The former business manager at a prominent religious private school in Tampa has been sentenced to federal prison for committing bank and wire fraud for stealing tuition money from the school and lying to get a mortgage.
James John Melis, 54, of Largo, was sentenced July 14 by U.S. District Judge Kathryn K. Mizelle to serve five years and four months in prison and to pay $1.12 million — $439,177 of which is to be forfeited and $684,000 in restitution. When released, he will be under supervised release for five years, according to a statement.
While prosecutors have not publicly disclosed the name of the school where Melis worked, a sentencing memorandum pleading for a reduced jail time filed by his attorney identifies it as Hillel Academy, a private Jewish school in Tampa. In an email to the Business Observer, Allison Oakes, the head of school, confirmed the information in the court filing and wrote that Hillel spoke to families when the fraud first happened, and has since "put this far behind us. This is not even a blip on anyone's radar screen." She requested that the Business Observer not name the school.
Melis, indicted and arrested in September, pleaded guilty March 20 to one count each of bank fraud and of wire fraud, avoiding what could have been a lengthy prison sentence that could have kept him incarcerated into his 80s.
He had originally been charged with four counts of wire fraud, two counts of bank fraud and three counts of aggravated identity theft. If he had been convicted on all those counts, he would have faced 20 years in federal prison for each wire fraud count, 30 years for each bank fraud count and a consecutive mandatory penalty of two years for the aggravated identity theft counts.
The other counts were dismissed as part of the plea agreement.
Melis is married and has an 11-year-old son. The memorandum filed by his attorney says his wife’s battle with cancer and a subsequent job loss coupled with a “desire to provide a lifestyle to which his wife and son had become accustomed … significantly contributed” to his crimes.
According to the indictment, prosecutors say in his role at the school he had access to a PayPal account that parents used to make tuition payments. Using that access, he added his personal credit union account to the list of accounts authorized to receive money forwarded from PayPal.
Prosecutors allege in the indictment that between about March 2017 and February 2018 he would “email parents whose students attended (the school) and advise that tuition payments were due and to send the tuition payments to” the PayPal account. Once the money was in, he’d transfer it to his personal account.
Melis allegedly used the money to fund vacations, jewelry and other luxury items, according to the indictment.
According to the sentencing memorandum, Melis was confronted by school official June 19, 2018 and confessed, admitting to taking $188,014.22.
“Rather than report Mr. Melis’s embezzlement to law enforcement,” the memorandum says, “Mr. Melis and his former employer entered an agreement in which Mr. Melis would execute a $200,000 mortgage secured by Mr. Melis’s primary residence. … Mr. Melis would obtain a cash out loan on the property and repay his former employer for the funds he embezzled plus costs and expenses.”
Prosecutors, while not discussing the agreement between Hillel and Melis, say that in July 2018 he began working on a “mortgage origination fraud scheme against a financial institution for two properties he owned.”
In the indictment, prosecutors allege Melis used another person’s personal identification information to apply for the loans and then submitted fake tax returns, paperwork falsely showing previous mortgages had been paid off and fake leases showing “substantial” rental income. He’s also alleged to have provided checks showing purported payments to the IRS from his personal bank accounts “when in fact such accounts had already been closed.”
The indictment says he got $438,200 for a house in Largo and $684,000 for a house in Sag Harbor, New York.
According to a transcript of the sentencing hearing, Melis was remanded to the custody of the U.S. Marshal Service as he waits to find out where he will serve his time. Mizelle recommended he be jailed “at an appropriate medical facility.”
In the sentencing memorandum, Melis’ attorney writes that Melis suffers from Kartagener’s syndrome, a rare disease that, according to the National Institute of Health, leads to recurrent chest infections, ear/nose/throat symptoms and infertility. Melis and his brother, according to the filing, both suffer from the syndrome which has their “heart, lungs, liver, kidneys, and other organs on the opposite side of their bodies, and both have battled potentially life-threatening infections throughout their lifetimes.”