Judge sentences businessman to 3 years for bankruptcy fraud, money laundering; Case is another twist in man's unusual life


Another chapter was written yesterday in the remarkable roller-coaster life story of Edward R. "Slim" Butler.

Butler -- a teen-age murderer who later earned a master's degree and a measure of acclaim as the builder of the Palladium catering hall in Park Circle -- was sentenced to three years and one month in federal prison for bankruptcy fraud and money laundering in Baltimore.

The 58-year-old entrepreneur and minister was convicted in December of illegally concealing $350,000 from creditors in his 1990 bankruptcy filing and laundering it through a variety of sources. His bankruptcy stemmed from financial problems at the Palladium, the castlelike facility hailed when it opened in 1986 as a hallmark of black business development, and other enterprises.

Imposing the sentence before a courtroom full of Butler's supporters, U.S. District Judge Frederic N. Smalkin said determining an appropriate punishment was not easy because Butler is a "multifaceted individual."

"He started out as far down as you can get," Smalkin said. "He was able to work himself up to the high ranks of society and make something quite wonderful of himself. Then he got into a jam."

Butler, a resident of the 7200 block of Croydon Road in Milford, in western Baltimore County, said in brief remarks in court that he hoped his spirituality wouldn't be "tainted" by his conviction.

After the hearing, Butler, who became a minister in the Khepera MAAT-Temple in 1992, said he did not fear a return to prison. "That's what spirituality's all about. You take something bad and turn it into a positive," he said.

Butler's attorney, William B. Purpura, said he will appeal the conviction and ask that his client remain free until an appeal is heard.

Assistant U.S. Attorney Barbara A. Sale said bankruptcy fraud cases are increasing along with bankruptcy filings but that the Butler case stood out because of Butler's pattern of "obstruction and recalcitrance."

"He violated five different judicial orders in the bankruptcy proceedings," Sale said.

During those proceedings, Butler frequently dismissed his lawyers and handled the case himself. He was described by one judge as a "litigious gadfly" who "unsuccessfully litigated a myriad of matters."

He was first tried in June on the federal criminal charges for which he was sentenced yesterday. That trial ended with a hung jury.

Unusual as Butler's case may be, it is not as unusual as his life.

At 15, he was convicted of the murder of a grocery store owner during a robbery and sentenced to life in prison. Because of his good conduct and relationship with the prison chaplain, his term was reduced to 20 years and he was paroled in 1969.

He enrolled in Loyola College, where he starred on the basketball team and earned a bachelor's degree, then a master's in psychology. After earning his degrees, Butler turned to business, developing a shopping center, a funeral home and the Palladium, a $3 million catering hall. When the business went bad, Butler filed for bankruptcy.

His latest legal troubles stem from his failure to report $350,000 he had received in a settlement from a company that owed him money. Instead of depositing the money in an escrow account as he had been ordered to do, he spent the money on "bad investments, living expenses and attorneys' fees," according to court records.

Pub Date: 2/27/99

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