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Vince Faraday is a police detective on the Palm City police force. Palm City is receiving threats from masked terrorist "Chess" and the city is being overrun by corrupt cops. The new police chief is murdered at his press conference by Chess, on Vince's watch.
At the suggestion of his partner, Marty Voyt, Vince decides to go ahead and work for private security firm ARK corporation, run by billionaire Peter Fleming, which will be taking over the police force in six months.
Following a tip from Orwell, a blogger who runs a website exposing the corrupt forces in Palm City, Vince discovers ARK's involvement in smuggling of the chemical weapon L-9, which was used to kill Chief Ross. After telling Marty of his discovery, Marty betrays him to Chess (who turns out to be Peter Fleming) and they frame Vince so that it appears he is Chess.
In a televised chase, Vince is revealed to be Chess, at the horror of his wife Dana and son Trip, who are watching the live broadcast. Vince appears to die in an explosion, but manages to survive. He's rescued by "The Carnival of Crime" led by illusionist Max Malini, only because they think he's Chess.
Once they learn he's not really Chess, Max decides to kill him, but Vince barters for his life by giving Max access to ARK security so they can steal money from local banks.
Vince discovers a dusty cape hanging in a storage room and gets the idea to pose as Trip's favorite superhero to strike back at Peter and send Tripp a message of hope. He convinces a reluctant Max to train him in the art of illusion so that he can use that to his advantage.
Vince confronts a smuggler named Scales on his first venture as The Cape, and Scales wraps him in chains and throws him in the river. Vince manages to escape.
Vince sees someone taking photos of Scales' operation from the shadows and confronts the individual only to find out it's Orwell..and Orwell is a she. She takes him back to her lair and pledges to help him in his war.
Chess kidnaps Max and has Scales interrogate him, but he frees himself from his bonds, bloody and beaten. Vince goes to rescue Max and faces off with Chess, who escapes.
Vince goes to Trip's window, under the guise of The Cape, to tell him to have hope and one day he'll see his father again.