Binga then turned to the Chicago Clearing House Association to cover this amount as Binga State Bank was a member, but he was refused. Despite having solid assets, Binga was unable to liquidate these immediately as the banks assets were too heavily invested in mortgage loans to black churches and fraternal societies, many of which could not meet their payments after their members lost their jobs. Binga refused to seize the properties of these community institutions and in June 1930 the Auditor General of the State of Illinois closed the bank down. Binga lost his personal fortune as well as that of many depositors. As soon as the bank was closed down, Binga's activities were investigated, leading to criminal charges. He was indicted in March 1931 for embezzlement. The prosecution argued that Binga took out inadequately secured loans to speculate in real estate, but his first trial in 1932 ended in a hung jury. He was then charged with depositing money that was intended for investment in a new bank, into his personal account and when he was tried a second time in 1933, he was found guilty. He was sentenced to ten years in prison and this caused resentment within his community who felt that racism was part of the Bank's failure. Clarence Darrow was Binga's attorney and although virtually retired, attempted to persuade a parole board hearing for his early release. He didn't succeed and it was nearly two years later that Binga was paroled from Joliet Prison to the custody of a catholic priest Rev Joseph F Eckert in 1938. Protests and a 10,000 signature petition from the community who themselves had suffered losses in his dealings, were considered a contributory factor in his release. His wife had died in 1933 and on his release from prison, he was given a $15 a week job as a janitor at St. Anselm's Church, spending the remainder of his life in poverty. Binga always maintained his innocence in the affair and was given a full pardon by Gov. Dwight H. Green in 1941. He eventually went to live with his nephew and died June 13, 1950, in St Lukes Hospital. He was buried in Oak Woods Cemetery.