In 1865, Red was imprisoned for having meat in his possession for which he could not account. Unable to pay the twenty-five pound fine, he was sentenced to six months with hard labour, served at Kilmore Gaol. Once released, Red drank heavily, which had an ultimately fatal effect on his health. In November 1866 his body started to swell from dropsy and he died at Avenel on 27 December 1866. He and his wife had eight children: Mary Jane (died as an infant aged 6 months), Annie (later Annie Gunn), Margaret (later Margaret Skillion), Ned, Dan, James, Kate and Grace (later Grace Griffiths). The saga surrounding his father and his treatment by the police made a strong impression on the young Kelly. A few years later the family selected of uncultivated and untitled farmland at Eleven Mile Creek near the Greta area of Victoria.