A former financial counselor with the US Army has pleaded guilty to defrauding grieving Gold Star families out of millions of dollars worth of life insurance payments, the Department of Justice said Tuesday.
New Jersey resident Caz Craffy, 41, pleaded guilty 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.
If found guilty he could spend 8 to 10 years in prison under recommended federal guidelines. He’s also agreed not to appeal a sentence up to that range and to make full restitution.
When a member of the armed forces dies during active duty their surviving beneficiary — a Gold Star family member — is entitled to a $100,000 payment and the servicemember’s life insurance up to $400,000.
From November 2017 to January 2023, Craffy was responsible for providing general financial education to Gold Star families but instead used his position to “target” these vulnerable families, court documents revealed.
“Nothing can undo the enormous loss that Gold Star families have suffered, but the Justice Department is committed to doing everything in our power to protect them from further harm,” Attorney General Merrick Garland said in a statement.
The 41-year-old was an employee of the Army working as a financial counselor with the Casualty Assistance Office and has also been a major in the Army Reserve.
He was prohibited from offering any personal opinions regarding the beneficiaries money and was “not permitted to participate personally in any government matter in which he had an outside financial interest in,” court filings read.
Craffy admitted that he’d encouraged Gold Star families to invest in accounts he managed in his outside employment with two separate financial investment firms. The families mistakenly believed this was with the authorization of the Army.
From May 2018 to November 2022, Craffy cheated the beneficiaries out of more than $9.9 million.
He used the money for trades without the family’s authorization earning Craffy high commissions.
Gold Star family accounts lost more than $3.7 million, while Craffy earned more than $1.4 million in commissions taken from their accounts.
“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,” Acting Special Agent in Charge William S. Walker of Homeland Security Investigations (HSI) Newark said.
Craffy entered his plea before US District Judge Georgette Castner in Trenton, New Jersey and is scheduled to be sentenced on August 21.
