US: Federal prison for ex-Army worker who embezzled $109mn from military child grant programme

A woman in the US has been sentenced to 15 years in federal prison for embezzling over $100 million from a grant programme designed to aid military children and families, officials announced.

Janet Yamanaka Mello, 57, was found guilty of five counts of mail fraud and five counts of filing false tax returns for a complex scheme she executed over six years while working for the United States Army, stated the US Attorney's Office for the Western District of Texas.

Mello served as a financial manager for the Army Morale, Welfare, and Recreation programme at Fort Sam Houston in San Antonio, focusing on child and youth services, according to a news release from the U.S. Attorney's Office.

In December 2016, she created a company named Child Health and Youth Lifelong Development, which served as a facade for her fraudulent activities.

The company's only goal was to obtain funding through a military grant programme. Leveraging her Army position, Mello successfully swindled millions through this scheme.

According to prosecutors, rather than using the grant money for youth and family services as claimed by Child Health and Youth Lifelong Development, Mello diverted the funds into her personal bank account and splurged on luxuries such as clothing, vehicles, and real estate.

The Associated Press reported that Mello allegedly purchased luxury properties and 82 vehicles, including a Maserati, a Mercedes, a 1954 Corvette, and a Ferrari Fratelli motorcycle. In one instance, she spent $923,000 on jewellery in a single day in 2022.

Over the six years her business was active, authorities reported that Mello committed fraud in 49 separate cases, requesting $117 million in grants and obtaining nearly $109 million. To conceal the fraud, she also misreported 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 US 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 jewellery," Esparza said.

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

Defence 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.

(With inputs from agencies)