Could you please rephrase your question indicating exactly what you think is wrong with it.
On third or fourth reading it seems that "In fact" is superfluous but it could not be in the context.
May be the person speaking this setence was actually asked, "Have you found any witnesses?"
First he replied, "Few!"
Then was asked: "What do you mean?" (Because "few" in reply to first question is really a vague answer. Either he should have said "Yes" or "No".)
Then he answerd, "In fact, although the accident had occurred just outside the Hilton, no witnesses could be found, except for one woman, a resident of the Cayman Islands?"
In this situation "In fact" fits in well.
So in my opinion there is nothing wrong with this sentence.
NOT A TEACHER