Senator Chuck Grassley of Iowa has criticized the Defense Department for its “sloppy accounting” after Army employee Janet Mello withdrew $109 million from a military fund.
The 90-year-old Republican criticized the department for being “full of slow learners and fast spenders” after the unraveling of the one of the biggest fraud cases the army has ever seen.
Civilian worker Mello, 57, of San Antonio, Texas, faces a maximum prison sentence of 125 years after admitting to stealing nearly $109 million from a tax fund.
Mello laundered money intended for the children of army personnel and used it to finance her own extravagant lifestyle – including the purchase of designer clothes, jewellery, 31 houses and as many as 70 vehicles.
The scammer worked for the U.S. Army at Fort Sam Houston in San Antonio as financial program manager of CYS and created a shell company, Child Health and Youth Lifelong Development, in 2016.
Iowa Senator Chuck Grassley (pictured) has criticized the Defense Department for its “sloppy accounting” after Army employee Janet Mello withdrew $109 million from a military fund
Civilian worker Janet Mello, 57, of San Antonio, Texas, faces a maximum prison sentence of 125 years after admitting to stealing nearly $109 million from a tax fund
Mello’s $3.1 million property in Preston, Maryland. She regularly filed fraudulent paperwork and deposited grants into her fake company a total of 40 times over a six-year period, securing more than $100,000,000 for herself, court documents allege.
HThe plan failed in January when IRS investigators worked with Army investigators as they put the pieces of the puzzle together, and Mello was criminally charged in December 2023.
“The DoD’s sloppy accounting allowed an Army employee to steal 100 MILLION taxpayer dollars,” Grassley wrote on X.
‘That’s a great shame. Four taxpayers not two mention national security. I warned the Department of Defense about this EXACT problem 25 years ago.
“Since the Department of Defense is full of slow learners and quick spenders, I sent them a letter to remind them to clean up their books.”
“In 1998, I released a report examining how the DoD tracks incoming and outgoing $$,” he added.
“The report made clear that DoD’s internal controls are virtually non-existent, meaning you have to conduct manual oversight or fraud will occur.
“The wolves come out when the herdsmen of taxpayer$$ fall asleep.”
Grassley is also pushing a bill that would force the Pentagon to implement a full independent audit of the military’s finances and penalize any part of the Defense Department that falls short of a certain level by cutting its budget by 1 percent.
The veteran senator also sent letters to Defense Department bosses asking for their cooperation in his office’s investigation of the Army and the Defense Finance and Accounting Service (DFAS) to explain how Mello’s plan came to pass.
His letters were addressed to Army Secretary Christine A. Wormuth and DFAS Director Audrey Y. Davis.
“Allowing $103.3 million of valuable taxpayer money to flow freely into Mello’s personal coffers does not qualify as a ‘misstep,'” Grassley wrote in his letter to Wormuth.
“It is an unacceptable breach of internal controls and vigilant oversight.
‘Those responsible must be held accountable. Because internal controls are weak or non-existent, it is the duty of every manager and supervisor to be vigilant and watch for warning signs or irregularities.
“From my perspective, the size of the payments to Mello’s fake company sticks out like a pine tree.”
Mello worked for the U.S. Army at Fort Sam Houston in San Antonio, as a CYS financial program manager, where she was reportedly able to transfer funds to her shell company
This is Mello’s $2.3 million estate in Castle Rock, Colorado
This house was listed as one of the properties that had to be seized. It cost Mello $1.1 million and is located in San Antonio, Texas
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 defrauded money.
One of the sprawling mansions that drew attention to Mello was this eight-bedroom, 16-bathroom home in Preston, Maryland — when the IRS began wondering how she could make such lavish purchases on a $130,000 salary.
A 2023 Land Rover Range Rover (file image). Transaction records show she reportedly transferred $264,874 from the account last year to buy the Land Rover Range Rover for herself
Mello was seen leaving the federal courthouse in San Antonio with her husband Mark after appearing before Magistrate Judge Richard Farrer earlier this month.
She pleaded guilty to five counts of mail fraud and five counts of filing fraudulent tax returns.
Mello, through a series of yes-or-no questions, admitted to taking advantage of the military’s lax controls at the Installation Management Command to siphon off the $108 million for a bogus company she called CHYLD (Child Health and Youth Lifelong Development ) mentioned.
Albert Flores, Mello’s attorney, said after the hearing that this is the beginning of Mello taking responsibility for what she did.
“Today was the beginning of the long process in which she pleaded guilty,” Flores said the San Antonio Express.
“She accepts responsibility for her actions. She deeply regrets what she did.”
Flores added that Mello is working with the government to recover as much of the stolen property as possible.
“Ultimately, we expect there will be a large number of assets, both in number and monetary value, that will be recovered by the U.S. government,” he predicted.
Mello will be sentenced May 29 before District Judge Xavier Rodriguez. She remains free on bail pending sentencing.