On 2005, Daniel planned to murder Sheryl. When going down the elevator, he strangled his wife, while Teresa Telenko came down and acted as a doppleganger of his wife. He then hid Sheryl in the access panel, and then Teresa/"Sheryl" and he stepped out of the elevator. He then "forgot" the passes and had "Sheryl" retrieve the passes from their penthouse, with her scarf then getting caught and then going up, seemingly strangling her. "Sheryl" then brought the real Sheryl down and used her limp hand to press the access button, and then faked screaming. Daniel attempted to keep the details hidden, but a journalist managed to leak the details early in a tabloid, causing Daniel to arrange for the journalist to be fired, due to his "owning the city."
A few days later, San Francisco Police Department Captain Leland Stottlemeyer figured out that Daniel murdered his wife while plastered from one of his officers' bachelor party due to the earrings in the before and after photos being different, and excitedly called Adrian Monk over to come over and he'll discuss the details. However, the next morning, Stottlemeyer had awoken from a hangover and couldn't remember ever calling Monk, and to make matters worse, he can't remember where his pants were, nor his proof (having earlier thrown them out, his proof with them, due to a bet that he presumably lost). Despite the loss, Monk and Natalie nonetheless managed to deduce Daniel Thorn was most likely guilty from some of his actions.
Daniel later encountered Monk and Natalie on his elevator after he unknowingly aided them in their investigation regarding how his wife "died" and whether the official report was accurate (having planned to use the elevator, with the elevator getting caught on the elevator door), and told them off for "mocking" the circumstances of his wife's death. Monk then pointed out (albeit in a broken voice due to the strain of his near-death) that, due to his not even being able to breathe, much less cry for help, it was extremely unlikely that Sheryl actually screamed for help. Daniel, smug that he's still ahead of the game, then informed Monk that he has power over the city, citing his firing of a tabloid journalist as evidence to this before dismissing them.
Afterwards, he observed Monk's skills at the card game, and decided to watch, even making an exception to the $500 limit on the condition that they double the deck. However, he unintentionally admitted how he murdered Sheryl when commenting that he had "friends in the ceiling" that were watching the casino (referring to the recording spheres, but Monk deduced Teresa's role in killing her). He then, while making bets at the same time, recited how Daniel murdered her, but Daniel smugly informed him that he can't prove it, nor will he get a search warrant before escorting Monk and the others out of the casino. However, Daniel managed to get cornered and arrested after Stottlemeyer's tabloid gathered enough proof to the Las Vegas Police Department to supply a search warrant, and found rope fibers and traces of human hair on the access panel of the elevator, with Daniel being arrested. However, he still remained smug, citing that he'll be "out by tomorrow morning," although Monk assures him to "not bet on that."