Scandals: 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...

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