Daniel Wayne is a Federal Marshal at the US Treasury Department who travels to Santa Barbara after being informed by a colleague that someone there (they don't yet know this was Shawn) has used the department's database to look up Scott Seaver. Upon arrival at the police station, he finds out that Scott is there as well and surprises the group by telling them that they just exposed a key witness out of witness protection. He explains how Scott is a "hero" and a "great American", as it was his testimony against infamous racketeer John T. Waring in a case close to Wayne's heart that put Waring away for shooting P. Renfro, Wayne's partner on the force, during a warehouse raid.
When he informs Scott that it's still not safe for him out here and that he will be put back into witness protection under a new identity, Scott declines and tells him he will stay in Santa Barbara and try to build a life with his ex-girlfriend Juliet. This displeases Wayne greatly, and throughout the whole ordeal his frustrations with Shawn grow to such an extent that he laments to Karen that he's no longer respected within the department and that Shawn single-handedly destroyed his career. He's even entertaining the idea of bringing charges against Shawn. Fortunately for Wayne, Scott eventually changes his mind when he is shot at near the warehouse and fully believes Waring is out for vengeance.
However, hardly anything is how it seems and Shawn discovers the final piece to the puzzle when he looks out to see Wayne lead Scott to his car and spots tree sap on Wayne's hands. He realizes that it was Wayne who had shot at them as they were about to remove the bullet that killed Renfro from a sticky spruce tree before removing the bullet himself once they had fled, and that putting Scott in witness protection was simply part of Wayne's cover-up for killing Renfro. Shawn chases Wayne down and confronts him with this information, but from the look on Wayne's face Shawn deduces that Wayne's shooting of Renfro was merely accidental: during the raid on Waring's warehouse Wayne had spotted a gun through an open window and shot at its owner without realizing this was his partner. However, instead of taking responsibility for a tragic mistake Wayne then staged the scene by closing the window and repositioning Renfro's body in order to make it seem as if Waring had run into Renfro and murdered him in cold blood. Not only would this plan save Wayne himself, it would also ensure Waring would finally be hunted down and convicted to a long sentence that he already deserved anyway.
His biggest secret finally uncovered, Wayne punches Scott unconscious and pulls his gun on Shawn while revealing he was planning on killing Scott because he knew too much. Fortunately Shawn manages to slap the gun out of Wayne's hands and the ensuing brawl lasts just long enough for Scott to regain consciousness, pick up a piece of rebar and knock Wayne out cold. Wayne is arrested by Lassiter shortly afterwards.
