A New Jersey financial counselor with the U.S. Army and major in the U.S. Army Reserves pleaded guilty today to defrauding Gold Star families and related crimes, officials stated.
Caz Craffy, also known as Carz Craffey, 41, of Colts Neck, pleaded guilty before U.S. District Judge Georgette Castner in Trenton, New Jersey, to six counts of wire fraud, and one count each of securities fraud, making false statements in a loan application, committing acts affecting a personal financial interest, and making false statements to a federal agency, officials stated Wednesday.
“Caz Craffy admitted today that he brazenly took advantage of his role as an Army financial counselor to prey upon families of our fallen service members, at their most vulnerable moment, using lies and deception,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “These Gold Star families have laid the dearest sacrifice on the altar of freedom. And they deserve our utmost respect and compassion, as well as some small measure of financial security from a grateful nation. We will use every means at our disposal to ensure that those who defraud our military families are held accountable. Caz Craffy now faces the prospect of years in prison for ripping off these families to line his own pocket.”
Craffy faces a maximum penalty of 20 years in prison for each count of wire fraud and securities fraud, a maximum penalty of two years in prison for submitting a false statement on a loan application, and a maximum penalty of five years in prison for the charges of acts affecting a personal interest and false statements to a federal agent.
“Those who prey on the family members of fallen soldiers, will be sought out and held accountable,” said Special Agent in Charge Joel Kirch of the Department of the Army Criminal Investigation Division Northeast Field Office.
“Craffy disgraced his entrusted position to care for our nation’s military families when he allegedly took advantage of them during a vulnerable time of grief,” said Acting Special Agent in Charge William S. Walker of Homeland Security Investigations (HSI) Newark. “No family, especially our Gold Star families, should have to face further heartache after a loved one’s death by having their financial security ripped out from under them by fraudsters.”
According to documents filed in this case and statements made in court:
When a member of the Armed Services dies during active duty, his or her surviving beneficiary, now a member of a Gold Star family, is entitled to a $100,000 payment and the servicemember’s life insurance of up to $400,000.
These payments are disbursed to the beneficiary in weeks or months following the servicemember’s death.
To assist the beneficiaries in this time of need, the military provides several services to the servicemember’s family, including the assistance of a financial counselor.
From November 2017 to January 2023, Craffy was a civilian employee of the U.S. Army, working as a financial counselor with the Casualty Assistance Office.
He was also a major in the U.S. Army Reserves, where he has been enlisted since 2003. Craffy was responsible for providing general financial education to the surviving beneficiaries.
He was prohibited from offering any personal opinions regarding the surviving beneficiary’s benefits decisions. Craffy acknowledged that he was not permitted to participate personally in any government matter in which he had an outside financial interest.
However, without telling the Army, Craffy simultaneously maintained outside employment with two separate financial investment firms.
Craffy used his position as an Army financial counselor to identify and target Gold Star families and other military families. He admitted to encouraging the Gold Star families to invest their survivor benefits in investment accounts he managed in his outside, private employment.
Based on Craffy’s false representations and omissions, most of the Gold Star families mistakenly believed that Craffy managed their money on behalf of and with the Army’s authorization.
From May 2018 to November 2022, Craffy obtained more than $9.9 million from Gold Star families to invest in accounts managed by Craffy in his private capacity.
Once in control of this money, Crafty repeatedly executed trades, often without the family’s authorization.
These unauthorized trades earned Craffy high commissions.
During the scheme’s timeframe, the Gold Star family accounts lost more than $3.7 million, while Craffy personally earned more than $1.4 million in commissions drawn from the family accounts.
All counts but the securities fraud count are punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greater. The securities fraud count is punishable by a maximum fine of either $5 million or twice the gain or loss from the offense, whichever is greater. A sentencing hearing is scheduled for Aug. 21.
The U.S. Securities and Exchange Commission (SEC) has a pending civil complaint against Craffy based on the same and additional conduct.
Craffy has been permanently prohibited from association with any member of the Financial Industry Regulatory Authority Inc. (FINRA).
The Department of the Army Criminal Investigation Division, DCIS, FBI, and HSI Newark, investigated the case.
Assistant U.S. Attorneys Martha K. Nye and Carolyn Silane for the District of New Jersey are prosecuting the case.