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Although we hardly meet Mr. Schmitt's cousin at all in the course of the story, it turns out he's a rather sinister character who's been lurking in the background all along. We first meet him as a stockboy at Mr. Schmitt's neighborhood store—and he can't even ring up the colored pens the kids are trying to buy. Sheesh.
After months of murder-related fear and paranoia amongst both children and parents and a whole lot of silence from Mr. Schmitt's cousin, he shows up to grab April while she's trying to get to Egypt one night. Tah-dah! The real murderer revealed. And once the police get involved, it's all over:
The redheaded man had admitted everything. There wasn't going to be a real trial because the man was very sick mentally and was to be sent to a hospital for the criminally insane. (21.48)
It's a good thing that Marshall was able to ID him: after he's in custody and admits to his crimes, the police will put him away and get him the treatment he needs. And the whole neighborhood heaves a collective sigh of relief.