Schauer is the Duke of the city who has never liked Levia & Celica due to their relationship with Ranzabu (From BG1). He wanted to use his authority to rule the city in his hands. He also abused his powers and forced his way into the prohibited area where the statue of Miko of Water is located. He told her his requests and what they should do with Celica, but no response was given from the statue. As story goes, he eventually met a disguised Rhea and he got charmed where they had a sexual intercourse. As a result, his lifeforce was slowly drained and Rhea was able to manipulate the authorities. Once Revia arrived into his mansion's basement, Rhea stabs him, then uses her magic and his blood to transform him into a huge frankenstein monster.
Players will play as Levia and team to stop him, but if the players choose Celica, he will join the battle as well though it has little to no relevance to the plot changes.