So-and-so's friend, a girl in her teens, is babysitting for a family in Newport Beach, Ca. The family is wealthy and has a very large house you know the sort, with a ridiculous amount of rooms. Anyways, the parents are going out for a late dinner/movie. The father tells the babysitter that once the children are in bed she should go into this specific room (he doesn't really want her wandering around the house) and watch TV there.
The parents take off, and soon she gets the kids into bed and goes to the room to watch TV. She tries watching TV, but she is disturbed by a clown statue in the corner of the room. She tries to ignore it for as long as possible, but it starts freaking her out so much that she can't handle it.
She resorts to calling the father and asks, "Hey, the kids are in bed, but is it okay if I switch rooms? This clown statue is really creeping me out."
The father says, seriously, "Get the kids, go next door and call 911."
She asks, "What's going on?"
He responds, "Just go next door and once you call the police, call me back."
She gets the kids, goes next door, and calls the police. When the police are on the way, she calls the father back and asks, "So, really, what's going on?"
He responds, "We don't have a clown statue." He then further explains that the children have been complaining about a clown watching them as they sleep. He and his wife had just blown it off, assuming that they were having nightmares.
The police arrive and apprehend the "clown," who turns out to be a midget. A midget clown! I guess he was some homeless person dressed as a clown, who somehow got into the house and had been living there for several weeks. He would come into the kids' rooms at nights and watch them while they slept. As the house was so large, he was able to avoid detection, surviving off their food, etc. He had been in the TV room right before the babysitter right came in there. When she entered he didn't have enough time to hide, so he just froze in place and pretended to be a statue.
As told by a reader
Analysis: Like "The Babysitter and the Man Upstairs," this urban legend pits a lone teenage babysitter against a male intruder who has surreptitiously entered the house. It's disturbing on many counts, not least the hint of pedophilia in the revelation that the "midget disguised as a clown" has been spying on, playing with, or, in some versions, actually touching someone's children before his presence in the house is discovered.
In some variants for example, this one submitted by a reader in 2006 it's explicitly stated that the intruder is a sex offender with designs on the babysitter herself: