Back at the Psych office, Gus has been doing some investigating of his own. By all accounts, Doreen had too much to live for. She wouldn't have committed suicide. Plus, from a picture of the crime scene, it appears the latch on the window Doreen went through was broken - suggesting she fell backward out the window by accident. Shawn then realizes that the word "acnaib" the supposed ghost was yelling is "Bianca" backward. Bianca is in danger. He calls Juliet and they all rush over to the sorority house but it is too late. Bianca has been murdered.
At the police station, Vick grills Betty who admits Doreen's accident was a haze. Doreen was supposed to spend all night at the haunted asylum and they pretended they were Scary Sherry to scare her. As Doreen accidentally fell through window, Bianca tried to grab her arm to catch her but was too late.
At the Psych office, Gus tells Shawn that Alice Bundy, now the top suspect for the murder of Bianca, has an airtight alibi. She lives with Doreen's family and was upstairs in her room all night. Shawn doesn't believe there is such a thing as an airtight alibi. He knows Alice did it. He just has to figure out how.
Shawn and Gus go to the Harthans to investigate. Gus distracts the housekeeper, who tells him that Doreen's parents are at the cemetery, while Shawn sneaks in the back. While there, Shawn gets a call from another sorority sister who tells him that Juliet went to a candlelight vigil at the asylum hosted by Doreen's parents. He also discovers exactly how Alice was able to get out of the house the night Bianca was killed without being seen. When Gus rejoins him, he tells Shawn that Doreen's parents aren't at a candlelight vigil. Shawn realizes Juliet is being set up. They race over to the asylum, calling Lassiter for back up on the way.
At Wispy Sunny Pines, Alice attacks Juliet with an ax, but Shawn, Gus and Lassiter arrive just as Juliet gets the upper hand. Alice is taken away in handcuffs, Juliet is Juliet again and, as Goochberg's pacemaker has put her in the hospital, Lassiter's temporary reassignment is thankfully over.