Former financial counselor Caz Craffy, who worked with the US Army, has pleaded guilty to defrauding Gold Star families out of millions of dollars in life insurance payments, according to the Department of Justice. The 41-year-old New Jersey resident admitted to six counts of wire fraud, one count 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 convicted, Craffy could face a recommended prison sentence of 8 to 10 years. He has also agreed not to appeal a sentence within that range and to make full restitution.
Between November 2017 and January 2023, Craffy, who provided general financial education to Gold Star families, abused his position to target these vulnerable families, court documents revealed. Gold Star families, who are entitled to a $100,000 payment and the servicemember’s life insurance up to $400,000 when a member of the armed forces dies during active duty, were misled by Craffy. He encouraged them to invest in accounts he managed through his outside employment with two financial investment firms, falsely implying that the Army had authorized these investments.
During the period from May 2018 to November 2022, Craffy defrauded the beneficiaries of over $9.9 million. He used the funds for unauthorized trades, earning himself substantial commissions. As a result, Gold Star family accounts suffered losses exceeding $3.7 million, while Craffy personally gained over $1.4 million in commissions taken from their accounts.
Attorney General Merrick Garland expressed the Justice Department’s commitment to protecting Gold Star families from further harm, acknowledging that nothing can undo the immense loss they have already endured. Court filings revealed that Craffy, who was an employee of the Army and a major in the Army Reserve, was prohibited from offering personal opinions regarding the beneficiaries’ money and from participating in any government matter in which he had a financial interest.
