When this misappropriation of state funds came to light, Rhoodie fled to Ecuador. By this time he was South Africa's Most Wanted Man and the government had instituted legal proceedings against him. In March 1979, Rhoodie moved to Great Britain where he attempted, unsuccessfully, to gain political asylum. In a BBC television interview with David Dimbleby on March 21, 1979, he strongly denied the accusations made against him, reiterating his claim that he was being made a scapegoat for the whole affair, and maintained that senior government figures, including the then Prime Minister, P.W. Botha, were both aware of and sanctioned the secret projects he had conducted as head of the Department of Information.
Shortly afterwards, Rhoodie moved to France, where he was eventually arrested by the French authorities and incarcerated for 88 days pending extradition to South Africa.
By 1979 Rhoodie was found guilty of fraud and sentenced to 12 years in prison. The sentence was later reversed by the appeals court in Bloemfontein. Rhoodie and his wife Katie left for the United States of America in 1982. His book The Real Information Scandal, which was published in October 1983, contained sweeping allegations of big-name involvement in secret information projects, involving military alliances with Israel and the election of Ronald Reagan as US President.
Eschel Rhoodie then moved to the United States where he worked in advertising. He lived there until his death on 17 July 1993.