I think it depends on whether or not he received more money or benefits by doing it. I think that’s what has to exist for official Stolen Valor.
If listing that higher rank creates the benefit of embellishing a resume to achieve a better position or job, then I guess it would be Stolen Valor.
Yes and no. Under a provision of something called ROPMA, an officer used to be abler to retire at the next higher rank, strictly for retirement benefits and status. If they ever returned to service they would revert to their previous rank. For a time one would see few retired Ltcs as they almost all retired as full bird.