In August 1927, when the conflict was at its height, the Inyo County bank collapsed, which massively undermined valley resistance. An audit revealed that there were shortages in both cash in the vault and amounts shown on the books. The Watterson brothers were indicted for embezzlement, then tried and convicted on thirty-six counts. Since all local business had been transacted through their bank, the closure left merchants and customers with little more than the small amount of money they had on hand. The brothers claimed that the fraud was done for the good of the Owens Valley against Los Angeles, and this excuse was generally believed to be true in Inyo County. The collapse of the bank wiped out the lifetime savings of many people, including payments gained from the sale of homes and ranches to Los Angeles.