CHATTANOOGA, Tenn. — C. H. Butcher Jr. pleaded guilty Wednesday to four counts of tax fraud that wrapped up the string of federal bankruptcy-fraud charges stemming from his former $1.5-billion banking empire.
Butcher, 49, faces a maximum 25-year prison sentence and fines of more than $1.5 million, based on the terms of a plea agreement.
Butcher's wife, Shirley, and father, C. H. Butcher Sr., were expected to enter plea agreements early Wednesday before U.S. District Judge Thomas Higgins, but those agreements apparently developed problems.
Higgins began court Wednesday with a series of secret bench conferences with all defendants but Butcher's son, C. H. (Butch) Butcher III. The judge then recessed court with no explanation.
Five of the six people charged along with C. H. Butcher Jr. in the bankruptcy fraud case were reported to have plea arrangements.
Butch Butcher, 26, had no such agreement, and charges against him were dismissed Wednesday afternoon after prosecutors said he lacked the mental aptitude to understand the complex transactions he was accused of participating in.
C. H. Butcher Jr. entered his guilty pleas Tuesday in the fifth week of his bankruptcy fraud trial. Also named as defendants were his three family members and three family associates. The family associates indicted on bankruptcy fraud and conspiracy charges are Gary Long, 44, a Knoxville businessman; Teri Atchley, 30, a girlfriend of Butch Butcher, and Emma Bailey, 45, a longtime friend and former employee of Butcher Sr.
The defendants are accused of helping C. H. Butcher Jr. hide millions in property and money after he and his wife were forced into bankruptcy in 1983.
C. H. Butcher Jr., who pleaded guilty Tuesday to 12 charges before Higgins, was entering additional guilty pleas before U.S. District Judge Allan Edgar while the scenario with his co-defendants unfolded in Higgins' courtroom.