Butcher Gets 20 Years in $790-Million Bank Failure
Jake Butcher, who climbed to success as a financier and chairman of the 1982 World’s Fair, was sentenced today to the maximum 20 years in prison for thefts that helped topple his $790-million banking empire.
“Your offense is one of the highest severity,” U.S. District Court Judge William K. Thomas told Butcher before ruling that he must serve at least six years and eight months.
Wiped Away Tears
Butcher, a one-time confidant of former President Jimmy Carter, wiped away tears with the back of his hand, and his wife, Sonya, and two daughters and two sons wept openly.
Butcher’s conviction and sentence was a benchmark for the Justice Department, which has been criticized by congressional watchdogs for its slow and erratic pace in prosecuting the perpetrators of major bank failures.
The two-time candidate for governor of Tennessee was ordered to report Sept. 3 to begin serving his sentence at an institution yet to be selected.
The judge noted that people convicted of bank fraud are normally sentenced to 40 to 52 months in prison but said Butcher’s crime needed a stiffer sentence because of the amount of money stolen and the fact that Butcher held office at his bank.
Confidence for Depositors
"(Depositors) must have confidence the money they place in banks will not be stolen by the bank’s owners,” Thomas said.
Butcher pleaded guilty to using a series of fraudulent loans to siphon more than $17 million from his banks. The money was diverted to businesses Butcher controlled or used to pay personal expenses, such as buying a $490,000 yacht.
Butcher’s flagship United American Bank in Knoxville was shut down Feb. 14, 1983, because of excessive loan losses in the third biggest bank failure since the Depression. That collapse led to the failures in 1983 of nine other Tennessee banks owned by Jake or his brother, C. H. Butcher Jr.