***TIMED OUT***Isn't it illegal?
Generally, yes. The Stolen Valor Act of 2005 (Senate bill 1998, signed into law by President George W. Bush on Dec. 20, 2006), stipulates,
“Whoever falsely represents himself or herself, verbally or in writing, to have been awarded any decoration or medal authorized by Congress for the Armed Forces of the United States, any of the service medals or badges awarded to the members of such forces, the ribbon, button, or rosette of any such badge, decoration, or medal, or any colorable imitation of such item shall be fined under this title, imprisoned not more than six months, or both.”
Furthermore, it prescribes higher penalties for higher combat decorations:
“If a decoration or medal involved in an offense described in subsection (a) or (b) is a distinguished-service cross awarded under section 3742 of title 10, a Navy cross awarded under section 6242 of title 10, an Air Force cross awarded under section 8742 of section 10, a silver star awarded under section 3746, 6244, or 8746 of title 10, a Purple Heart awarded under section 1129 of title 10, or any replacement or duplicate medal for such medal as authorized by law, in lieu of the punishment provided in the applicable subsection, the offender shall be fined under this title, imprisoned not more than 1 year, or both.”
The Medal of Honor is also protected by fines and imprisonment of up to one year.
A false claim of military service or war service, without specific claims of medals, badges, rank or other recognition, is generally not illegal. That said, it reflects negatively on the person who makes such claims when they are not true.
Title 18 USC, Part I, Chapter 33, section 704 covers the issue: http://www.law.cornell.edu/uscode/18/704.html