Feb. 9, 2010 -- At a time when returning soldiers are regarded as national heroes and the number of war dead continues to rise, lying about medals affixed to a military uniform is seen as a lie so foul, it is criminal.

It is being challenged now in federal court. Xavier Alvarez, a California man convicted in 2007 of falsely claiming to be a decorated Marine, is asking the U.S. Court of Appeals to overturn the conviction and rule the Stolen Valor Act unconstitutional. A ruling could come at any time.

Most legal experts think he will lose. But he argues that his right to free speech -- even his right to lie -- is protected by the First Amendment.

"It's no more free speech than yelling 'Fire!' in a crowded theater is free speech," Georgetown University law professor Gary Solis told ABCNews.com.

Alvarez was a member of a California municipal water board when he claimed at a 2007 meeting that he was a former Marine with 25 years service and that he had been awarded the Congressional Medal of Honor, the highest military honor awarded by the U.S. government. He is now in prison on an unrelated conviction for insurance fraud.

"I'm not going to defend what Mr. Alvarez said. It was wrong," Deputy Federal Public Defender Jonathan Libby said. "The First Amendment is supposed to mean something."

Upholding the Stolen Valor Act, Libby said, basically gives Congress the right to decide which lies are punishable as crimes. Alvarez didn't commit perjury, he said, and he didn't use his claims to collect veterans affairs benefits. His crime hurt no one, Libby argues.

"People tell lies about all sorts of things all the time," Libby said. "And the First Amendment certainly protects the right to lie."

Solis, a former Marine prosecutor and a two-tour Vietnam veteran, said lying about military service is an affront to anybody who has proudly worn a U.S. military uniform.

"It's repulsive. It makes me want to punch someone," he said.

People who lie about military medals are "attempting to gain recognition and personal favor and tangibly better treatment on the basis of the valor of others who have sacrificed greatly, perhaps with their lives," he said.

Stolen Valor Frauds Often Also Seek Financial Benefits

To reduce the matter of stolen valor to a freedom of speech argument, Solis said, is "not only ludicrous, but insulting to the memory of those who have earned what gents like this try to take for free."

One judge has already quashed Alvarez's plea. In a 2008 decision denying Alvarez's motion to dismiss his conviction, U.S. District Court Judge R. Gary Klausner of the Central District of California denied Alvarez's motion to dismiss his conviction on the basis that the Stolen Valor Act violated his First Amendment rights.

"It appears to be merely a lie intended to impress others present at the meeting," Klausner wrote in his decision. "Such lies are not protected by the Constitution."

Doug Sterner, an Army veteran whose wife's college policy analysis led to the writing of the Stolen Valor Act, has been tracking fake military claims for years.

He gets hundreds of phony applications each year for the Hall of Valor, an online collection of military citations and awards. Though the Hall of Valor was intended to document the heroic tales of America's service men and women, he now also uses it as a platform to report possible violations of the Stolen Valor Act.

He sees very few cases where such a lie isn't fueled by a desire to take advantage of some benefit to decorated veterans.

"Almost without exception in every sort of stolen valor case I have dealt with, there is some kind of underlying fraud, usually with financial fraud," he said.

In Houston last week, the FBI arrested a man who attended the mayoral inauguration with enough medals pinned to his chest to raise the suspicion of one retired military man who snapped several pictures and sent them to ABC's Houston affiliate KTRK.

The photo shows him at Mayor Annise Parker's inauguration in December wearing a U.S. Army general's uniform "and many unauthorized and unearned military combat and bravery awards."

Michael Patrick McManus, 44, was later arrested at his home and charged with violating the Stolen Valor Act. According to a news release after his arrest, the FBI found that he had served in the Army for three years in the 1980s, but never rose above the rank of private.

Stolen Valor: Medals Indicate Bravery, Sacrifice

Among the medals on McManus' uniform were the Distinguished Service Cross combat award for bravery, the Silver Star combat award for bravery, the Bronze Star combat award for bravery, the U.S. Air Medal award, the U.S. Flying Cross award and a Purple Heart.

He was also wearing the Combat Infantry Badge, Master Jump Wings, Helicopter Pilot Wings, Air Assault Wings and the Pathfinder Badge, according to the FBI.

Sterner noted that the vast majority of suspected stolen valor cases are never prosecuted. He knows of 50 to 60 convictions since the law was signed by President George Bush. He attributed the seemingly low number of charges filed to a disparity among U.S. attorneys willing to take on such cases unless they are particularly egregious.

But for the men and women who actually earned the medals, even the slightest exaggeration is an insult to not just them, but the armed forces.

"It's not simply a pickup line," Solis said.

Military decorations are so enticing to some that even former Navy Adm. Jeremy Boorda, who commanded a ship in Vietnamese waters during the Vietnam War, was challenged in 1996 over two "V"s that were attached to medals that he wore in an official photo. The Vs designated that he won the medals in combat.

As an indication of how sensitive an issue those medals are to people who have earned them, Boorda committed suicide in 1996 when pressed to defend his honors.

It's also not a new offense. The Stolen Valor Act only strengthened existing laws that punished those wearing unauthorized military decorations and medals.

Solis said he remembered prosecuting what amounted to a stolen valor case in the 1970s when a police officer who was a veteran of the military, recognized that the decorated uniform of a Marine he pulled over for speeding had been exaggerated based on the medals pinned to the front.

"He just wanted to be a hometown hero," Solis said.