CHATTANOOGA, Tenn. — Former bank tycoon C. H. Butcher Jr. ended his 5-week-old bankruptcy fraud trial Tuesday by pleading guilty to conspiracy and bankruptcy fraud charges stemming from the collapse of his banking empire.
Butcher, 49, pleaded guilty to one count of conspiracy and four counts of bankruptcy fraud in a 69-count indictment alleging that he, members of his family and others tried to hide assets from creditors.
"I agree to plead guilty, and I am guilty to the charges just read, and they've agreed to drop the balance of the charges," Butcher told U.S. District Judge Thomas A. Higgins.
The conspiracy count carries a maximum sentence of five years in prison and a $250,000 fine; the remaining four counts carry a maximum of five years and a $5,000 fine each.
Butcher, younger brother of two-time Democratic candidate for governor and bank-fraud felon Jake Butcher, also agreed to plead guilty to one conspiracy count and four bank fraud counts in an indictment for which a trial date had not been set.
That 21-count indictment involves the 1981 purchase of a resort hotel on the Gulf Coast. C. H. Butcher Jr. was accused of defrauding banks he once controlled of $3.7 million in a scheme to buy the Royal D'Iberville Hotel in Biloxi, Miss.
In addition, Butcher said he would cooperate with prosecutors and would testify, if necessary.
Father Not in Court
Butcher, who ran the $1.5 billion-City & County Bank chain in Tennessee and Kentucky before it crumbled in 1983, was charged with attempting to conceal real estate, cash, silver coins, luxury automobiles and other assets from bankruptcy creditors.
All those charged in the case--except Butcher's father, C. H. Butcher Sr.--were in court when Butcher entered the pleas. C H. Butcher Sr. had been excused from the courtroom, but was believed to be in the building.
Besides the younger Butcher, defendants included his wife, Shirley R. Butcher; his father; the financier's son, C. H. Butcher III; and three associates, Emma Bailey, a family friend and former bank employee; Teryl Atchley, girlfriend of the youngest Butcher; and Gary F. Long, a business associate and friend.
A separate money-laundering indictment named C. H. Butcher Jr., his father and Bailey.
The bankruptcy fraud indictment detailed a web of transactions designed to disguise assets, including using accounts and businesses in the British West Indies to transfer and launder assets into the United States.
C. H. Butcher Jr. was acquitted last year on fraud charges in the demise of his Southern Industrial Banking Corp., a loan and thrift company.
Butcher's older brother, gubernatorial candidate Jake Butcher, pleaded guilty in April, 1985 before he was to stand trial in Knoxville on bank fraud.
Jake Butcher is serving a 20-year prison term in the demise of his $1.5-billion United American Bank chain in 1983.