Jacob Franklin "Jake" Butcher (1936-)
Jake Butcher was a major figure in Tennessee banking and politics in the 1970s and early 1980s and the driving force behind the Knoxville International Energy Exposition (Knoxville World's Fair) of 1982. He also was the subject of a banking investigation and was convicted of bank fraud and imprisoned between 1985 and 1992.
Born in Dotson's Creek in Union County in 1936, Butcher was the son of Cecil H. Butcher Sr., a general store owner and organizer and president of the Union County Bank of Maynardville. Butcher attended the University of Tennessee and Hiwassee College and served one enlistment in the U.S. Marine Corps. He founded the Bull Run Oil Company, an Amoco distributorship, and engaged in commercial farming. On New Year's Eve 1961 he met up-and-coming movie star Sonya Wilde on a blind date, and the couple married in 1962.
Butcher's interest in banking dated from his youth and work in his father's bank. In 1968 he and his younger brother Cecil H. Butcher Jr. began acquiring banks, borrowing large amounts of capital to finance their purchases of bank stock. By 1974 the brothers controlled eight banks in Tennessee along with other business properties. In that year Jake Butcher used borrowed capital to purchase stock in Hamilton National Bank, Knoxville's largest banking institution, with 39 percent of the city's total banking reserves. After a brief takeover fight he won complete control and changed the bank's name to United American Bank. By 1982 the United American Bank accounted for over half of the business loans in Knoxville. In that year Jake Butcher declared a net worth of approximately $34 million.
As the Butcher brothers continued to acquire banks and other businesses, Jake developed a keen interest in politics. After failing to win the Democratic Party's gubernatorial nomination in 1974, he won the nomination in 1978, only to lose in the general election to Republican Lamar Alexander. At the same time, he was instrumental in bringing the Knoxville International Energy Exposition to Knoxville in 1982, and was considering a third run for the governorship.
Federal bank examiners had long suspected that the Butcher brothers' three-billion-dollar empire was largely a paper empire operating under improper management. On November 1, 1982, 180 FDIC investigators descended on all the Butcher banks simultaneously, thus preventing the transfer of assets from one bank to shore up another. Ultimately they found that bank acquisitions had been made through loans from Butcher-owned banks and uncovered a pyramid of unsecured loans, forged loan documents, and bank fraud. On February 14, 1983, United American Bank, the capstone of Jake Butcher's financial empire, failed; in August 1983, he was involuntarily declared bankrupt with listed assets of $11.9 million and liabilities of $32.5 million. In May 1985 he pled guilty to federal charges of bank fraud and was sentenced to twenty years in prison. He was released on parole in 1992, after having served almost seven years of his sentence. Butcher accepted employment at a Toyota automobile distributorship and lives in quiet obscurity--his fortune of cash, real estate, automobiles, houseboats, and property having been swept away in a series of public auctions.
Published » December 25, 2009 | Last Updated » January 01, 2010