DOJ: Texas Woman Defrauded U.S. Army of $100 Million with Fake Business

A Texas woman may wind up with a 142-year prison sentence after investigators say she defrauded the U.S. Army out of $100 million.

Janet Yamanaka Mello, 57, was a civilian financial program manager at Fort Sam Houston when she allegedly devised a plan in 2016 to create a business called “Child Health and Youth Lifelong Development” in order to siphon funds she received from the Army, reported the San Antonio Express-News. 

“Mello allegedly stole more than $100 million in Army funds by regularly submitting fraudulent paperwork that indicated an entity she controlled was entitled to receive funds from the Army,” according to a December press release from the Department of Justice (DOJ).

According to federal prosecutors, Mello claimed that her business, known as “CHYLD,” “provided services to military members and their families, when, in reality, CHYLD did not provide any services.”

The indictment alleges that the suspected fraudster instead used her millions of dollars to purchase expensive jewelry, clothing, vehicles, and real estate. 

“Additionally, Mello is alleged to have falsified the digital signature of one of her supervisors on multiple occasions,” DOJ officials wrote.

It is believed that Mello used the stolen money to purchase over 30 homes and several luxury cars over the course of the seven-year-long scheme. 

The Internal Revenue Service (IRS) became suspicious of Mello’s business when she included it on her personal tax returns in 2017, reporting a profit of $483 on a $2,152 revenue, the outlet said.

2017 was the last year she filed tax returns for CHYLD. 

“Mello, who earned $129,996 in 2022, purchased 31 different real estate properties in Colorado, Maryland, New Mexico, Texas, and Washington,” the New York Post reported, listing out properties including a $3.1 million eight-bed 12-bath mansion in Maryland “with 55 garage spaces on 58 acres.”

Another lavish piece of real estate she purchased was a $2.3 million home in Colorado sitting on 35 acres.

Investigators also found that Mello bought 78 vehicles with her riches, including a fleet of 16 Harley-Davidson motorcycles, five Triumphs, four Ducatis, two BMWs, and a 1955 Ferrari Fratelli 165 Racer.

Her magnificent cars included a 2018 Maserati GranTurismo, a 1954 Chevrolet Corvette, a 1966 Ford Mustang, five Mercedes-Benzes, and two Aston Martins, reported the Messenger.

Upon uncovering the alleged crimes, authorities seized over $18 million in cash from six separate accounts linked to the suspect.

Mello was arrested in December and was hit 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.

Despite the hefty charges, Mello was released without bail and now the U.S. District Court for the Western District of Texas “awaits a January 19 deadline on whether Mello strikes a plea deal or faces a jury selection and trial on February 12,” according to the Post. 

Mello faces a maximum sentence of 142 years in prison if found guilty. 

Assistant U.S. Attorneys Justin Simmons and Antonio Franco are prosecuting the case, the DOJ added.