U.S. District Judge James L. Robart sentenced Nick Hall, 47, to nearly four years in prison, while 33-year-old Keishjuan Daniels is facing just over three years behind bars.
Hall and Daniels operated their scheme under a program that allows veterans to claim reimbursement for driven miles during medical visits, if there isn't a Veterans Affairs medical facility in their hometown.
Prosecutors said Hall and Daniels managed to recruit a few veterans to claim inflated mileage counts. The two then created fake hometown addresses for veterans in places far away from Seattle, such as Pullman, Port Angeles and Port Townsend.
Hall and Daniels would then get half the money reimbursed to their recruits. The men would also create vouchers for visits that never happened.
Starting in 2010 and over 18 months, Hall and Daniels hauled in over $180,000 from their scheme.
"Not only did these defendants recruit vulnerable veterans into criminal activity, they stole resources critically needed to help our men and women returning from Iraq and Afghanistan," said U.S. Attorney Jenny A. Durkan in a statement. "Following the arrests in this case the average monthly cost of larger travel vouchers was cut almost in half here, and sent a deterrent message everywhere: Don't cheat our wounded warriors."
Robart also ordered the men to pay back the $180,000.
The case in Seattle is not isolated and problems with inflated mileage claims have popped up nationwide since the reimbursement increased from 11 cents to 41.5 cents.
Nationwide over the last 18 months the Veterans Affairs Office of Inspector General has conducted 225 investigations and arrested 125 people for fraud in the travel benefits program, prosecutors said.