On March 16, 1927, he was convicted of the robbery of a gas station in St. Joseph County, Indiana,[clarification needed] and sentenced to 25 years in prison.

While incarcerated in Indiana State Prison in Michigan City, Hamilton befriended a number of prominent bank robbers, such as John Dillinger, Russell Clark, Charles Makley, Harry Pierpont and Homer Van Meter.

[2][3] Dillinger was paroled in May 1933, but swore to liberate his friends, and had handguns smuggled in to Hamilton, Makley, Pierpont, Clark and several other convicts.

On September 26, 1933, a total of ten armed men, including Hamilton, escaped from the main gate of Indiana State Prison.

[2] Hamilton, himself shot twice during the East Chicago robbery, was left in the care of his girlfriend Pat Cherrington and underworld physician Joseph Moran, while Dillinger and the others headed to Tucson where they were apprehended by the authorities.

On March 6, three days after Dillinger's escape, the gang robbed the Security National Bank & Trust Company in Sioux Falls, South Dakota.

On April 22, the place was raided by the FBI under the direction of Melvin Purvis, who had received a tip about the gang's whereabouts from Henry Voss, a friend of Emil Wanatka, Little Bohemia's owner.

[2] Dillinger, Hamilton, Van Meter and Tommy Carroll escaped by jumping from a second floor window in the back of the lodge onto a mound of frozen snow, then running along the shore of Star Lake.

[citation needed] A day later, on April 23, Hamilton, Dillinger and Homer Van Meter were again confronted by authorities in Hastings, Minnesota, and another shootout ensued.

The amalgam restorations on the teeth of the body identified by Davis and Murray as Hamilton's were compared with his dental records from Indiana state penitentiary and were matched.