The transition back to living with the others didn't go well. There was another fist fight and Nelson and Stewart left the apartment shortly after Touhy's return. Nelson went to Minneapolis where his mother turned him in to the FBI just hours after he arrived. Within minutes after his arrest, Nelson told the agents everything he knew about the escapees and by nightfall, a small army of agents was slowly and carefully moving in around the gang's apartments.
J. Edgar Hoover arrived on the scene to personally supervise the raid because he felt that Touhy had sullied the Bureau's reputation when he escaped conviction from the Hamm kidnapping case built by Special Agent Purvis back in 1933. To Hoover, the FBI's capture of Touhy would justify the Bureau's original campaign to put him behind bars. Legally, Touhy and the others hadn't done anything wrong. Incredibly there was no law in the state of Illinois against escaping from prison nor would there be one until 1949. Even if there were such a law, as a federal agency, the FBI still had no grounds to enter the case. Hoover needed a reason to lock Touhy up so his brain trust created one. It was decided that Touhy and the others had violated the federal law which required all men of military age to notify their draft boards when they had changed addresses. The fact
that Roger was well over draft age and had already served his country and that the others as convicted felons weren't required to register were only facts that clogged the theory.
The FBI's Chicago office had the entire arrest procedure planned out days in advance of Hoover's arrival. Agents and snipers already surrounded the building and undercover agents had rented several apartments in the building.
When O'Connor and Mclnerney came home, six agents, guns drawn, leaped out from behind a hallway door.
"Put your hands up! We're federal officers!"
O'Connor turned, and according to agents' reports, fired his .45 caliber automatic twice, with the bullets ending up in the stair rail. Mclnerney never got to reach for his .38 caliber; the agents returned fire and pumped at least thirty-five shells into the two convicts.
Roger and Banghart arrived back at the apartment about an hour later. Recalling the incident Touhy wrote, "We went to the Kenmore flat and up the back stairway after I had parked the car a block away...the joint felt creepy to me, and I prowled around uneasy as an alley tomcat at midnight mating time and peered out the windows."
At zero hour, powerful search lights were turned on to the windows of Touhy's apartment and then a loud speaker cracked the silence of the night with "Roger Touhy and the other escaped convicts! The building is surrounded. We are about to throw tear gas in the building. Surrender now and you will not be killed."
Banghart wanted to shoot it out, but Roger negated this move. They debated over what to do for the next ten minutes before Banghart shouted out the window "We're coming out!"
"Then come out backward with your hands high in the air! Banghart, you come out first."
Banghart, wearing only his pants, appeared at the front door, his back to the agents. Roger, clad in fire-engine-red pajamas, followed him.
The agents leaped on each of them as they came out of the building and knocked them to the freezing cold pavement and handcuffed them.
A dozen agents rushed into the apartment and found five pistols, three sawed off shotguns, a .30.30 rifle and $13,523 in cash which they handed over to Tubbo Gilbert who was still the Chief Investigator for the States Attorney's Office.
When Gilbert returned the cash to the prisoners at Stateville prison, he said that he had only been given $800 by the FBI.
After Touhy and Banghart were handcuffed, J. Edgar Hoover, surrounded by a dozen agents and a dozen more newspaper reporters, strolled up to Banghart and said "Well, Banghart, you're a trapped rat."
Banghart burst out into a huge smile. "You're J. Edgar Hoover aren't you?" he asked.
'Yes," Hoover beamed, "I am."
Banghart nodded his head and said, 'You're a lot fatter in person than you are on the radio."