Butcher, Family Members, Indicted On Conspiracy To Hide Assets
KNOXVILLE, Tenn. (AP) _ Three generations of the once-powerful Butcher banking family have been charged with conspiracy to hide bankrupt financier C.H. Butcher Jr.’s assets, including luxury cars and a $1.6 million bank account.
Butcher’s wife, Shirley R. Butcher, his 83-year-old father, Cecil H. Butcher Sr., and his son, Cecil H. Butcher III, arrived at the federal building Thursday and were later released on their own recognizance.
During a detention hearing today for C.H. Butcher Jr., lawyers seeking his release from jail attempted to prove that, contrary to affidavits filed by the government labeling him a drug addict, the former millionaire is a ″family man″ who is not likely to flee prosecution.
″I’ll be the most surprised person in the world if C.H. doesn’t stay,″ said Dr. John Howe, who said he has been a friend of Butcher’s for 20 years.
C.H. Butcher Jr., 47, the younger brother of convicted bank swindler Jake Butcher, has been in the Knox County Jail since Feb. 5, when he was indicted on 26 counts of mail, wire and securities fraud in the failure of his Southern Industrial Banking Corp. The new indictments handed up Thursday name him, three relatives, a business associate and one other person on charges of conspiracy and bankruptcy fraud.
Jake Butcher, a two-time candidate for Tennessee governor and promoter of the 1982 World’s Fair in Knoxville, is serving a 20-year prison term on bank and tax fraud in the failure of his United American Bank, the third worst bank failure since the Depression.
The 75-page indictment handed down Thursday charges the four Butchers with conspiring to hide C.H. Butcher Jr.’s assets from authorities to maintain a ″lavish and extravagant lifestyle.″
Also named in the indictment were Gary F. Long, a friend and business associate of C.H. Butcher Jr., and Teryl Atchley, described in federal documents as the girlfriend of Cecil H. Butcher III.
Federal agents escorted the defendants, except for the eldest Butcher, in handcuffs - Mrs. Butcher hiding hers with a purse and scarf. All defendants waived formal reading of the 74-count indictment, and arraignment was scheduled for Feb. 20 in U.S. District Court.
The indictment describes the channeling of millions of dollars in cash and property in shell accounts and businesses to avoid bankruptcy creditors after C.H. Butcher Jr. was declared bankrupt in July 1983 and Mrs. Butcher three months later.
″The purpose of the conspiracy was to defraud the bankruptcy creditors of C.H. Butcher Jr. and Shirley R. Butcher by fraudulently transferring and concealing money and property ... in order to maintain their lavish and extravagant lifestyle,″ the indictment said.
Each of the defendants was indicted on one conspiracy count. In addition, C.H. Butcher Jr. was named in 70 counts of bankruptcy fraud, Mrs. Butcher with 19 counts, Cecil H. Butcher Sr. with 29 counts and Cecil H. Butcher III with five counts. Long and Atchley also were named in two counts of bankruptcy fraud each.
A conspiracy conviction could bring a maximum of five years in prison and a $10,000 fine, while a conviction on a bankruptcy fraud charge could bring a maximum of five years in prison and a $5,000 fine.
The government alleges C.H. Butcher Jr. set up accounts and businesses in Grand Cayman and Grand Turk, in the British West Indies, to transfer and launder assets before bringing them back into the United States.
It further describes alleged transfers of ownership of two Mercedes, a white convertible Rolls Royce, a condominium and 130 bags of silver coins.
C.H. Butcher Jr. also is accused of transferring $1.65 million from the Owen S. Freed Trustee account at City National Bank of Miami to the account of United Southern, Ltd. at Barclay’s Bank International, Grand Cayman, in an effort to conceal assets.
The special grand jury, formed to investigate C.H. Butcher Jr., handed down the indictment the same day U.S. Magistrate Robert P. Murrian unsealed affidavits in which prosecutors argued he should not be released on bond.
The affidavits described foreign bank accounts, a cocaine habit and discussions of fleeing the country as indications that Butcher should remain behind bars until his trial.
Jake and C.H. Butcher Jr. began building their financial empire with a Lake City bank in 1968, but eventually went separate ways. C.H. Butcher Jr. eventually amassed a $1.5 billion, 22-bank empire across East Tennessee and Kentucky before his Southern Industrial Banking Corp. went under in 1983, the same year that Jake Butcher’s United America Bank collapsed.