Bill is told by the woman that Cobb was a witness to an old woman's murder and he's trying to throw the cops off his tail by framing Bill. Bill goes to the police and tells them the whole story. The cop interrogating Bill says that the woman was found dead in her apartment. (We see Cobb killing her in flashback). The stuff Cobb made Bill take from her apartment is used as evidence against Bill, as well as the unused credit card Cobb gave to Bill. Bill is certain Cobb set him up, but the cop doesn't believe him and Bill is arrested. We see Cobb walking down the street.
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