Yes, as a matter of fact Vernon did spent time in jail.
Back in 1937, when Elvis was about two years old, Vernon and Gladys' brother Travis Smith and a friend of theirs called Lether Gable, were accused of creating a false cheque and take the money.
Vernon had sold a pig to Orville Bean, the guy who lend him money for building his house. When Bean paid with a four dollar cheque, Vernon for some reason felt he earned more and changed the amount to fourteen.
Bean got angry and all three of them went to trial. Vernon was sentenced to three years in Parchman Farm, Mississippi state prison.
Hope this clears things up,