When E.L. arrives at the office, he discovers that Lionel is redecorating in an attempt to make the place presentable for his parents William and Hillary, who are paying him a visit. Lionel warns that William is the vice president of an insurance company and accustomed to penthouse suites. E.L. offers to provide a furnished penthouse apartment and a better car, and Lionel is understandably suspicious. His partner accuses him of not trusting him, suckering him into going along with E.L.'s plan.
E.L. goes to the Federal building to meet with a businessman, Brandowyn, who owns a city complex. A fellow con artist, Duff McCoy, is posing as a FBI agent. He and E.L. stage a "fake" meeting with E.L. posing as an organized crime investigator, and they convince Brandowyn that he may be involved with something crooked. He hastily offers them his penthouse offices so that they can run surveillance on the mobsters they claim he's involved with.
Lionel picks up his parents at the airport and William complains that Lionel appears to have too much spare time on his hands when he's supposedly running a detective agency. As they drive back from the airport, Harriet tells her son that his former fiancée, Bunny, wrote to her and wants to get together with Lionel again. Lionel thinks it's a bad idea but Harriet says she'll arrange a dinner party for them that night. Distracted, he manages to run E.L.'s new car into a stop sign.
After dropping his parents at the hotel to get settled in, Lionel meets with E.L., who shows him the new penthouse office suite he "procured" for them. Inside they find a woman, Camilla Caras, searching the sofa. She tells them that she worked for the previous tenant, Ernst Gundergast, and shat she lost a gold pen somewhere in the office. Lionel offers to help but she quickly leaves without giving a forwarding address or number, saying she'll contact them later. Even Lionel realizes that something suspicious is going on.
Later, Lionel brings his parents to the penthouse office. They're marginally impressed, although William wonders why it doesn't match Lionel's description over the phone, and Harriet is busy setting up the dinner party. As Lionel shows his parents around he hears noises in the office. He goes in in and finds two men tearing up the place and searching the walls After a brief struggle, the intruders run out past E.L., who is posing as an African Ambassador to pay Lionel $20,000 (in play money) and give a commendation on behalf of his grateful nation. When Harriet starts to faint, Lionel tells his partner to stop trying to help impress the Whitneys and help solve the case instead, so E.L. slips out, still in disguise.
The two intruders, Schmidt and Gabor, report to their employer, Van Cott. He tells them to bring Lionel to him.
As Lionel escorts his parents out of the building, E.L. arrives and greets the Whitneys, and gives roses to Harriet. As he goes inside, Lionel realizes that the police are targeting the car that E.L. loaned him. He identifies himself and they arrest him for driving a stolen car. When they search him, they find the play money, convincing them further that Lionel is up to no good.
At the station, E.L. poses as the lawyer of the rich man who the car belongs to, and convinces the police to release Lionel by persuading them that he's the owner's son and mentally deranged. He also convinces the captain to let him pick up the car. Outside, Lionel wants to know what E.L. is up to this time and where he got the stolen car. E.L. focuses on the case and explains that Ernst was a diamond merchant and thieves shot him in the office. He figures they were after Ernst's diamonds, but Lionel isn't interested and goes to
Lionel is escorting his parents out of the building when E.L. arrives with roses for Harriet and introduces himself, and then goes in to meet with Brandowyn. Harriet is impressed, while Lionel notices that the police are ticketing his borrowed car. Once he says that he's driving the car and they find the play money, they arrest him for grand theft auto and take him away. E.L. poses as a lawyer to bail him out, claiming that Lionel is the owner's son and mentally disturbed, and soon gets him out. Disgusted, the officer in charge is eager to get rid of Lionel. E.L. asks to pick up the car and convinces the captain to turn it over. Outside, Lionel is understandably angry that he's driving his parents around in a stolen car, and wondering why the police are asking if he wants ice cream. E.L. has done some checking and confirmed that Ernst was a diamond merchant who was shot to death, and he figures the diamonds are hidden in the office. Lionel isn't interested, and goes to get his parents for dinner with Bunny.
That night, E.L searches the office and Camilla comes in and holds him at gunpoint. However, when she realizes that E.L. isn't working for Van Cott, she explains that the bad guy is looking for a single $3.5 million diamond. They hear Van Cott's men at the door and E.L. sets off the alarm, and then he and Camilla escape.
The Whitneys enjoy fine dining and Bunny keeps gushing over Lionel, much to his discomfort. He's even more uncomfortable with the fact that they are still enchanted with her, and want her to call them Mom and Dad. When Lionel points out that her father was furious with him for dumping her at the altar, and that he still plans to be a detective, they start to argue. E.L. and Camilla arrive to warn Lionel that he's in danger. Bunny drags Lionel out onto the dance floor. As E.L. and Camilla approach them, Gabor and Schmidt cut in. After a brief fight, the men capture the two detectives and Camilla and take the trio away.
At Van Cott's office, the villain demands the diamond. E.L. quickly lies and says that they don't have it, but they know where it is at the penthouse office. Van Cott wants to keep Lionel and Camilla there as hostages, but E.L. convinces him to take them along. Gabor and Schmidt accompany them to the penthouse while Van Cott waits at his office.
At the penthouse office, E.L. does a fake search of the place and then claims that one of the crystal fixtures on the sink conceals the diamond. Gabor and Schmidt don't believe it, but E.L. secretly borrows Camilla's diamond ring and uses it to fake a glass-cutting test on a mirror. He then gives them the fixture and palms the ring, and the henchmen prepare to kill them. Lionel grabs a light switch and claims that it's the alarm, and threatens to summon the police. Schmidt and Gabor cut their losses and leave with the "diamond."
E.L. and Camilla start searching for the real diamond and Lionel objects when they start cutting up the cushions. As he tries to stop them and E.L. cuts open the cushion that his partner is holding, William and Harriet arrive and demand an explanation. Lionel interrupts another of E.L.'s fabrications and tells them the truth. Camilla and E.L. try to work out where Ernst could have hidden the diamond in the few seconds he had before Gabor and Schmidt entered the office and shot him. A search of the chandelier proves unsuccessful, and Lionel gets his mother a glass of water with ice. However, he realizes that one of the pieces of ice is the diamond. Camilla then draws her gun, takes the diamond, and leaves. Lionel wants to call the police, but E.L. asks him not to because then he'd have to reveal that he posed as an FBI agent to get the penthouse apartment.
The partners take William and Harriet to their office for safety, and William is less than impressed. E.L. takes the blame for everything, but Lionel admits that they're not doing very well. William asks Lionel to come home with them, but his son refuses, insisting that he is enjoying himself.
When Van Cott sees the diamond, he quickly realizes that his henchmen were fooled and sends to find the detectives and kill them.
Lionel and E.L. takes the Whitneys to the borrowed car. Van Cott and his men pull up and a fight breaks out, while a nearby woman calls the police. Lionel takes down Van Cott, E.L. disposes of Schmidt, and Harriet knocks out Gabor with her purse as he runs by.
The police arrive to arrest the thieves, and William is shocked to learn that even with the danger, Lionel is still enjoying himself. Harriet appreciates what Lionel has been through, having gotten a taste of the action herself. Lionel figures that they will get the insurance reward to help with their business, although they'll have to spend much of it to repair the damage to the penthouse office. However, the police notice the car and once again arrest Lionel for driving a stolen car.