Madge Meredith's life took a dramatic turn on June 30, 1947, when she was convicted and sentenced to prison for 5 years to life for her alleged complicity in an assault against her former manager, Nicholas D. Gianaclis, and his bodyguard, Verne V. Davis. The assault, which reportedly took place as Gianaclis and Davis were nearing Meredith's home in the Hollywood Hills, involved the two men being beaten, kidnapped, and robbed by a group of individuals.
In a shocking twist, Gianaclis and Davis testified against Meredith, claiming that she was involved in the brutal attack. However, an official report issued by the California Assembly Interim Committee on Crime and Corrections in March 1951 revealed that Meredith had been framed. The report highlighted the sloppy handling of the case by the court and the inconsistent allegations made by the perpetrators, which were overlooked by the police.
In light of the new evidence, Governor Earl Warren commuted Meredith's sentence to time served in July 1951 and issued a statement expressing his disgust at the way her trial had been handled. It was later revealed that Gianaclis had orchestrated the entire ordeal in an attempt to gain ownership of Meredith's home.
Following her release from Tehachapi prison, the court ordered Meredith to receive back ownership of her home from Gianaclis. In a fitting punishment, Gianaclis, an immigrant from Greece, was subsequently denied U.S. citizenship by the U.S. Immigration Service.