PROVIDENCE, R.I. (WPRI) — A former Providence VA Medical Center employee was arrested Monday by federal investigators who say she used fake accolades and military medals to bilk nonprofits out of thousands of dollars meant for war heroes.

Sarah Cavanaugh, 31, of Warwick, was charged with multiple federal offenses related to wire fraud, faking military awards and service, along with aggravated identity theft. U.S. Magistrate Judge Lincoln Almond ordered she be released on $50,000 bail under multiple conditions, including not traveling out of state or attempting to contact any potential witnesses.

Prosecutors allege Cavanaugh claimed for years she served in the U.S. Marine Corps and received some of the military’s highest honors, including the Bronze Star Medal with a “V” Device — given for acts of valor in combat — along with a Purple Heart.

Yet investigators said they conducted searches in various VA databases and “found no evidence that Cavanaugh ever served.” Investigators also said they reviewed her work computer, which showed Cavanaugh bought various items from a San Diego, California, company that specializes “in military ribbons and medals.”

“On September 24, 2021, Cavanaugh emailed this business and requested to purchase, among other awards, a Bronze Star with ‘V’ Device and a Purple Heart,” federal officials wrote in court documents. “Cavanaugh requested that the medals be shipped to her home address.”

In addition to using the medals for public recognition — including showing up last fall in a Marine uniform at an event dedicating the Purple Heart Trail in Rhode Island — investigators said Cavanaugh sought thousands of dollars in financial support from various organizations that support veterans of war.

The alleged schemes included receiving about $16,400 from an organization that paid for travel, tuition for an art program and other benefits. She also hosted a GoFundMe campaign in 2021 that raised $4,700 she said would go toward paying for medical bills allegedly related to cancer. Cavanaugh has said she got cancer from exposure to burn pits in Iraq and Afghanistan where she inhaled “particle matter in the aftermath of an improvised explosive device (IED) attack.”

Federal officials said Cavanaugh also bilked a nonprofit called Code of Support to pay her a total of $18,472 for multiple reasons, including asking for financial assistance due to a cut in pay from the VA hospital due to an overpayment.

“Cavanaugh then requests $1,500 USD from Code of Support to pay unspecified monthly bills,” federal officials wrote. “In a follow-up email the same day, Cavanaugh reminded Code of Support she was a Purple Heart recipient.”

Between 2017 and 2021, federal officials said Cavanaugh had extensive contact with the Wounded Warrior Program, estimating the nonprofit paid her about $207,000 over that time.

“Cavanaugh represented herself as a wounded combat veteran to WWP,” investigators wrote. “WWP provided Cavanaugh with benefits such as a check in the amount of $500 per month for groceries and physical therapy sessions.”

Federal officials also accused Cavanaugh of using a unique ID number belonging to an actual Marine, who was interviewed as part of their investigation and said he didn’t know Cavanaugh. Cavanaugh also used official Providence VA hospital letterhead to send a letter to American Airlines seeking a refund on a plane ticket for people close to her, citing COVID-19, according to prosecutors.

The letter appeared to be signed by a VA hospital registered nurse, who later told an FBI agent the signature didn’t belong to her. The nurse also noted that the signature used a misspelled version of her maiden name, which she hadn’t used personally since 2016.

During a remote hearing on Monday, Assistant U.S. Attorney Ronald Gendron called the charges “deeply troubling,” arguing Cavanaugh should be held without bail out of concern she might be a flight risk. He said she was in the process of selling her Warwick home, and had scheduled a trip to the Bahamas recently that was canceled “at the last moment.”

“She has absolutely no difficulty lying and manipulating and conning people,” Gendron said. “I’m worried she will flee.”

Cavanaugh, who attended the hearing remotely from a U.S. Marshals holding cell, answered various yes or no questions from Almond. Her attorney, Kensley Barrett, dismissed Gendron’s concerns, saying Cavanaugh’s decision to sell her home had nothing to do with fleeing, but rather because she’s looking to liquidate her assets “for restitution.”

“I take issue with that,” Barrett said about Gendron’s comments.

Almond ultimately sided with Barrett, saying there were a number of “troubling allegations,” but that Cavanaugh’s case was similar to many other fraud cases.

“There is always some risk of flight, but we regularly release defendants in fraud cases, and I don’t see anything unique in this case that would make me take a different approach with Ms. Cavanaugh,” he said.

Cavanaugh was placed on leave last month after the allegations first came to light, and her access to the Providence VA’s systems was revoked. She also resigned as commander of VFW Post 152.

Under the conditions of her release, Cavanaugh will be assigned a pretrial services officer and must undergo mental health treatment, surrender her passport and not possess a firearm. Following the hearing, the Rhode Island Department of the VFW issued a statement, saying it takes “fraud and the matter of stolen valor seriously.”

“The alleged actions of Sarah J. Cavanaugh are not a reflection on our veteran service organization as a whole or the combat veterans who make up its membership,” the group said.

Eli Sherman ( is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.

Kayla Fish contributed to this report.