In 1932, Madden was involved in the murder of Vincent "Mad Dog" Coll, who had been extorting money from several mobsters, including DeMange and Madden. After being arrested for a parole violation that same year, Madden began facing greater harassment from police and encroachment on his territory by Italian-American Mafia families, until he finally left New York in 1935.
Leaving behind racketeering, Madden settled in Hot Springs, Arkansas, which had become known as a haven for various criminals, with a corrupt city government and police force. He also became involved in local criminal activities, especially illegal gambling. The Southern Club became a popular nightspot for mobsters; Charles "Lucky" Luciano was apprehended there in 1936. Madden became a naturalized U.S. citizen in 1943 and eventually married the daughter of the city postmaster. He lived in Hot Springs until his death in 1965