A Kent, Washington, woman was sentenced on Mar. 17 in U.S. District Court in Seattle to 17 months in prison for a fraud scheme that stole more than $1 million from Veterans Administration programs, according to First Assistant U.S. Attorney Charles Neil Floyd. Kelly M. Lee-Carroll, age 58, recruited her sister and son to help defraud the Veterans Administration by falsely claiming she was severely disabled and needed round-the-clock care.
The case highlights concerns about misuse of benefits intended for veterans with serious disabilities. Authorities said Lee-Carroll claimed she could not walk or care for herself but was able to travel on vacations and purchase a second home while collecting benefits meant for the most disabled veterans.
At sentencing, U.S. District Judge James L. Robart said, “Ms. Lee-Carroll broke the trust she had with her fellow veterans. It was intentional and it went on for an extended period of time.” Floyd also commented on the impact of the crime: “As a veteran, I find this type of fraud against our programs despicable,” he said. “These benefits to pay for care, and for caregivers, need to be carefully utilized so that they serve veterans as intended. They should not go for second homes, cars, exotic trips, or casino gambling as they did in this case. This defendant not only pays the price for her conduct, she roped in her family members who now have felony convictions.”
Special Agent in Charge Dimitriana Nikolov with the Department of Veterans Affairs Office of Inspector General Northwest Field Office said: “This sentence sends a clear message that individuals who steal VA benefits will be held accountable.” Nikolov added that the office will continue efforts to eliminate fraud from benefit programs.
Court records show that between July 2012 and October 2024, Lee-Carroll claimed she was bedridden with paralysis and needed full-time care but was found capable of walking and using both hands without assistance outside her home. She designated her sister and son as caregivers so they would receive payments from the VA while working other jobs or during times when Lee-Carroll traveled alone domestically and internationally.
The scheme resulted in more than $1.1 million being stolen from VA funds; Lee-Carroll was ordered to pay $932,142 in restitution. Her son Robert H. Nelson III received a 14-month federal prison sentence last November along with an order to pay $282,698 restitution; her sister Katoya F. Grant received a time-served sentence plus six months supervised release and must pay $293,787 restitution.
Lee-Carroll served briefly in the Army before joining the Army Reserves from 1986-1994 and began receiving caregiver funding after claiming disability in 2012; prosecutors acknowledged some eligibility but not at levels exceeding $11,000 per month.
All three defendants pleaded guilty to conspiracy to commit theft of government property and health care fraud charges.
