Butcher Bankruptcy Fraud Trial Ends
CHATTANOOGA, Tenn. (AP) _ A five-week bankruptcy fraud trial stemming from the collapse of C.H. Butcher Jr.’s banking empire has ended with the final five defendants pleading guilty to reduced charges or being dismissed from the case.
Butcher’s wife, Shirley, 50, faces a possible sentence of three years in prison, a $500 fine and payment of restitution after pleading guilty Friday to a charge of failing to report a felony.
She admitted helping hide $10,399.60 in payments on a 1981 Rolls-Royce for her husband, who pleaded guilty earlier in the week to felony charges of hiding assets from creditors. The Butchers were declared bankrupt in 1983 when his $1.5 billion City & County Bank chain in Tennessee and Kentucky fell.
Mrs. Butcher had been charged in a 69-count indictment with conspiracy and 25 bankruptcy fraud counts, which carried maximum terms of five years each.
″I knew that there was something being done wrong, but I didn’t report it to the right authorities,″ she told U.S. District Judge Thomas A. Higgins. ″I will fully cooperate with the government.″
C.H. Butcher Sr., 84, Butcher’s father, was dismissed from the case but could face the same charges later under a provision of his agreement. He had been charged with conspiracy and 15 bankruptcy counts plus a separate money- laundering indictment.
Assistant U.S. Attorney Guy Blackwell said he decided not to prosecute the elder Butcher after receiving additional information from others in the case. Blackwell would not elaborate.
The other defendants were:
- Teryl Atchley, 30, the girlfriend of C.H. Butcher Jr.’s son, C.H. ″Butch″ Butcher III, who also was dropped from the case. She has agreed to cooperate in any future investigation and also could be brought on the same charges again. Ms. Atchley was named in the conspiracy and three other bankruptcy fraud counts.
Blackwell said a review of the evidence showed Ms. Atchley’s actions in the case were directed in part by C.H. Butcher Jr. and she didn’t realize what she did was illegal.
- Gary F. Long, 44, a businessman and Butcher friend, pleaded guilty to a misdemeanor of obstructing a bankruptcy court order by keeping $30,000 in a cigar box for C.H. Butcher Jr. from the sale of the Rolls.
Long faces a maximum penalty of one year and a $1,000 fine, but prosecutors recommended a suspended sentence plus short-term probation. He had been charged with conspiracy and nine bankruptcy fraud counts.
- Emma Bailey, 45, a family friend and former bank employee, pleaded guilty to a misdemeanor of willfully failing to file a required report for cashing more than $10,000 in U.S. Treasury note coupons for C.H. Butcher Jr.
She also could receive a maximum penalty of one year and a $1,000 fine, but was recommended for a suspended sentence plus two years of probation.
Ms. Bailey had been charged with conspiracy and 14 bankruptcy fraud counts plus the money-laundering indictment.
Mrs. Butcher, her husband, Long and Ms. Bailey all are to be sentenced May 22.
C.H. Butcher Jr. pleaded guilty Tuesday and Wednesday to conspiracy and four bankruptcy fraud counts in the case plus 11 other charges in four more indictments. Under his plea agreement, he faces up to 25 years in prison, more than $1 million in fines and restitution.
His 26-year-old son was dropped from the case Wednesday.