Raymond and wife Dorothy Mackaye were based in Los Angeles when Kelly arrived to break into motion pictures. Raymond, often on the road in various musical productions, never had to worry that his wife was neglected. Kelly and Mackaye were seemingly inseparable and were often seen at gin parties and taking long car rides together. Weeks before the tragedy, Raymond drunkenly ordered Kelly out of his house and told his wife to end her relationship with the actor. Mackaye insisted that nothing unseemly was happening between them and flatly refused to end the friendship. When the song-and-dance man left on tour with the musical Castles in the Air, Mackaye and Kelly continued seeing one another.
On Saturday, April 16, 1927, an exhausted Ray Raymond arrived at his home at 2261 Cheremoya Drive in Hollywood following an all night train trip from San Francisco where several hours earlier he had concluded the final performance in Castles in the Air. The 33-year-old performer immediately resumed arguing with Mackaye about her 26-year-old "friend" and she left the house on the pretext of shopping for Easter supplies. Mackaye drove across town with a friend to Paul Kelly's apartment where she downed at least two gin fizzes. Mackaye informed her ardent admirer that Raymond had baldly accused them of having an affair. Paul Kelly, enraged and most likely inebriated, angrily phoned Raymond at 7:00 P.M. and told him he was coming over to discuss the matter. Charlotte Ethel Lee, the Raymond's black maid and the only witness (besides the couple's 4 1/2-year-old daughter, Valerie) to the incident told police in her statement:
Kelly left the scene, returned to his apartment, and related the events of the violent confrontation to Mackaye. Raymond was at home nursing his blackened eye and other injuries when Perry Askom, a friend and fellow-cast member of Castles in the Air, accompanied by his wife dropped in on him moments after the beating. Askom later related to police that Raymond told him, "Kelly came over and beat (me) up and that (I) never had a chance." Charlotte Ethel Lee would concur in her police statement noting that the 5'6", 140 pound Raymond was little more than a "punching bag" for the younger, more athletic 6'0, 190 pound Kelly. The Askoms left shortly after Mackaye returned home. The next morning at 6:00 A.M., Raymond was found by housekeeper Lee lying flat on his back on the bedroom floor near the side of the bed unconscious, breathing unnaturally, and "frothing at the mouth." Dr. Walter Sullivan was called, examined the song-and-dance man, and ordered him rushed to the Queen of Angels Hospital. According to published reports, Mackaye continued to visit Kelly in his apartment up to the moment her husband died without regaining consciousness at 5:20 A.M. on April 19, 1927 -- two days after the altercation with the actor. Dr. Sullivan, paid $500 by Mackaye for his two day treatment of Raymond, was poised to sign a death certificate stating the man had died of "natural causes" when the coroner, demanding an autopsy, hurriedly reclaimed the body from the mortuary. The autopsy confirmed that Raymond had sustained a bad beating at the hands of the younger man. Raymond suffered two fractured ribs, cuts on his forehead, a damaged left eye, bruises on his chest, shoulder, arms, and shins, and a serious head injury resulting in a hemorrhage covering the right portion of the brain. The cause of death was officially listed as hypostatic pneumonia following an extensive subdural hemorrhage on the right side of the brain. Dr. Sullivan's supposed ignorance of the fact that Raymond had been in a fight prior to his death opened the medical man up to allegations that the exorbitant $500 fee he received from Mackaye made him a co-conspirator in trying to cover up the facts of his patient's death.