The tracksuited man credited as Parent (Thug) works as a bookie's enforcer. Shawn and Gus see him walk out of Derek Bagg's office as they are about to talk to him, and when Shawn asks Derek who it was he just saw Derek claims it was only a disgruntled parent.
When Derek later shows up dead after having been beaten to a pulp, his injuries including fractures to his skull, ribs, kneecaps, nose and jaw, Zach Eikleberry is arrested. Knowing this to be wrong, Shawn starts thinking harder about the case and suddenly figures it out. The golf tees from Charro Casino that were in Derek's office and his delight at being so close to Las Vegas are proof enough of his penchant for gambling, and it's clear he lied about having an old lacrosse hand injury when only moments before he had demonstrated his hands were in perfect working order by executing a set of lats. Shawn now knows that Derek had actually had his fingers broken in the meantime by the man he saw leaving his office, and that the same man came back two days later to finish the job when Derek still hadn't learned his lesson.
Shawn and Gus rush to the station, where they find out that they've once again been beaten to the punch by Brannigan, who to Shawn's dismay and wonderment had somehow figured the case out for herself and is just then bringing in Derek's murderer.