In one of the government's most successful infiltrations, agent "Red" Sullivan became an active member of the FONI's Youth Division. He eventually had a change of heart, revealed the deception, and truly embraced the principles of Nonconformism.

It was during this period that government agents began to infiltrate both the FONI and the NCU. The FONI, with its international base, seemed like a possible front for foreign nationalists, and was the main target of these investigations. Government records in Mexico are less available; it may never be known if the rumors of Mexican infiltrations are rumor, or fact.

It was finally in Ashtabula, a port town in northeastern Ohio, that the tension erupted in 1923. The FONI had formed a local alliance with labor organizations and scheduled a parade and picnic to celebrate their cooperation; in protest, local members of the NCU attended as well. The Fagans were present as guests of honor; Horace Walpole Naylor came to reinforce the local chapter of the NCU.

No one has ever been certain how the violence started, but it is universally remembered as the worst historic failure of what we now call Team Individualism: the rival nonconformist groups threw themselves at one another in a heated brawl. Local police, possibly aided by federal agents, surrounded and subdued the mob. Most of the participants, and the leaders of both organizations, were confined in the city's single jail.

In looking back to their confinement all who were involved identified this as the turning point in relations between the NCU and the FONI. Being arrested and jailed together made their own message clear to them: what nonconformists have in common far outweighs the differences that separate them.

Charges were eventually dropped. The leaders of both groups counseled their membership to adopt an attitude of mutual respect. Hostilities ceased.

The NCU and FONI began to cooperate on their political stance, and eventually issued joint statements and proclamations. In 1925, a series of discussions was started (on neutral "ground", shipboard on the Mississipi River) and those talks led to the combination of the FONI and the NCU as one joint organization: the NCU-FONI.