Jurriën de Jong told CNN's Martin Savidge that the teen's body is buried in a crawl space at a Marriott vacation property in Aruba, and he believes he saw her in her final moments.
De Jong says he was near Marriott's Aruba Surf Club, then under construction, on the night of May 30, 2005, when he saw a young man chase a young woman through the construction site.
At first, he thought the two were being playful, but he says a short time later the man reappeared, carrying the woman in his arms. He says her body appeared limp.
"... He pulled (the woman) by the ankles inside the crawl space, stayed inside for a minute and then came out and closed the gap," de Jong said.
Even though de Jong suspected he had witnessed something serious, he says didn't go to the police because he was involved in "illegal activities" at the time.
Keeping his own crimes quiet -- for years
When news of Holloway's disappearance came out, de Jong put the pieces together, but for three years he says he stayed quiet, afraid he'd be indicted for his own crimes. He also says he was afraid of talking to police and facing retaliation from the people he worked for in his illegal activities, which he declined to specify.
De Jong says he had a change of heart after seeing a 2008 Dutch broadcast of an undercover interview with Joran van der Sloot, who was brought in for questioning in Holloway's disappearance but never charged. In that interview, van der Sloot said that Holloway died while the two were together and her body was dumped in the ocean.
De Jong says he got angry because he knew it was a lie and says he felt bad because he has a daughter close to Holloway's age. Van der Sloot later said he was lying in that interview.
De Jong then called Holloway's father, Dave Holloway, who has never given up hope of finding his daughter. Holloway had faced many false leads and hoaxes before and wrote de Jong off.
'Running out of possibilities'
"I was running out of possibilities," de Jong said. "I tried to convince the head prosecutor, the parents, then I tried to convince the other head prosecutor, but he didn't listen."
That's when de Jong attempted what he called "Mission Impossible."
The site where de Jong says Holloway is buried now rests under the high-rise Marriott Aruba Surf Club resort, in an area called the Spyglass Tower. De Jong bought an electric drill with a diamond tip and went to Aruba to investigate the site. He says he carefully planned a scheme to drill a hole through the hotel floor, but his efforts to take a look in the tower's foundations ultimately failed.
Next, de Jong turned to local newspapers. But before long, the new lead hit a snag -- on the night Holloway disappeared, officials say construction of the Spyglass Tower hadn't started.
Aruba's chief prosecutor, Eric Olthof, says he spent weeks investigating de Jong's assertions, including a 2010 sworn statement to police.
When asked about what construction was underway on May 30, 2005, Olthof says Marriott officials said there was no construction at the spot de Jong pointed out.
"It's evident now the story of Mr. de Jong can't be true, so that's a closed book," Oltholf told CNN.
Enter Google Earth ...
On the other hand, some signs complicate Marriott's official time line of the construction of Spyglass Tower. A satellite image from Google Earth taken in June 2005, just a few weeks after Natalee Holloway disappeared, shows what appears to be the blurry outlines of structures that could resemble a construction site.
Holloway's father says he remembers the site from the day after his daughter's disappearance. "I can tell you for a fact. I was there on June 1, and there was definitely construction in that area," he says.
Holloway says he has information that construction began in February, but he was not clear on how he knows. Natalee Holloway was last seen on May 30, 2005.
CNN's Savidge received this statement from Jeff Flaherty of global corporate relations at Marriott International Inc.: "Mr. de Jong has contacted Marriott in the past and each time we have suggested to Mr. de Jong that he present his account of the matter to the authorities. As we have done all along, we cooperate fully with the authorities whenever they are conducting an official investigation."
For his part, de Jong says he believes authorities are dragging their feet.
"It's the inconvenient truth. It would damage the image of Aruba as one happy island," he says.
Oltholf won't say that de Jong is lying, but says his statement can't be true.
"It's the statement of the management of the Marriott that at that time, at that place, there was no construction. When there's no construction, Natalee Holloway can't be buried in the crawl space under the foundation," he said.
And, he added, that Marriott has provided proof.
"I think they're not wrong because they can prove it with some photographs and some other material. And I think they are right with what they are saying. And Mr. de Jong can't prove it," said Olthof.
A high school graduation trip
Holloway was on a high school graduation trip when she vanished. The 18-year-old from Alabama was last seen leaving a bar with three young men, two brothers and van der Sloot, then 17. Van der Sloot has never been charged in Holloway's disappearance. He says he was with Holloway that night, but left her on the beach, alone.
In 2012, he pleaded guilty to the 2010 murder of Stephany Flores in Peru. Flores was killed five years to the day Holloway disappeared. Van der Sloot is serving a 28-year prison sentence
. He is expected to be extradited to the United States
after his release.
What does he think about de Jong's claim that he saw him that night, in 2005? Through his attorney, van der Sloot did not call de Jong a liar, but told CNN's Savidge he was a drug dealer and is only out for money.
De Jong denies he ever asked for money, and laughs off the accusation, saying van der Sloot's angry because he's scared.
"I think he's desperate. I mean the only reason why he does that is that he's afraid that people go to believe me, " he said.
In the United States, he's been indicted on federal charges of extortion and wire fraud. American authorities accuse him of extorting money from Holloway's mother by offering bogus information about her daughter's disappearance.