Man Convicted of Disability Fraud Claims He’s Actually Disabled

— -- Is it possible to be completely physically disabled one day and fully active the next?

That was the million dollar question for Dennis Paulsen.

From 1993 on, Paulsen, who served two years in the Navy, convinced the Department of Veterans Affairs (VA) that he was unable to use his hands or feet.

“[He said he was] not only too sick to work but too sick to get out of bed most days,” Assistant U.S. attorney Jay Richardson told ABC News’ “Nightline.”

Paulsen said he wasn’t able to walk or work. But throughout the years, that didn’t always seem like the case.

“He lived a very active lifestyle,” Richardson said. “He lived a life that changed depending on who he was around. So when he was around doctors and people that would provide him benefits, he gave the impression that he was wheelchair bound.”

Paulsen was seen on surveillance videos arriving at the VA for a checkup in his wheelchair, yet other times, he was on his feet walking just fine.

Investigator Paul Lee began filming surveillance video of Paulsen after a tip came in to the VA.

Lee filmed Paulsen at a pool hall shooting pool, which may seem harmless, but Lee says Paulsen's abilities were inconsistent with what he had claimed to the VA.

“He’s being paid for 100 percent loss of use of hands and 100 percent loss of use of feet, permanently and in total,” Lee told “Nightline.”

The VA doles out $60 billion a year in disability benefits, mostly to veterans wounded in the line of duty. The vast majority of veterans are entitled to those benefits, but complaints of fraud have nearly tripled over the past decade.

What makes Paulsen’s case unusual is that he got away with it for years. By the time the VA finally caught up with him, he had been scamming the system for more than 20 years.

“By the time he was caught, he defrauded more than $1.6 million from the government, checks that he had gotten that he actually should not have,” said Richardson.

The biggest piece of evidence against Paulsen didn’t actually come from the surveillance footage, but from his then-wife’s blog. Paulsen’s wife blogged about his various activities and included photos of him playing baseball, roller skating and bungee jumping. All the while, Paulsen had been claiming he was totally disabled.

Paulsen was convicted of stealing more than $1.6 million from the VA and the Social Security Administration this January. He was ordered to pay back the $1.6 million in addition to a fine, and was sentenced to 41 months behind bars.

But Paulsen said he wasn’t pretending to be disabled.

“I’m not faking anything. I’m trying to fight this disease and try to get some kind of enjoyment out of life when I can,” Paulsen told “Nightline.”

Paulsen said it all started in 1990. After serving just two years in the Navy, he said he started getting symptoms.

“I couldn’t feel the left side of my face, and I was having chest pains. And I was 19, and I’m like, ‘Oh my God, am I having a heart attack?'” he said.

He went to Bethesda Naval Hospital and doctors there said he was suffering from a probable diagnosis of multiple sclerosis (MS). Paulsen said he then got a second opinion at the National Institutes of Health (NIH).

“Within five minutes of [the doctor] looking at the results of the Navy, he goes, ‘You definitely have MS,’” Paulsen said.

Paulsen was given a medical retirement from the Navy and was entitled to 30 percent of his wages for life, with no questions asked.

But, according to prosecutors, Paulsen did ask questions.

“He also researched on the internet the symptoms and so he knew what to say to the doctors when he went in,” Assistant U.S. attorney Bill Day, who prosecuted the case with Richardson, told “Nightline.”

When it comes to disability compensation from the VA, the more disabled you are, the more compensation you receive.

Since MS is a degenerative disease affecting the central nervous system, the symptoms tend to get worse over time. And as they do, Paulsen would be entitled to more and more benefits.

Though he convinced the VA for years that he was completely disabled, photos of him playing sports and bungee jumping tell a different story.

Paulsen even competed in a Marine Corps “Tough Mudder” race, but he argues that it wasn’t easy for him.

“I struggled through that. I struggled, and I let people know that,” Paulsen said. “Every job I try I looked healthy enough to do. But I’d go out to work at Lawn Doctor and try to open up the fertilizer bags and things would slip out of the bags. But here I am, I look healthy. We wouldn’t even be discussing this if I went to Afghanistan or Iraq and got my legs blown off and had to wear prosthetics and then you see prosthetics, people with prosthetics competing [at the Invictus Games]."

He continued, "They get looked at as inspiring. But I get looked at like I’m a fraud because you can’t see the disease?”

When asked why the military owes him a lifetime of benefits when he’s fit enough to do all the activities he was photographed doing, Paulsen said it’s “because I’m service-connected.”

He said he feels he didn’t have a fair trial because he didn’t have a jury of his peers.

“Nobody on that jury has MS,” Paulsen said. “At least one or two people should have had MS on that jury for me to get a fair ruling.”

Unfortunately, there’s a chance that over time Paulsen’s MS will progress to a point that he actually is totally disabled, but having cheated the system, it’s not clear if he would be able to collect the benefits he would otherwise be entitled to.

Despite the conviction, Paulsen says he only has one regret. “I wish I had never gotten diagnosed with MS. I’d give anything not to have this disease. Anything,” Paulsen said.

Watch the full story on ABC News' "Nightline" TONIGHT at 12:35 a.m. ET.