On January 7, 1941, the Valparaiso "Vidette-Messenger" reported that Governor M. Clifford Townsend, a Democrat, was considering granting an early parole to Stephenson. No parole was approved that year. Stephenson was paroled on March 23, 1950 by a Democratic administration, but violated parole by disappearing on or before September 25, 1950. On December 15, 1950, he was captured in Minneapolis, Minnesota and returned to custody. He was sentenced in 1951 to serve 10 years in prison. In 1953, he pleaded for release, denying that he had been a leader of the Klan. On December 22, 1956, the state paroled him on condition that he leave Indiana and never return. Stephenson moved to Seymour, Indiana, where he soon married Martha Dickinson. They were separated in 1962 when he left and never returned. Martha petitioned for and was granted a divorce in Jackson County Circuit Court in Brownstown in 1971, not knowing that he had remarried and died in 1966.