A Kent, Washington, woman was sentenced on Mar. 17 in U.S. District Court in Seattle to 17 months in prison for orchestrating a fraud scheme that stole more than $1 million from Veterans Administration programs, according to First Assistant U.S. Attorney Charles Neil Floyd.
The case highlights the misuse of federal benefits intended for severely disabled veterans and their caregivers. Prosecutors said the fraudulent activity deprived deserving veterans of resources meant to support their care and well-being.
Kelly M. Lee-Carroll, 58, recruited her sister and son into the scheme by falsely claiming she was unable to walk or care for herself and needed round-the-clock assistance. In reality, Lee-Carroll could walk, traveled on vacations, and purchased a second home in Las Vegas while collecting disability benefits. 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.”
“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.”
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... We thank the U.S. Attorney’s Office for their efforts in this investigation.”
Court records show that between July 2012 and October 2024 Lee-Carroll claimed severe disabilities requiring full-time care but was found capable of independent travel without caregivers present during trips to various locations including Las Vegas and international destinations.
Lee-Carroll's sister and son were designated as paid caregivers but often claimed hours while working other jobs or when Lee-Carroll was traveling alone. The total loss exceeded $1.1 million; Lee-Carroll was ordered to pay $932,142 in restitution while her son Robert H. Nelson III received a 14-month sentence with $282,698 restitution and her sister Katoya F. Grant received time served plus six months supervised release with $293,787 restitution.
All three pleaded guilty to conspiracy to commit theft of government property and health care fraud charges following an investigation by the Veterans Affairs Office of Inspector General.
