Ex-Army Financial Counselor Who Scammed Gold Star Families Gets Prison

COLTS NECK, NJ — A former U.S. Army financial counselor from Colts Neck was sentenced to 151 months in prison after admitting to defrauding Gold Star families and related crimes, U.S. Attorney Philip R. Sellinger announced Wednesday.

Caz Craffy, also known as “Carz Craffey,” 41, pleaded guilty on April 16 to the indictment filed against him.

Craffy was charged with 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.

In addition to his prison term, Craffy was also sentenced to three years of supervised release and ordered to repay $1.4 million, Sellinger said.

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,” according to government documents in the case. Once Craffy was in control of the money, he “repeatedly executed trades, often without the family’s authorization,” which earned Craffy high commissions.

The Gold Star family accounts lost more than $3.7 million, while Craffy earned more than $1.4 million in commissions drawn from the family accounts, according to case documents.

“Caz Craffy was sentenced to prison today for brazenly taking advantage of his role as an Army financial counselor to prey upon families of our fallen service members, at their most vulnerable moment, when they were dealing with a tragedy born out of their loved one’s patriotism,” Sellinger said. “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.”

“No amount of money can undo their enormous loss,” he said. “Instead of offering guidance, Caz Craffy chose to defraud these heroic families. The lengthy term of imprisonment imposed today is just punishment for this heinous and shameless crime.”

Background on the case
From November 2017 to January 2023, Craffy was a civilian employee of the U.S. Army and worked as a financial counselor with the Casualty Assistance Office. He was also a major in the U.S. Army Reserve, where he’s been enlisted since 2003.

As a financial counselor, Craffy was responsible for providing general financial education to surviving beneficiaries and was prohibited from offering any personal opinions regarding the surviving beneficiary’s benefits decisions.

When a member of the Armed Services dies during active duty, their surviving beneficiary becomes a member of a Gold Star family and 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 a matter of weeks or months following the servicemember’s death. To assist beneficiaries in this time of need, the military provides services to the servicemember’s family, including the assistance of a financial counselor.

Though Craffy was prohibited from offering personal opinions regarding the surviving beneficiary’s benefits decisions and from participating personally in any government matter where he had an outside financial interest, Craffy simultaneously maintained outside employment with two separate financial investment firms without telling the Army.

Craffy used his position as an Army financial counselor to identify and target Gold Star families and other military families, according to officials. He admitted to encouraging Gold Star families to invest their survivor benefits in investment accounts that he managed in his outside, private employment.

Based on Craffy’s false representations and omissions, the 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.

In addition to Craffy’s prison term, supervised release and ordered forfeiture, the U.S. Securities and Exchange Commission has a pending civil complaint against Craffy based on the same and additional conduct.

Craffy has also been permanently prohibited from association with any member of the Financial Industry Regulatory Authority Inc.

To read more about the case, you can read Patch’s previous coverage.