Feb. 22, 2012 — -- There was the former Navy SEAL Pennsylvania pastor, the silver and bronze star-winning defense contractor and then the Congressional Medal of Honor-winning California local official -- each with inspiring stories of service to the nation and heroism in the line of fire. The only problem was, none of it was true.

The pastor, Jim Moats, was in the Navy but was never in the SEALs like he claimed. The defense contractor, former Marine Sgt. Gary Lakis, served for 10 years in the Corps, but was never in combat and never won the medals he wore. And Xavier Alvarez, the man who claimed to win the nation's highest military honor, the Congressional Medal of Honor, never served a day in the military.

And though hundreds of military service liars came before Alvarez and dozens more have been outed since he was exposed, the former California public official is the one at the center of a landmark Supreme Court case today.

Alvarez and his attorney are challenging a law, known as the Stolen Valor Act, that makes it illegal to represent oneself as being awarded military honors that have not been rightfully won.

READ: Supreme Court Hears Challenge to Stolen Valor Act That Bars False Claims of Military Honors

After Alvarez was found out, he was convicted in 2007 under the Stolen Valor Act and sentenced to three years probation, a $5,000 fine and community service. But he appealed and his lawyer, Jonathan Libby, argued the law is a violation of the First Amendment -- in short, it violates the right to lie.

"The Stolen Valor Act criminalizes pure speech in the form of bare falsity, a mere telling of a lie," Libby said. "It doesn't matter whether the lie was told in a public meeting or in a private conversation with a friend or family member."

But according to several veterans well acquainted with false war stories, claiming you're a medal-winner can be "more than just lying."

"It's not the barroom loudmouth that anyone is interested in," said Don Shipley, a former SEAL who has been given unique access to the SEAL personnel database so he can route out fakers. "People tend to believe what they're told, they use that... They do an awful lot of damage."

Brandon Webb, another former SEAL and founder of the special operations website SOFREP.com, agreed with Shipley that the law was important for going after more than the occasional barstool liar.

Webb told ABC News it especially angered him "seeing people take advantage of unknowing good people who are trusting in their story, [people who] use people to get money out of them, get positions."

In one such instance, one of the top officials at Texas A&M University was reportedly forced to step down in 2010 after officials discovered he had lied on his resume about being a SEAL, among other claims. In another case, a local charity in Oregon shut down last month after its leader was revealed to have lied about his SEAL credentials, leading to concerns about what the man may have done with donations, according to ABC News' affiliate KATU.

Webb said that his reasoning concerning the law specifically applies to Alvarez's situation as well.

"He lied to get a job," Webb said. "That wasn't at a bar or at a party talking trash... It'd be like being hired on as a doctor when you have no medical experience."

ncG1vNJzZmiZkpi7psPSZ56oZpOkunCOy6irrZ2iZMC1u8uepWaukaG8s3nSrqernZ2aeqS71KurZpyVl661sYyfmKSdXayus3nHnqmonaNkwLW70bJ2opxtZoJ4gphwa28%3D