The worker, Kevin Maynard, 59, was charged with felony theft of government property after the Rhode Island State Police got a tip, according to court documents obtained by ABC News. His employment status at the cemetery, in Exeter, was not clear.
Investigators followed up on the tip this past April, when they say they discovered the grave markers used as flooring for two makeshift garages and a shed at Maynard's Charlestown, Rhode Island, home, according to the documents.
They also say they found additional gravestones on his property and a box of American flags allegedly stolen from the veteran's cemetery.
Maynard allegedly began removing the worn or broken grave markers from the cemetery and taking them to his home around 2008 or 2009, U.S. Attorney's Office spokesman Jim Martin told ABC News.
Regulations say that any government-issued gravemarkers remain government property in perpetuity, according to the U.S. attorney's office.
Maynard was arraigned in U.S. District Court on Monday, where he pleaded "not guilty."
He previously told authorities he would change his plea to "guilty" at a future plea hearing in exchange for a reduced sentence, according to a plea agreement obtained by ABC News. The plea agreement was filed June 15, 2015.
Maynard's lawyer, Kevin Bristow, told WPRI that defendants are not allowed to plead guilty before a magistrate, but he will change his plea at an upcoming hearing.
Maynard and Bristow did not immediately respond to ABC News' request for comment.
Though Maynard could face a maximum of 10 years in prison, a $250,000 fine and supervised release for three years the government will recommend to the court that he just be given a year of probation with the special condition of completing at least 500 hours of community service, according to the plea agreement.
The headstones that mark the graves at the Exeter cemetery all belong to US military servicemen are provided free of charge to families of veterans by the VA, WPRI said. The station added that cracked or deteriorated stones are also replaced for free, and the damaged ones are stacked in an area at the cemetery until they can be hauled away to be destroyed.
The US Attorney’s Office in Rhode Island and the Rhode Island Veteran's Memorial Cemetery did not immediately respond to ABC News’ inquiries about Maynard’s employment status.