Forced sleep deprivation was a part of attempts to "brainwash" prisoners. The North Koreans employed it on American POWs in the Korean War and the CIA incorporated it into experiments with mind control. Brainwashing is now mostly discredited and the stuff of spy novels, although some would argue its less violent methods were incorporated into modern advertising. And cults often force their new members to do activities in the middle of the night when they would otherwise be asleep, presumably because this increases acceptance of the cult’s message. This isn’t brainwashing as portrayed in The Manchurian Candidate, and there is no evidence we could find that it actually works.
There are two types of sleep deprivation: total and partial. In normal life, total sleep deprivation usually occurs only in emergency periods. Shift work can produce partial deprivation when the worker’s schedule does not allow them to fully recover. Much of the medical world’s work on sleep deprivation is concerned with this partial deprivation. Torture and interrogation produce total deprivation, and less is known about the effects of total deprivation in humans.
There is evidence that sleep deprivation can result in false memories, although it does not appear that handlers can manage the process and implant memories they want to. Memory is not like a video recording and not particularly reliable. Just ask a criminal justice attorney. Eyewitnesses are notoriously unreliable. Memories depend greatly on the subject’s understanding of the world, emotions at the time, and other circumstantial specifics.
Psychologists have shown false memories can occur as interrogation often induces the subject to knit together false memories from fragments of real memories and suggestions or queries from the interrogation. The scandals involving false allegations of child abuse at daycare centers was a famous case of this.
Sleep deprivation messes with cognitive abilities that are known to be largely controlled by the prefrontal cortex of the brain. An article published on PLosOne said "False memories, as compared to true memories, show greater activation in prefrontal regions." This suggests sleep deprivation leads inadvertently to false memories. However, this is not the same as brainwashing where the handler can implant specific allegiances, emotions, and a narrative.
It’s harder to lie when you are mentally fatigued. Interrogators know this and sometimes seek opportunities to question suspects when they are tired. Whether they force a sleep deprivation on a subject and how much that deprivation is – that’s a matter of professional ethics, individual circumstances, and social and institutional controls. Forcing a prisoner to forgo sleep for long periods is considered a form of torture by international monitoring groups.
Which doesn’t mean it doesn’t happen, maybe as part of a larger torture regimen. Some lawyers have argued sleep deprivation is not a form of torture, but instead a “stress and distress” technique, perhaps making it less offensive under the law. However, the international consensus is that prolonged sleep deprivation constitutes torture, although at what length of time the forced deprivation crosses the line to torture is a matter for the courts to decide.