It sounds to me like your nephew married someone that is much like my ex, who has completely cleaned me out and continues to. Money does not buy health or happiness, and although it is incredibly painful to look at it from the perspective of all he has lost, try to reframe it. There were no children involved. That is a huge one. Despite being at war, he is alive, safe, and of sound mind enough to know how he wants to move forward with this. He has learned a really big (really painful) lesson that marriage is not something to be taken lightly. Next time he does it, it will be for the right reasons, and he will be much better off that way. He is not stuck spending his life with somebody as immature, selfish, and manipulative as her. I was stuck with mine for 12 years, and now with two children, getting out is the ultimate definition of hell and poverty. It is my children who suffer the most.
Yes, there are many dark sides to this story, and I feel for him and for you and his mother. However, he is young, G-d willing he will have plenty of time to earn money back, and he hopefully will take plenty of time before he gets himself into another marriage, lessons learned. The best advice that I can give to you, which will in many ways be more difficult to do than anything, is to let it go. It will cost him more money in legal fees than he would get back if he were to pursue this legally. Additionally, from Bagdhad, he can't be a part of it. He would have to completely entrust his case to somebody else who know nothing of who he is or where his money went, and probably doesn't really care as long as he gets his $300 and hour. Let it go and be thankful for the positives. I am so sorry about the death of your Mother and your Father's cancer...instead of focusing your energy on a woman who is not worth an ounce of it, focus on the time your father has left, and together with him focus on all of the ways that your mother is still with you via memories, and the way she raised you to be a loving, caring person. Pain aside, your nephew will be OK.

G-d bless him for serving our country- although I am so against the war, I have a place in my heart for every one of those soldiers that are doing their job with courage, faith, and dedication to their committment and their people. Good luck, and be well.

I also wanted to say, in terms of legalities, check to see if your state is a community property state. If it is, she is entitled to 50% of the marital "estate" anyway (unless it was from premarital funds, which it sounds like it may be). Go ahead and grant her the divorce, but be sure that there is some sort of clause in there that not only must she give back the other 50%, but that she is also jointly responsible for the debts. Also be sure to leave any decisions made in the court order open to revision based on discovery. Tell him to make sure that he keeps all of his financial documents (current and prior), especially those proving that he sent her money to cover the bills. If there is any dispute, he will have the evidence he needs in order to pursue further action if he ever is in a better position to.

Just don't get caught up chasing a shadow...

There is a defined set of laws to protect military members from being "fleeced". Your nephew first needs to apply for a "Dear John Hardship leave". His commanding officer can facilitate that paperwork. He also needs to meet with a JAG officer who can point out his legal rights.

No matter what state he is from or resides in there are laws to protect him from this sort of scamming and make no mistake..he's been scammed.

I sent you a private message outlining some of this. Your nephew is protected by the Soldiers and Sailors Act..but he needs to act quickly.