The central mystery of Scooby-Doo! Camp Scare revolves around a dual-villain conspiracy. The culprits are Ranger John Knudsen and Deacon, one of the young campers. Their motive is to find the hidden treasure of deceased gangster Ricky LaRue, who told his cellmate, Babyface Boretti, where it was buried in the old mining town of Moose Creek. The town was flooded decades prior to create Big Moose Lake. The key to finding the treasure is that its location is revealed when the sun hits the town's steeple on the Summer Solstice.
The entire plot is a race against this deadline. Deacon is revealed to be the gangster Babyface Boretti in disguise, who posed as a nerdy camper to infiltrate the group and urge them to leave. Ranger Knudsen, who harbored a crush on Velma, performed the roles of all three monsters: the Woodsman, the Fishman, and the Spectre. Boretti stole an RV and sonar equipment from the rival Camp Big Moose to scan the lakebed, while Knudsen, as the Woodsman, terrorized Camp Little Moose to scare everyone away. As the Fishman, Knudsen could explore the underwater town. Their final plan involved using dynamite to destroy the dam, exposing the sunken town of Moose Creek so Boretti could retrieve the treasure at sunrise. The post-credits scene adds a final twist, revealing that while Knudsen impersonated the Spectre, a real, supernatural Spectre does indeed haunt Shadow Canyon.