Russell finds out that the spirit/ghost that has been haunting his place is a boy called Joseph Carmichel. He was a crippled boy who could not walk. His father killed him by drowning him while he was trying to take a bath. He then got a orphan to take his place by sending him to Europe to get 'cured', then bring him back so that both of them could live on some sort of insurance policy or something. Russell tells this to Sen. Carmichel, the changeling: the orphan who took Joseph's place. After Russell leaves, Carmichel puts Joseph's medal (which Russell dug up along with Joseph bones in a well under a house) on his 'father's' picture, which eventually starts to shake. Back at Russell's place, Claire (Van Devere) goes inside, but eventually the house starts on fire. Russell then comes home and rescues her just as Sen. Carmichel (who is having a out-of-body or some dream-like experience) goes inside the house and up the stairs. In Joseph's room, Sen. Carmichel sees a vision of Joseph's father killing Joseph. Sen. Carmichel then suffers a heart attack which kills him at his home. Russell's place burns to the ground as Russell and Claire survive.
Continuity mistake: When John is in his Manhattan apartment reminiscing, we see his daughter throw a ball at him. If you take a close look at the ball, you will see how beat up it is. However, when the ball is falling down the stairs in his rented house for the first time, it has become new and shiny.
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