A millionaire con artist accused of defrauding the US Army of $100 million has been allowed to retire with full benefits – despite being under criminal investigation.
Janet Yamanaka Mello claimed she “earned” her civil service pension despite allegedly wasting stacks of stolen money on 80 supercars and 31 houses.
The military admitted there was nothing it could do to take it away from her because she was protected by a federal law that was held up in government bureaucracy.
The 57-year-old from San Antonio, who was not in prison before her trial, is accused of a mammoth six-year fraud that she kept secret from Army brass.
She allegedly set up a shell company in 2016 to hoard huge sums of money destined for military youth programs across the country.
But Mello eventually became upset when IRS agents began digging into her finances and finding out how she afforded luxury homes, vacations and supercars.
Janet Yamanaka Mello, 57, was able to retire from her civil service job with full benefits during the investigation into her shell company
Mello, 57, (right, left her attorney Albert Flores) is accused of stealing military funds and spending millions of dollars on jewelry, clothing, luxury vehicles and real estate in one of the largest fraud cases the Army has ever dealt with
Mello's $3.1 million estate in Preston, Maryland. She regularly submitted fraudulent documents over a six-year period and made contributions to her sham business a total of 40 times, securing over $100,000,000, according to court documents
An Army spokesman said: “The command has no authority to influence Ms. Mello’s retirement.”
While there are exceptions for treason and major crimes, “there is no comparable statutory authority for the denial of retirement benefits based on conviction for other crimes,” she added.
Albert Flores, Mello's attorney, told the San Antonio Express-News that his client “deserved it,” referring to her retirement savings.
“I don’t see any connection between one and the other,” he said of the research’s impact on those benefits.
Mello worked as a civilian finance manager at Joint Base San Antonio-Fort Sam Houston and most recently earned $130,000 a year.
Her retirement is covered by the Federal Employee Retirement Service (FERS), which provides her with a basic retirement plan, Social Security, and a savings plan.
The base benefit plan takes into account an employee's number of years of service, their “top three” years of salary, and a one percent multiplier.
Social security for FERS employees is comparable to that of a private sector worker and amounts to a contribution rate of 6.2 percent.
The savings plan works similarly to a 401k plan, with a deduction of one percent of the base salary and the optional contributions that the employee chooses to make themselves.
Their benefits underscore the protection of public sector workers, whose private sector counterparts are three times more likely to be fired, according to the Bureau of Labor Statistics.
Flores added that he believes his client's case is on the way to a quick resolution, saying they have been “very cooperative” in turning over Mello's various assets.
According to federal court documents, Mello also owned a 2018 Maserati Granturism (file photo). It was named as one of the assets they are trying to seize
According to federal prosecutors, Mello used part of the $100 million she siphoned from the U.S. Army to buy a Land Rover Range Rover for $250,000
He added that it would also likely sell some properties such as livestock to compensate the government.
Aside from allegedly funneling Army funds into a defunct company she founded, Mello is also accused of forging her boss's signature on paperwork that allowed her to transfer the money without anyone questioned this.
The public prosecutor's office assumes that she was able to maintain the crime in this way for six years.
Mello's damning federal indictment alleges that she used the digital signature “SK” – which was not her own – on several signatures while working as a CYS financial program manager at Fort Sam Houston in Texas.
“SK” refers to CYS program chief Suzanne King, who was Mello's boss, Express-News reports.
King served as chief of the G-9 Family and Morale, Welfare and Recreation Branch of the U.S. Army Installation Management Command for at least four years.
Mello used King's signature as recently as August 29 of last year to divert federal funds into her own shell company, CHYLD, prosecutors allege.
As a result, questions have been raised as to how the Army official was able to steal over $100 million in a relatively short period of time without any control.
Assistant U.S. Attorney Justin Simmons said the Army did not conduct an audit of the program, while others familiar with the investigation say the Army only operated on the assumption of the goodwill of its employees.
A source familiar with the investigation told the Express-News of Army leaders, “They assigned the trial to just one person.”
“They gave her complete carte blanche and she found all the loopholes.”
