Texas woman who allegedly stole $103 million from Army got to retire with full benefits

A 57-year-old San Antonio woman allegedly stole over $103 million from from the U.S. Army by regularly drawing funds via a fake children's development entity that she controlled. Janet Yamanaka Mello reportedly blew the funds on herself, buying 80 high-end vehicles, 100 head of cattle, 31 homes, and various luxury items.

Although Mello was indicted last month and slapped with 10 charges related to the alleged fraud scheme, she was permitted to retire with full benefits from the Army.

The con

Mello, a native of Guam, worked as a civilian Army employee at Joint Base San Antonio-Fort Sam Houston where she supposedly helped administer the 4-H initiative via the Army's Child and Youth Services Division, according to court documents.

Sidelong to her work for the Army, she created a shell company called Child Health and Youth Lifelong Development in 2016. She included CHYLD in her 2017 personal tax forms, indicating she earned a profit of $483 on a revenue of $2,152 for training consultations, reported the San Antonio Express-News.

Court documents indicate that Mello "used her knowledge of funding procedures and her ability to approve the distribution of funds to various entities to direct funds from CYS program fund accounts to be paid to CHYLD, an entity MELLO formed and controlled. Without disclosing the fact that she owned and controlled CHYLD, MELLO approved the payment of government funds to CHYLD."

The Defense Finance and Accounting Service reportedly sent over 40 payments to Mello's outfit over the course of the alleged scam. Mello allegedly spread the ill-gotten gains through various bank accounts she controlled, failing to report any of this income on her tax returns for tax years 2017 through 2022.

While Mello claimed that CHYLD provided 4-H services to military personnel and their families, the Department of Justice indicated the company did not provide any services. Instead, Mello has been accused of using over $103 million on "high-end retail goods, jewelry, luxury automobiles, air travel, and high-end real estate throughout the country."

ArmyTimes reported that Mello's purchases included a roughly $3.1 million, eight-bedroom, 55-car garage 58-acre estate in Maryland as well as a $1.1 million home in San Antonio.

Mello allegedly managed to buy a fleet of vehicles, including a 1967 Chevrolet Camaro SS, a '66 Chevrolet Chevelle SS, a '66 Ford Mustang, a '54 Chevrolet Corvette, a 1935 Plymouth Sedan, and various cars that usually run upward of $100,000 to $200,000.

Extra to cars and mansions, Mello allegedly bought various luxury condos, spent $24.3 million on "retail," took trips around the globe, and purchased 100 head of cattle.

Caught

The Express-News indicated that upon noticing a discrepancy between Mello's multimillionaire lifestyle and what would otherwise be affordable on her under $130,000 annual salary, the IRS began digging. The agency soon launched a criminal probe in concert with Army investigators, resulting in her December indictment.

Mello was arrested in December and charged with five counts of mail fraud, four counts of engaging in a monetary transaction over $10,000 using criminally derived proceeds, and one count of aggravated identity theft, according to the DOJ.

Mello was charged with identity theft because Mello allegedly forged her supervisor's digital signature, reported the Express-News. She also appears to have invented a "financial analyst/reimbursable coordinator" named Kathy Johnson to lend greater credibility to the alleged fraud scheme.

The alleged con-woman faces a maximum of 20 years in prison for each fraud charge, up to 10 years in prison for each spending statute charge, and a mandatory minimum of two years in prison for the identity theft charge.

Cushy retirement, notwithstanding

Despite allegedly ripping off the Army and squandering taxpayer money for her own amusement, Mello was allowed to retire with full benefits.

A spokeswoman for the Army's Installation Management Command told the Express-News that Mello was permitted to retire during the investigation into her alleged fraud scheme.

"The command has no authority to impact Ms. Mello's retirement," said the spokeswoman. "In accordance with 5 U.S. Code Section 8312, an individual may be denied an annuity or retired pay on the basis of the service of the individual, if the individual is convicted of treason, rebellion or insurrection, or other similar offenses. There is no similar statutory authority for denying retired pay based on a conviction of other offenses."

Albert Flores defended Mello's decision to retire and collect additional benefits from the taxpayer, claiming, "She earned it."

"I don't see how one thing is related to the other," added Flores.

Although Mello pleaded not guilty in December, her lawyer indicated Mello has blown and or possessed the stolen assets.

"We expect a large portion of the assets will be recovered," said Flores. "In other words, a lot of the money was spent on tangible assets that the government can (recoup) — real estate, cash, vehicles, properties, things of that nature. We're being very cooperative in anything we can to turn that over."

The DOJ is now working to seize 31 parcels of land Mello acquired in various states along with cash and 78 personal cars, trucks, and motorcycles.

The U.S. District Court for the Western District of Texas reportedly is awaiting a decision on whether the alleged fraudster will strike a plea deal or go to trial.

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