Woman who stole over $100M from the Army scamming families sentenced to 15 years

SAN ANTONIO, TX - Authorities have announced that 57-year-old Janet Yamanaka Mello has been sentenced to 15 years in federal prison for stealing more than $100 million from a grant program that was meant to support military children and families.

According to CBS News, Mello was convicted on five counts of mail fraud in addition to five counts of filing a false tax return for the convoluted scheme, which she carried out over the course of six years while employed by the United States Army. In a news release, the U.S. Attorney's Office said that Mello worked as a financial manager for the Army Morale, Welfare, and Recreation program at Fort Sam Houston in San Antonio, specifically focused on child and youth services. 

Mello formed a business that she called Child Health and Youth Lifelong Development (CHYLD). The sole purpose of the CHYLD was to receive grant funds from the 4-H Military Partnership Grant program, which Mello fraudulently secured by way of her position as a CYS financial program manager.

The CHYLD was formed in December of 2016 and was essentially used as a front for the scam. According to the U.S. Attorney's Office for the Western District of Texas, Mello was able to fraudulently collect millions through it because of her position with the Army. 

Prosecutors said that instead of using the grant money given to her business to provide the youth and family services that CHYLD claimed to offer, Mello would deposit grant checks into her own personal bank account and spend the money on various luxuries, including clothing, vehicles, and real estate.

Mello allegedly used the grant money to buy lavish properties and 82 vehicles, including a Maserati, a Mercedes, a 1954 Corvette, and a Ferrari Fratelli motorcycle. In one instance, she used the funds to purchase $923,000 of jewelry in a single day back in 2022. 

Authorities said that in 49 individual instances of fraud over the six-year-period where her business was in operation, Mello requested $117 million in grant payments during that period and received close to $109 million. To cover up the scam, she falsely reported her income for the tax years 2017, 2019, 2020, 2021, and 2022. 

In a statement, U.S. Attorney Jaime Esparza said, "Janet Mello betrayed the trust of the government agency she served and repeatedly lied in an effort to enrich herself. Rather than $109 million in federal funds going to the care of military children throughout the world, she selfishly stole that money to buy extravagant houses, more than 80 vehicles, and over 1,500 pieces of jewelry."

Defense attorney Albert Flores said that his client, Mello was deeply remorseful. He said, "She realizes she committed a crime. She did wrong and is very ashamed." He said that Mello saved many of the items she bought with the stolen money and hopes that they can be resold to reimburse the government. Flores said that the defense does not intend to appeal the court's decision.

Esparza said his office will "continue to work tirelessly to prosecute those who illegally seek personal gain at the expense of their fellow citizens." Special Agent in Charge Maria Thomas for the Department of the Army Criminal Investigation Division, Central Texas Field Office said, "Corruption and fraud in U.S. Army programs jeopardize the safety and security of our Soldiers and their families. When discovered, fraudulent activities by Army employees will not be tolerated and those involved will be brought to justice."

Acting Special Agent in Charge Lucy Tan of IRS Criminal Investigation's Houston Field Office said, "Financial crimes have victims and this one took opportunities away from the children and families of our military men and women."