Mello's damning federal indictment alleged that she used the digital signature “SK,” which refers to CYS program leader Suzanne King (pictured), who was Mello's boss
Mello also owns a 2003 Aston Martin Vanquish (file photo)
Sources said Mello was given more autonomy in her position and the army had eased some administrative restrictions as part of an “organizational restructuring.”
An insider told the local newspaper: “This shows the laxity of the command and the lack of internal controls.”
Former federal prosecutor Robert Almonte Jr. said that government programs are not “equipped to monitor these things” and that Mello's alleged plan was “nothing particularly complex” and that she was also “discreet on her part.”
Almonte told the newspaper: “In some fraud cases they at least take steps to ensure that their fraud remains secret.” “There was no obvious attempt to hide after the fact what she did with the money.”
Mike Lemoine, a former IRS criminal investigator, said Mello was essentially “hiding out in the open.”
Since Mello's alleged fraud came to light in December, job advertisements have been put out to find her successor.
Fort Sam Houston is seeking a new CYS Financial Program Manager with a salary of $118,000 to $138,000 per year.
This is one of the largest fraud cases the military has ever dealt with.
In 2016, Mello allegedly created a shell company, Child Health and Youth Lifelong Development, which she fraudulently used to collect money from the 4-H Military Partnership grant.
Mello also owns this $870,000 home in Lakewood, Colorado. Mello had amassed a portfolio of homes in Texas, Maryland, Colorado, Washington and New Mexico – all of which, prosecutors allege, she bought with the stolen money.
This is Mello's $2.3 million estate in Castle Rock, Colorado
The company that was supposed to help the children of military personnel allegedly never did so. Instead, she received dozens of cash grants for six years – without any audit.
Nearly 80 vehicles and 31 properties in five states belonging to Mello are up for seizure – federal prosecutors allege she lived a life of luxury and opulence that clearly wasn't covered by her $130,000 a year government salary.
She reported that in 2017, her company CHYLD made a profit of $483 on training consulting sales of $2,152. However, she has not filed tax returns since then.
She regularly submitted fraudulent paperwork — and paid grants into her sham business 40 times, securing over $100,000,000, according to documents.
Transaction details show she allegedly wired $264,874 from the account last year to purchase a 2023 Land Rover Range Rover.
She also sent herself $3,308,157 to purchase a property in Canyon Lake, Texas, the documents say.
The court listed a total of 78 luxury cars and motorcycles that Mello owns – and demanded the assets in a foreclosure deed. These include numerous Maseratis, Ferraris, Aston Martins, Mercedes, Teslas, Harley-Davidsons and Land Rovers.
Her collection, which has been ordered confiscated, includes a 1955 Ferrari Fratelli (file photo).
This home was listed as one of the properties to be seized. It cost Mello $1.1 million and is located in San Antonio, Texas
A 1935 Plymouth sedan that Mello owned (file photo)
In addition to vehicle assets, they have named 31 of their properties. These span multiple states – with mansions valued at over $3 million, ranches, sprawling acres of farmland, and luxury high-rise apartments and condos.
Mello had amassed a portfolio of homes in Texas, Maryland, Colorado, Washington and New Mexico – which prosecutors allege she bought with the stolen money.
The documents also state that Mello owned six bank accounts and had at least $32,000 in each of them.
The IRS pointed out that her lifestyle – buying millions of dollars of homes several times a year – was not covered by her salary.
Her criminal investigation team worked with Army investigators to put the pieces of the puzzle together – before Mello was criminally charged in December 2023.
On December 6, the U.S. Attorney's Office in the Western District of Texas announced that a federal grand jury in San Antonio had indicted Mello on 10 counts.
The statement said: “Mello claimed that CHYLD provided services to military members and their families, when in fact CHYLD did not provide any services.”
“The indictment alleges that Mello instead used the funds to purchase millions of dollars worth of jewelry, clothing, vehicles and real estate. In addition, Mello is said to have forged the digital signature of one of her superiors on several occasions.
Mello is charged with five counts of mail fraud, four counts of engaging in a monetary transaction over $10,000 with proceeds of crime and one count of aggravated identity theft.
The San Antonio woman faces up to 20 years in prison for each fraud charge, 10 years for each expense alteration charge and a mandatory minimum two years in prison for the aggravated identity theft charge.