The gang becomes lost trying to find the US border and is forced to follow an ambulance, which brings them to the 'Shady Sanitarium'. One of the owners, Dr. Tewksbury, explains that he was the assistant of the original owner, the late Dr. Coffin. He explains that patients have been disappearing and that the ghost of Dr. Coffin - who has returned from the dead to continue his brain wave experiments - is responsible. The ghost shows up outside Scooby's window and the gang, exploring, discovers a huge solar furnace and a room in which the roof opens. Dr. Coffin's ghost shows up again, scaring Shaggy and Scooby into his laboratory. Not long after the gang discovers a gold smuggling operation in the basement of the sanitarium. Shaggy and Scooby are taken hostage and the rest of the gang must follow them to rescue them, as well as putting a stop to the smuggling operation.