her with a request for a little milk in his coffee just long enough to camera-phone a scan of the art book she tucked away, politely finishes his coffee and off he goes again.
Later, he and Mozzie confer over a copy of the book that Neal has obtained. Neal is momentarily panic-stricken as he finds a portrait of the Chrysler Building and it comes together: that scrap was his Chrysler that Mozzie planted, Peter has put two and two together and is one lab-check away from watching it add up to four before his very eyes.
Meanwhile, Neal still has a cover to keep. He and Lawrence meet at a harbor where Neal explains to his former colleague how he’s arranged via an inside man to arrange not only for Lawrence to board a boat with his money, but for the paper trail to lead any suits straight to France – about 4,000 miles from Lawrence, roughly. Meanwhile, Peter’s team is already keeping watch over the whole situation.
Mozzie later calls Neal away from conferring with Peter about the sting operation to tell him that his recon confirms that Elizabeth is indeed calling in a favor and looking into the scrap’s age. Mozzie and Neal start talking about plans to swap the burned sample with one bearing paint from the 1930s paintings to throw Elizabeth and Peter off their trail, as they make their escape immediately following the Lawrence sting. As a clearly tense Neal exits FBI headquarters, Peter looks on knowing that something is just a bit off.
While Mozzie scrapes color samples from various works, it occurs to Neal that Jones is tailing him. The two realize this is going to cause problems. They suggest a “Phoebe Cates” to throw attention off while Neal makes the sample swap.
A “Phoebe Cates,” it turns out, is a fun little play. First, Neal ditches Jones in a crowd of look-alikes wearing his same black fedora, black suit and black umbrella. Mozzie infiltrates the gallery dressed as a delivery man and with the help of an undressing woman holding the portly guard’s rapt attention – if you still don’t understand why it’s called a “Phoebe Cates,” go watch “Fast Times at Ridgemont High” and come back here – Neal slips downstairs, re-paints and singes the sample containing the 1930s paints and slips away unnoticed.
Peter later calls Neal at home and compliments him on losing Jones. Neal tells him he thought it might’ve been a suspicious Lawrence. Nevertheless, Peter informs him that Jones will be outside his building in 20 minutes to rendezvous for the sting that will nab Lawrence. As they’re readying to bolt, Mozzie advises Neal against saying goodbye to his old friend June. After Mozzie leaves, Neal takes one last look around and leaves his FBI ID on the table of his apartment, with just the slightest hint of sentimentality.
Lawrence and Neal meet at the Gramercy again, where Lawrence reveals that he originally hid the money within the club but when he returned to reclaim it, the place was crawling with authorities ready to make his acquaintance. He shows Neal with a reconnecting of a few circuits that he hid the money by stashing the bills inside a couple air-ducts, but redirecting air-flow to the club’s other ducts and keeping the others dormant. As the charge reconnects, $60 million comes showering down upon Neal and Lawrence. Lawrence says it’s even better than he dreamed.
One cut later, and the bills are counted and ready for departure, but Lawrence spots Jones snooping on an opposite rooftop and has him apprehended. Before Lawrence can have him killed, Neal suggests hanging onto him for “leverage” to get them onto a plane with the money. He tells Mozzie to meet him at the airstrip – with Lawrence.
Mozzie phones Peter and tells him exactly where to find Neal and Lawrence. We’re returned to where we came in, with Peter’s SUV chasing down the plane and successfully apprehending Lawrence. Jones thanks Neal for getting his back, and Peter appears to congratulate Neal on a sting well-done. Elizabeth also reveals that the painting is, in fact, dated to the 1930s. It seems Neal is in the clear.
Later, Peter waltzes into Neal’s apartment and admires the “new” Chrysler. Neal walks in on him, and offers him the painting, which Peter declines. Peter calls a truce and admits he rushed to judgment, which Neal accepts. He gets a text message, then casually dismisses himself.
Back at Peter’s office, he’s informed that there are two paintings unaccounted for from the U-boat’s shipping manifest. Peter says he’ll sit on the information and wait patiently. He now has reason to believe again that Neal can’t change his stripes. Meanwhile, Neal and Mozzie agree they’ll have to sell one of the paintings to make good a Plan-B escape.