Locked Up for Stealing Millions, but Janet Mello’s Fight for Her Pension Gets Hotter!

In a shocking case that has captured national attention, Janet Yamanaka Mello, a former civilian employee for the U.S. Army, was sentenced to 15 years in prison in July 2024. Her crime? Stealing nearly $109 million intended for military families, a betrayal that has left many outraged. But even as she serves time for her offenses, Mello is now fighting to keep her government pension while behind bars, raising further questions about justice and accountability.

Mello, 57, worked as a financial program manager at Joint Base San Antonio-Fort Sam Houston. Her responsibilities included overseeing funds meant to support military children and their families. Instead, starting in 2016, she devised a fraudulent scheme to siphon off millions for personal use. By creating a business called “Child Health and Youth Lifelong Development” (CHYLD), she funneled Army grants into her own accounts.

Court records reveal the extent of her deception. Over six years, Mello secured roughly $108.9 million through 49 fraudulent transactions. She then used the stolen money to purchase luxury items, including houses, cars, jewelry, and even 1,500 pieces of expensive trinkets. Despite this, she failed to report millions of dollars on her tax returns, further deepening her legal troubles.

Now, as Mello serves her 15-year sentence, she’s battling to retain her $4,475 monthly pension, even as federal prosecutors seek to recover the stolen funds. According to a report by the San Antonio Express-News, Mello insists she is entitled to the full pension, which she claims to have “earned” through her years of service. Her attorney, Albert Flores, echoed this sentiment, stating, “She earned it. I don’t see how one thing is related to the other.”

However, federal prosecutors argue otherwise. They have requested that 95% of Mello’s pension be withheld to help repay the government and the families she wronged. They contend that allowing her to keep the pension while incarcerated would be a “legally unjust outcome.”

In defending Mello’s pension, an Army spokesperson cited federal law, explaining that the military does not have the authority to strip her of these benefits. “The command has no authority to impact Ms. Mello’s retirement,” the spokesperson said. Under U.S. law, pensions can only be revoked in cases involving crimes like treason or insurrection, leaving no statutory power to deny benefits for fraud.

But the situation has sparked controversy, with many questioning how Mello could continue receiving benefits after betraying the very institution she served. Prosecutors maintain that the funds she stole were meant to provide essential services for military children, making her actions even more egregious. As U.S. Attorney Jaime Esparza put it, “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.”

The IRS and Department of Justice have also weighed in, calling her lifestyle an obvious red flag. “Mello’s penchant for extravagance is what brought her down. We identified that her reported income was well below the lavish lifestyle she lived,” explained Lucy Tan, Acting Special Agent in Charge of IRS Criminal Investigations. “Financial crimes have victims, and this one took opportunities away from the children and families of our military men and women.”

In addition to prison time, Mello has been ordered to forfeit over 30 real estate properties across five states, 80 vehicles, and millions in cash. Still, prosecutors argue that more restitution is needed to account for the full extent of her theft.

While Mello pleads to retain her pension, the government maintains that she should only keep 5% of it — about $224 per month — for her basic needs while incarcerated. Whether Mello will be allowed to keep her pension or not is still under debate, with a judge’s ruling expected soon.

This case serves as a stark reminder of the far-reaching consequences of financial crimes, particularly those that betray public trust. As Mello’s story continues to unfold, the outcome may have lasting implications for how cases of pension retention are handled in the future, especially in cases of fraud.