Former Army Civilian Sentenced To 15 Years For Stealing $108 Million From Program For Military Families

Janet Yamanaka Mello, a former civilian Army employee who stole over $108 million from a program designed to provide services to military dependents and their families, was sentenced to 180 months in prison.

According to court documents, Mello worked for the U.S. Army at Fort Sam Houston in San Antonio, Texas, as a CYS Financial Program Manager. Part of her job was to determine whether 4-H Military Partnership Grant program funds were available for the various entities that applied.

The 4-H Military Partnership Grant was a program consisting of 4-H, the United States Department of Agriculture (USDA), and the U.S. Army, Child, Youth, and School (CYS) Services, all working together to provide meaningful youth development opportunities for military-connected children. The partnership was funded by the Army, Navy, and Air Force and administered by Kansas State University through 4-H Military Liaisons and land-grant universities in each state.

Allegations

In December 2016, Mello formed a business called Child Health and Youth Lifelong Development (CHYLD
HYLD

YLD
). According to the indictment, CHYLD was not an actual business. It was, prosecutors alleged, formed by Mello solely to receive grant funds from the 4-H Military Partnership Grant program, which she fraudulently secured for CHYLD through her position as a CYS Financial Program Manager.

As part of the scheme, Mello drafted fraudulent memoranda indicating that CHYLD was approved to receive grant funds under the 4-H Military Partnership Grant program and that grant funds were available. She then submitted the paperwork to her supervisor for approval and passed it to the Defense Finance and Accounting Service (DFAS) for payment.

DFAS paid by check mailed to a UPS Store mailbox rented by Mello. Mello would then deposit the check into a bank account she owned and controlled. She went through this process 49 times over six years, requesting approximately $117,000,000 in payments and receiving roughly $108,917,749.

Despite receiving millions, Mello failed to accurately report her income for tax years 2017, 2019, 2020, 2021, and 2022.

For example, according to court documents, in 2017, despite receiving nearly $18 million in fraudulently procured funds, Mello claimed business income of $483 on her tax return—she also falsely claimed to be a “Training consultant.” In subsequent years, she claimed no business income at all.

On February 28, 2024, Mello pleaded guilty to ten counts, including five counts of mail fraud and five counts of filing a false tax return.

Spoils

According to court documents, Mello and her husband bought at least thirty-one pieces of real estate across the country. The government estimated the value of the Mellos’ real estate portfolio at $23 million. In addition to building a multi-million-dollar property in the San Antonio area, the Mellos purchased multi-million-dollar properties in Denver, Colorado, Preston, Maryland, and Canyon Lake, Texas.

During the scheme, the Mellos purchased a fleet of at least 82 vehicles, including cars, SUVs, motorcycles, and one motorhome—all totaling approximately $3.5 million. Notable vehicles included a 1955 Ferrari Fratelli 165 Racer, a 1953 Maserati 125 GT
GT
Racer, a 1954 Chevrolet Corvette, and a 2018 Maserati Gran Turismo. When agents executed the search warrant at the Mellos’ home in August 2023, they found many vehicles with dead batteries because they had not been operated in a significant amount of time.

In addition to real estate and vehicles, Mello spent millions on high-end jewelry. According to the feds, on December 4, 2022 alone, Mello spent over $923,000 on jewelry.

Sentencing

Mello was sentenced to 180 months—180 months for mail fraud and 36 months for filing a false tax return. The sentence will run concurrently with credit for time served—that means that instead of serving each sentence one after another, Mello will serve all of her sentences at the same time (for at least as long as the longest sentence).

The government had been seeking 235 months, an upward variance from the guideline range.

Mello must also make restitution of nearly $141 million. Of that, approximately $109 million is owed to the U.S. Army, and the almost $32 million remaining is owed to the IRS.

Finally, Mello was also ordered to forfeit her jewelry, a safe, and personal property seized from her home, as well as $90,783,942.47, which is the amount considered obtained directly or indirectly as a result of the crimes.

Comments

“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 for the Western District of Texas. “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. Her actions reflect exactly the opposite of what it means to serve your country, and my office will continue to work tirelessly to prosecute those who illegally seek personal gain at the expense of their fellow citizens.”

“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,” said Special Agent in Charge Maria Thomas for the Department of the Army Criminal Investigation Division (Army CID), Central Texas Field Office. “The Army community, and the public, can rest assured that we remain committed to aggressively pursuing anyone that uses government programs for their own personal gain.”

“Mello’s penchant for extravagance is what brought her down. We identified that her reported income was well below the lavish lifestyle she lived. As we uncovered the details, the criminal scheme grew, the dollar amount grew, and the reach of her spending grew,” said Acting Special Agent in Charge Lucy Tan of IRS Criminal Investigation’s (CI) Houston Field Office. “Financial crimes have victims, and this one took opportunities away from the children and families of our military men and women.”

CI and Army CID investigated the case.

Postscript

A quick postscript to the story: Shortly after sentencing, the court considered and granted the government’s motion to dispose of three feral longhorn cattle who were living on property owned by Mello. According to the government, the health of the cattle—named Bert, Ernie, and Little Red—was in jeopardy. The court ruled that the cattle could be donated to Tonya Evans, who owns and operates Evans Ranch in Kennedy, Texas, or to any other rescue group, local ranch, or agency that will care for them.