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Joyce Judy’s ‘Series of Bad Decisions’ Comes to End in North Carolina

4 min read

(This article has been updated since its original publication. See end for details.)

One of the saddest cases of white-collar crime in Whispers’ long memory has come to an unsatisfying conclusion.

A federal magistrate in North Carolina has dismissed the civil case filed by Joyce Judy, former president of the Arkansas Employees Federal Credit Union, against Bob Schacht of Mooresville, North Carolina, the retired racecar driver who wired her $1 million overseas in November 2009 in the full expectation of a $50 million return in six weeks.

You read that right.

With that bonanza, they planned to buy the Iowa Speedway, which Schacht would run and where Judy would work for a salary in excess of $1 million a year.

Of course, Judy’s money was never seen again.

Half of that million dollars, readers will recall, belonged to an AEFCU customer who believed that Judy had invested it in a super-safe, high-yielding certificate of deposit. Judy pleaded guilty to bank fraud and spent most of 2012 and 2013 in federal prison as a result.

The civil case that Judy, represented by Drake Mann of Little Rock, filed against Schacht in 2011, and Schacht’s countersuit, languished during her imprisonment, but it heated up in 2014. On Dec. 18, U.S. Magistrate Judge David C. Keesler filed a 38-page order in which he drew heavily on depositions given by Judy, Schacht and a third partner in the investment, Charles L. “Chuck” Walker of Richfield, North Carolina.

Judy and Walker had met during a layover at the Dallas-Fort Worth airport a couple of years before the 2009 investment adventure and had stayed in touch, she testified in her deposition. Walker introduced her to Schacht, his longtime friend from the racecar circuit, for the purpose of raising money to buy the racetrack in Newton, Iowa, but neither Schacht nor Walker contributed any money to the investment.

Judy claimed she never gave Schacht permission to actually transfer the money that she had put in a Bank of America account that they jointly controlled. The money was just supposed to be held so that their British investment adviser, Emlyn Mousley (pictured here), could “ping” the account for proof that the funds existed.

Schacht and Walker said that was the original plan, but eventually Mousley told them that the money actually had to be wired to him. The two men said they thought that was the end of their sure-fire investment and were surprised when Judy readily agreed to the transfer of the million bucks.

While it was soon clear that the promised returns hadn’t materialized, it was many months before Mousley stopped promising to make Judy whole. Eventually, Schacht and Walker said, Mousley told them that Judy’s $1 million had been stolen from him, but their depositions include no details of that alleged theft.

(In the meantime, Schacht lined Judy up with another can’t-miss investment opportunity in Texas. Judy lost another $100,000 in that one.)

Ruined Reputation

Schacht testified that he didn’t know that Judy had put stolen money in their joint account until Arkansas Business started calling him following Judy’s guilty plea in August 2011.

His association with a convicted felon has ruined his reputation and his business, Schacht said under oath.

Google my name once,” he said. “I used to do three or four million dollars a year in business before all of this stuff came down.

“Now I don’t do 100 grand a year, if I’m lucky. … Would you want to trust me with your 16-year-old son and a million dollars to take him racing?”

Keesler, however, concluded “that there is no genuine issue of material fact here for trial.”

The lawsuit “springs from an unlikely partnership formed under an apparently fraudulent scheme that ultimately led to an ill-advised and poorly executed investment.”

The magistrate cited “grave errors in judgment” by both Judy and Schacht, but no support for their claims against each other.

“Arguably, they would not have gotten into this ‘mess’ without each other, but they formed a partnership, proceeded together on shaky ethical ground, and then decided to invest $1 million dollars overseas as advised by Walker and/or Mousely [sic],” Keesler wrote.

“The evidence of record indicates that the damages the parties have suffered were caused by a series of bad decisions they each made, and by individuals who are either unknown, or at least not named parties, in this action.”

Meanwhile, in South Carolina

Judy said she didn’t sue Walker or Mousley because her written agreement was only with Schacht. Walker and Schacht didn’t sue Mousley, presumably because they didn’t personally lose any money with him.

But Mousley is not getting off scot-free.

A federal grand jury in South Carolina charged him in November 2013 with wire fraud and conspiracy to commit wire fraud for “seek[ing] to induce potential investors … to invest in bogus investment programs” with returns that he represented to be “guaranteed and far in excess of normal investment returns.”

Sound familiar?

Although he initially pleaded not guilty and was allowed to return to Great Britain, court records in South Carolina indicate that he has will appear in federal court on Jan. 20, possibly to change his plea.

Mousley’s lawyer, Frank Eppes of Greenville, South Carolina, said the change of plea notation on the court’s docket was routine and did not mean that Mousley had decided to plead guilty. The federal prosecutor in the case, David Stephens, did not return messages seeking comment.

(Update, Jan. 13: Based on court records, the original article said that Mousley was scheduled to change his plea on Jan. 20. But his attorney later informed Arkansas Business that no plea deal had been reached.)

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