Colts Neck Financial Advisor Preyed On Gold Star Families, Feds Say

COLTS NECK, NJ — A Monmouth County man who works as a financial counselor with the U.S. Army — and who himself is a major in the Army Reserves — admitted in federal court Tuesday to defrauding Gold Star families, U.S. Attorney Philip Sellinger announced.

A Gold Star family is one who had an immediate family member killed in active-duty military service.

The man is Caz Craffy, aka “Carz Craffey,” 41, of Colts Neck. He pleaded guilty before U.S. District Judge Georgette Castner in Trenton federal court to an indictment of 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.

He is facing up to 20 years in prison and will be sentenced Aug. 21.

According to federal prosecutors:

When a member of the U.S. 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 soldier's life insurance of up to $400,000. These payments are disbursed to the beneficiary in a matter of weeks or months following the servicemember’s death. To assist the beneficiaries in this time of need, the military provides a number of services to the soldier's family, including the assistance of a financial counselor.

Craffy was contracted by the U.S. Army to be that financial counselor.

From November 2017 to January 2023, Craffy was a civilian employee of the U.S. Army, working as a financial counselor with its Casualty Assistance office. He 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.

However, without telling the Army, Craffy simultaneously maintained outside employment with two separate financial investment firms.

Federal prosecutors say Craffy used his position to identify and target Gold Star families and other military families. He encouraged the families to invest their survivor benefits in the investment accounts he managed in his outside, private employment.

From May 2018 to November 2022, Craffy obtained more than $9.9 million from Gold Star families to invest in the accounts he privately managed. Once in control of this money, Craffy repeatedly executed trades, often without the family’s authorization. These unauthorized trades earned Craffy high commissions. During the timeframe of the scheme, 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.

Based upon Craffy’s false representations and omissions, the vast majority of the Gold Star families mistakenly believed that Craffy’s management of their money was done on behalf of and with the Army’s authorization.

He was also a major in the U.S. Army Reserves, where he has been enlisted since 2003.

The case against him was investigated by the FBI, Homeland Security and New Jersey law enforcement.

The Securities and Exchange Commission (SEC) also has a complaint against Craffy currently pending. He has been permanently prohibited from association with any member of the Financial Industry Regulatory Authority Inc. (FINRA).

You can read the federal criminal complaint against him here: https://content.govdelivery.co...