During the Prohibition era of the 1920s and 1930s Kelly worked as a bootlegger for himself as well as a colleague. After a short time, and several run-ins with the local Memphis police, he decided to leave town and head west with his girlfriend. To protect his family and escape law enforcement officers, he changed his name to George R. Kelly. He continued to commit smaller crimes and bootlegging. He was arrested in Tulsa, Oklahoma, for smuggling liquor onto an Indian Reservation in 1928 and sentenced to three years at Leavenworth Penitentiary, Kansas, beginning February 11, 1928. He was reportedly a model inmate and was released early. Shortly thereafter, Kelly married Kathryn Thorne, who purchased Kelly's first machine gun and went to great lengths to familiarize his name within underground crime circles.
Nonetheless, Kelly's last criminal activity proved disastrous when he kidnapped a wealthy Oklahoma City resident, Charles F. Urschel and his friend Walter R. Jarrett. Urschel, having been blindfolded, made note of evidence of his experience including remembering background sounds, counting footsteps and leaving fingerprints on surfaces in reach. This proved invaluable for the FBI in its investigation, as agents concluded that Urschel had been held in Paradise, Texas, based on sounds that Urschel remembered hearing while he was being held hostage.
An investigation conducted at Memphis disclosed that the Kellys were living at the residence of J. C. Tichenor. 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. Caught without a weapon, George Kelly allegedly cried, "Don't shoot, G-Men! Don't shoot, G-Men!" as he surrendered to FBI agents. The term, which had applied to all federal investigators, became synonymous with FBI agents. The couple was immediately removed to Oklahoma City.
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.
On October 12, 1933, George and Kathryn Kelly were convicted and sentenced to life imprisonment. The trial was held at the Post Office, Courthouse and Federal Office Building in Oklahoma City.
An investigation in Coleman, Texas, disclosed that the Kellys had been housed and protected by Cassey Earl Coleman and Will Casey, and that Coleman had assisted George Kelly in storing $73,250 of the Urschel ransom money on his ranch. This money was located by Bureau agents in the early morning hours of September 27 in a cotton patch on Coleman's ranch. They were both indicted at Dallas, Texas, on October 4, 1933, charged with harboring a fugitive and conspiracy, and on October 17, 1933, Coleman, after entering a plea of guilty, was sentenced to serve one year and one day, and Casey after trial and conviction, was sentenced to serve two years in the United States Penitentiary at Leavenworth, Kansas.
The kidnapping of Urschel and the two trials that resulted were historic in several ways. They were: 1) the first federal criminal trials in the United States in which film cameras were allowed; 2) the first kidnapping trials after the passage of the so-called Lindbergh Law, which made kidnapping a federal crime; 3) the first major case solved by J. Edgar Hoover's FBI; and 4) the first prosecution in which defendants were transported by airplane.
Machine Gun Kelly spent his remaining 21 years in prison. During his time at Alcatraz he got the nickname "Pop Gun Kelly". This was in reference, according to a former prisoner, to the fact that Kelly was a model prisoner and was nowhere near the tough, brutal gangster his wife made him out to be. He spent 17 years on Alcatraz as inmate number 117, working in the prison industries, and boasting of and exaggerating his past escapades to other inmates, and was quietly transferred back to Leavenworth in 1951. He died of a heart attack at Leavenworth on July 18, 1954, his 59th birthday, and is buried at Cottondale Texas Cemetery with a small headstone marked "George B. Kelley 1954". Kathryn Kelly was released from prison in 1958 and lived in relative anonymity in Oklahoma under the assumed name "Lera Cleo Kelly" until her death in 1985 at the age of 84.Machine Gun Kelly and his crimes were (loosely) portrayed in the 1958 film Machine-Gun Kelly starring Charles Bronson.
Machine Gun Kelly and his wife (called "Lou" in the film) are portrayed as rivals of Ma Barker's gang in the 1960 film Ma Barker's Killer Brood. Kelly is portrayed by Victor Lundin.
Machine Gun Kelly is portrayed by Richard Eschliman in a minor role, in the 1973 film Dillinger.
Machine Gun Kelly is a central character in the largely fictionalized 1974 TV film Melvin Purvis: G-Man.
Machine Gun Kelly is referenced in the movie So I Married an Axe Murderer by a former Alcatraz guard turned tour guide (Phil Hartman) as having blinded a prison "girlfriend" during his incarceration on the island.
Machine Gun Kelly is mentioned by a sheriff in Smokey and the Bandit Part 3 while chasing the Bandit.
A ship named Machine Gun Kelly appears in the Lupin III movie Alcatraz Connection.
Crime novelist Ace Atkins' 2010 book Infamous is based on the Urschel kidnapping and subsequent multi-state misadventures of George and Kathryn Kelly as they attempted to flee both the FBI and other gangsters eager to claim the Urschel ransom money.
Kelly is (along with Pretty Boy Floyd and Baby Face Nelson) one of the main characters of the comic book series Pretty, Baby, Machine.
Machine Gun Kelly and Kathryn Kelly were the inspiration for "Machine Gun Kelly" (1970), a song written by Danny "Kootch" Kortchmar and recorded by James Taylor on his 1971 album Mud Slide Slim and the Blue Horizon.
Richard Colson Baker is an American rapper from Cleveland who uses the stage name Machine Gun Kelly.