This is an inaccurate conclusion. There are many athletes who hold dual citizenship. Having such status does not disqualify the athlete from competing in the Olympics. There is a 3-year waiting period once an athlete has achieved citizenship before he/she can represent that country in international competitions. That is why Lagat could not represent the U.S. (although he had citizenship status) until the 2007 World Championships. He could have represented the U.S. had his previous country granted him permission, but Kenya did not, probably because they wanted him to represent them in the Olympics. Therefore, if Lagat wanted to compete in the 2004 Olympics, the only country he could have represented at the time was Kenya. There was no deception on Lagat's part. Just because the U.S. does not recognize dual citizenships does not mean other countries do not. Lagat could go back and represent Kenya (they'd love to have him), he just chooses not to.
Almost every one of your sentences are factually incorrect. The most important facts in this matter are 1) The US DOES recognize dual citizenships, 2) Kenya DOES NOT, and finally 3) Lagat chose to keep his citizenship a secret.