Busting a Banker

At one time Tennessee's Jacob Franklin ("Jake") Butcher hobnobbed with the likes of Jimmy Carter and Bert Lance, controlled 26 banks with his brother and had an estimated personal worth of $400 million. But his fall has been as spectacular as his rise. In 1983 Butcher went broke, and ten of the banks were declared insolvent. Last week Butcher, 48, together with a longtime business associate and a lawyer, was indicted by a federal grand jury in Knoxville, Tenn.

The accusations stem from loans granted to Butcher and the others by banks he controlled. They are charged with ille gally borrowing more than $7 million to finance an Alabama mining company in which Butcher owned a 75% interest. Butcher and his associate are also accused of using forgery and fictitious names to borrow $7.9 million for, among other things, a $400,000 yacht for Butcher. After his court appearance, the onetime Democratic candidate for Governor of Tennessee and organizer of the 1982 Knoxville World's Fair asserted, "I am innocent." If convicted, Butcher faces fines of $225,000 and up to 220 years in prison.