Liewellyn and Edith Banks Trial: 1933

Things got worse after Fehl and Schermerhorn were sworn in. Government operations came to a halt when Banks/Fehl supporters flooded the courthouse (where the county government offices were located) and harassed those who opposed their leaders. The courthouse steps and the local armory became the sites of pro-Banks/FehI rallies. Banks started talking about "the hangman's noose" and of using vigilance committees to remove the local district attorney and circuit court judge (both Banks opponents) from office. A county commissioner who opposed Banks and Fehl found a large group of people outside his home one night demanding his resignation. Another commissioner and the former county judge were arrested on bogus charges of mutilating county records. A paramilitary group, consisting mostly of unemployed young men, served as Banks's personal bodyguard and protected the offices of his newspaper. An organization called the Good Government Congress (GGC), which consisted of Banks/FehI supporters, was formed, and it soon claimed 6000 members throughout the county. Tensions were high, and fears that Banks's and Fehl's followers would turn violent led members of the local American Legion posts to guard the homes of anti-Banks/Fehl officials.

When former sheriff Jennings lost his reelection bid, he immediately demanded a recount. As it proceeded, demonstrations were held denouncing the "plot" to unseat Sheriff Schermerhorn. Then, on February 20, 1933, as a GGC rally was being held in the courthouse auditorium, about 15 men acting under Banks's and Fehl's orders broke into the courthouse vault and stole three dozen pouches containing ballots from the contested sheriff's election. The next morning, after the break-in was discovered, the Oregon State Police were called in by Governor Julius Meier to investigate. Over the next few days, some ballot pouches were found burned in the courthouse furnace and ballots were found floating in the Rogue River.

Fehl expressed outrage at the break-in and blamed Jennings and his supporters for the crime. However, after extensive questioning of two GGC members who worked at the courthouse, the police had enough evidence to arrest Fehl, Schermerhorn, and several others. On February 27, they were all taken into custody. That evening, GGC members threatened to march on the jail, but the sight of state police armed with submachine guns at the jailhouse prevented anything from happening. However, one anti-Banks/Fehl newspaper editor was cornered on a public street and horsewhipped across the face by a GGC official.

Initially, Banks was not implicated in the break-in, but the investigation continued. Sheriff Schermerhorn's authority to make arrests was revoked by the local circuit court judge and placed into the hands of Medford constable George Prescott. Later, after more evidence was collected, the circuit court ordered Banks arrested for his role in the ballot theft.