Urschel had collected and left considerable evidence that assisted the subsequent FBI investigation, which eventually led to Kelly's arrest in Memphis on September 26, 1933.

He was arrested in Tulsa, Oklahoma, in 1928, for smuggling liquor onto a Native American Reservation, and sentenced to three years at Leavenworth Penitentiary, Kansas, beginning February 11, 1928.

[6] According to Persons in Hiding, a 1938 book by FBI Director J. Edgar Hoover, Kelly worked with Kathryn and Eddie Doll in the kidnapping of a wealthy manufacturer in South Bend, Indiana, for a $50,000 ransom.

The New York Daily News called his abduction "spectacular", asserted that "for brazen audacity (it) has no parallel", and suggested that such crimes "represent a challenge to organized society".

Completion of these projects (including a 16-part series in the Daily News), were ready for publication within days of the March 1, 1932, kidnapping of Charles Lindbergh Jr., meaning that the infant's abduction was presented not as a single crime but as part of a growing national problem.

[9] Urschel, having been blindfolded, made note of evidence of his experience, including remembering background sounds, counting footsteps and leaving fingerprints on surfaces in reach.

Special agents from Birmingham, Alabama, were immediately dispatched to Memphis, where, in the early morning hours of September 26, 1933, a raid was conducted.

George and Kathryn Kelly were taken into custody by FBI agents and Memphis police officer Thomas Waterson and Sergeant William Raney.

However, the FBI's earliest account of the event was written between three and five days after Kelly's arrest and states: "Agent William Asbury 'Ash' Rorer saw that Kelly…had proceeded into the front bedroom and was in a corner with his hands raised.

[10][11][12] The arrest of the Kellys was overshadowed by the escape of ten inmates, including all of the members of the future Dillinger gang, from the penitentiary in Michigan City, Indiana, that same night.

He died of a heart attack at Leavenworth on July 17, 1954, the day before his 60th birthday, and was buried at Cottondale Texas Cemetery in Kathryn Kelly's stepfather's family plot[21][22] with a small headstone marked "George B. Kelley 1954".