Nowadays you can find fake or used DD214's in the internet; I am not surprised this actually happened since the way the Army handles its personnel is a bit jacked up. In any case, good stuff he got caught.
Regarding the wear of the military patches and unit identifiers, if you are not in the military and wear them then you are subject to Stolen Valor Act, with a penalty of up to a year in prison plus fines.
To clarify, the wear of the actual unit patches, awards, decorations, Ranger-SF-Sapper tabs, even the wear of the US ARMY nametape, can get you thrown in jail according to Stolen Valor. If you are a soldier and you wear wrong patches or decorations you havent earned, then you will be subject to UCMJ.
Moral is, dont wear anything; besides special operations units dont wear anything anyway.