Adam Whiteley goes in alone to deal with the House of Lords. He goes with the irrefutable proof obtained from Albert in hand. However, he finds Milverton, the king of blackmailers. Even as Whiteley negotiates with him, Milverton's devilish clutches close in on his dear brother.
For the sake of John and Mary, Sherlock has to confront the King of Blackmailers, Charles Augutus Milverton. Meanwhile, William James Moriarty, The Crime Lord, has his own plan for Milverton.
Holmes, now Britain's famous detective thanks to the Drebber case, suffers nightmares and struggles with solving mysteries. While on a train with Watson and Lestrade, he meets the Moriarty brothers, and a passenger is killed.
While investigating William's history, Charles Augustus Milverton discovers an old court case in which William went against a nobleman named Lord Baxter.
Albert invites the brothers to come live at the Moriarty's estate, but the pair are not warmly welcomed by the other members of the household. Albert grows increasingly disturbed by his family's intolerance, and resorts to drastic measures.
Irene meets with Albert in order to negotiate her freedom for the stolen documents. Meanwhile, due to the scandalous nature of the documents, Mycroft is forced to let William continue reforming society.
Albert arranges a masquerade ball to get in touch with Irene who is now living with Sherlock in order to save herself. Meanwhile, Sherlock deduces Adler's true plan and aims to use her to uncover the identity of the Lord of Crime.