Kent, Washington, woman sentenced to prison for defrauding VA programs designed to help severely disabled veterans

Seattle - A Kent, Washington, woman was sentenced today in U.S. District Court in Seattle to 17 months in prison for her long-lasting fraud scheme that stole more than $1 million in benefits from the Veterans Administration, announced First Assistant U.S. Attorney Charles Neil Floyd. Kelly M. Lee-Carroll, 58, recruited her sister and her son to the scheme to defraud Veterans Administration health care and disability benefits. Lee-Carroll claimed she was unable to walk or care for herself and needed round-the-clock care. In fact, Lee-Carrol was able to walk. She traveled on exotic vacations and purchased a second home in Las Vegas all while collecting benefits intended for the most disabled veterans. At the sentencing hearing 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."

"As a veteran, I find this type of fraud against our programs despicable," said First Assistant U.S. Attorney Neil Floyd. "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."

"This sentence sends a clear message that individuals who steal VA benefits will be held accountable," said Special Agent in Charge Dimitriana Nikolov with the Department of Veterans Affairs Office of the Inspector General Northwest Field Office. "The VA OIG will continue to identify and eliminate fraud by seeking prosecution of those who swindle VA benefit programs that are intended to help veterans, their families, and caregivers. We thank the U.S. Attorney's Office for their efforts in this investigation."

According to records filed in the case, between July 2012 and October 2024, Lee-Carroll claimed to be disabled to such a degree that she needed full time care for daily living. She claimed to be bedridden with paralysis in one leg and arm. She repeatedly represented that she needed a wheelchair to leave home. The investigation revealed that Lee-Carroll did not require the use of a wheelchair outside her home and that she had use of both hands.

Lee-Carroll designated her sister and son as her caregivers so that the VA would pay them for the hours they claimed they cared for Lee-Carroll. Her sister and son claimed to be caring for Lee-Carroll while they were clocked in at other jobs such as driving a truck or working as an administrative assistant. On some of the occasions that they claimed to be caring for Lee-Carroll, she was traveling to Las Vegas, Tennessee, or internationally to Mexico or Jamaica, without any caregivers.

The scheme stole more than $1.1 million in VA funds. Lee-Carroll was ordered to pay $932,142 in restitution. Her son, Robert H. Nelson III, 28, was sentenced last November to 14 months in federal prison and was ordered to pay $282,698 in restitution. Her sister, Katoya F. Grant, 41, was sentenced earlier this month to a 'time-served' sentence with six months of supervised release and was ordered to pay $293,787 in restitution.

Lee-Carroll served in the Army for three months in 1986 and then joined the Army Reserves from 1986-1994. Lee-Carroll claimed a service-related disability in 2012 and received caregiver funding in 2013. Prosecutors acknowledged that Lee-Carroll did qualify for some disability payments but not the more than $11,000 per month that she was receiving.

In asking for an 18-month sentence, prosecutors wrote to the court, "For years, Lee-Carroll falsely claimed that she was wheelchair-bound and bedridden to secure over $1 million in VA benefits that are earmarked for severely disabled veterans. She recruited her sister and son into her scheme to defraud the VA and taxpayers out of funds that should have gone to veterans who are, in fact, bedridden and who require round-the-clock care. The VA benefits that she secured through lies funded a lifestyle that included two homes, one in Kent that is worth over $1 million and one in Las Vegas worth $772,000, multiple vehicles, gambling, and frequent international trips."

All three defendants pleaded guilty to Conspiracy to commit theft of government property and a count of health care fraud.

The case was investigated by the Veterans Affairs Office of Inspector General (VA-OIG).

The case is being prosecuted by Assistant United States Attorney Yunah Chung.