Great frauds in history: the Butcher brothers' corrupt banking empire

Jacob and CH Butcher plundered their $3bn banking empire, leaving investors short of almost $400m.

Jacob Butcher and Jimmy Carter © Barry Thumma/AP/Shutterstock
Jacob Butcher (left) and Jimmy Carter
(Image credit: © Barry Thumma/AP/Shutterstock)

Jacob Franklin Butcher was born in Maynardville, Tennessee, in 1936. He worked in his father’s store, which operated as an informal local bank, before graduating from the University of Tennessee and serving in the US Marines. In 1968 Jacob and his brother, C.H. Butcher Jnr, bought a small bank in Lake City. Over the next 15 years they would build a banking empire. By 1982 the brothers controlled a consumer finance company, as well as 27 banks, though a combination of equity stakes and management contracts, with total reported assets of $3bn ($7.95bn in today’s money).

What was the scam?

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri