If I recall correctly, most VISA applications would ask if you had been "denied" a VISA from some other country, and not just the USA. These forms talk in USA "legal speak" and there are subtle differences (if I recall correctly, you can be turned away from the USA without necessarily having any VISA denial on record).
I wonder if there was a discrepancy in the answer to this question, i.e. did the applicant say they'd never been denied a VISA anywhere before but the US Consulate discovered the denial?