Woman who stole almost $109 million from Army to buy mansions, jewelry and cars sentenced to prison

CBS News ^ | JULY 24, 2024 | Emily Mae Czachor

[Red Badger]

A woman has been sentenced to 15 years in federal prison for stealing more than $100 million from a grant program meant to support military children and families, authorities said.

Janet Yamanaka Mello, 57, 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, according to the U.S. Attorney's Office for the Western District of Texas.

Mello worked as a financial manager for the Army Morale, Welfare, and Recreation program at Fort Sam Houston in San Antonio, specifically focusing on child and youth services, the U.S. Attorney's Office said in a news release.

She formed a business in December 2016 called Child Health and Youth Lifelong Development that was essentially used as a front for the scam. Collecting funding through a military grant initiative was the businesses' sole purpose, and Mello was able to fraudulently collect millions through it because of her position in the Army.

Instead of using the grant money given to her business to provide the youth and family services that Child Health and Youth Lifelong Development 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, prosecutors said.

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

Prosecutors said Janet Mello used millions of dollars in military grants to purchase luxury items, including a Ferrari motorcycle. DEPARTMENT OF JUSTICE/CBS AUSTIN

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

"Janet Mello betrayed the trust of the government agency she served and repeatedly lied in an effort to enrich herself," said U.S. Attorney Jaime Esparza in a statement. "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."

Esparza said his office "will continue to work tirelessly to prosecute those who illegally seek personal gain at the expense of their fellow citizens."

Defense attorney Albert Flores told the Associated Press that Mello was deeply remorseful.

"She realizes she committed a crime, she did wrong and is very ashamed," Flores said. He also told AP that Mello saved many of the items she bought with the stolen funds and hopes they are resold to reimburse the government. Flores said the defense does not intend to appeal the court's decision, according to AP.

[maddog55]

$109 million in defense is a rounding error which in itself is a problem.

[Maine Mariner]

Few if any. I would hazard a guess that other people were involved in this fraud, one way or another.

[xp38]

part of the trillions the DOD seems to have lost track of

[crusty old prospector]

How much did we get back?

[frank ballenger]

Should have learned from Richard Pryor’s Superman III character and not bought millions of dollars of ostentatious items.

[Trump Girl Kit Cat]

OMG one hundred and nine MILLION and for 6 years she got away with it, the government is OUT OF CONTROL the damn beast needs to be shrunk on a massive scale!!!