Willem Karg was first seen inside a restaurant eating a meal when Sydney Bristow walked in posing as a prostitute (according to the CIA, Willem had a thing for prostitutes). After they talked for a while, Willem agreed to meet with Sydney in his bedroom, but was surprised to find out that Michael and Dixon were also in the room. They grabbed him and told him to calm down because they were going to cut off his finger; Sydney was posing as Anna Espinosa and was assigned to assassinate Karg. Sydney told Karg to look at her and when he did, Michael and Dixon cut his finger off. They later feigned his death and took a picture of his body to transport to the man who ordered the hit.
It was never confirmed what happened to Karg after his finger was chopped off, but Willem is most likely still living his life as a civilian or is in the Witness Protection Program.