While Fedora and his men dug up the Cross of Coronado, in Utah, 1912, Panama Hat stayed in the car. When Indiana Jones stole the artifact from the gang and fled from the canyon across the desert, Panama Hat's car gave chase until Indy reached a circus train. After Indy managed to escape to his house, Panama Hat showed up with Fedora and the Sheriff. Roscoe brought the Cross out to him, he handed over the payment to the gang.
In 1938, Indiana Jones tracked down Panama Hat to Lisbon, Portugal, after receiving a tip from a man who worked for Panama claiming that his boss had an affair with his wife and wanted revenge. Jones snuck aboard the Vasquez de Coronado off the Portuguese coast and took the Cross of Coronado into his possession.
Jones quickly realized it was a set up and was taken captive. Panama Hat explained how he had been hit bad financially during The Depression and was seeking wealthy buyers for the Cross when one turned up — Indy would later suspect it was Walter Donovan — with a provision that required Jones be dead.
After recovering the Cross, he ordered Jones be thrown overboard. However, Jones broke free of his captors, seized the Cross and the action combined with rough seas caused an explosion which destroyed the Coronado. Panama Hat was killed in the explosion, and his shredded hat landed in the water not far from where Indiana Jones was swimming.
A younger Panama Hat chases after Indy in 1912.
Panama Hat in 1938.
"Small world, Dr. Jones!" (Indiana: "Two small for two of us!")
(Indiana: "That belongs in a museum!") "So do you!"
In some ways, Panama Hat represents the False Grail at the film's climax while Garth represents the Holy Grail. While a panama hat is seen as a luxurious and elegant hat, a fedora is seen as a dusty and crusty hat. This references the fact that while Panama Hat claimed to be Cross of Coronado's owner, he was actually a deceptive liar, whereas Garth proved his worth by revealing himself to not be as greedy and materialistic than his co-workers.
In the novelization, Indiana Jones comes to suspect that Walter Donovan may have hired Panama Hat to kill him, as Panama Hat's secret buyer of the Cross of Coronado requested him to have Jones killed. While the possibility may be accurate considering Donovan's love for antiquities, it's unknown whether Panama Hat was contacted by Donovan or not as without Indy, Donovan would have possibly never found the Grail Diary to search the Holy Grail.