U.S. Attorney for the District of New Jersey Philip Sellinger announced Tuesday that Caz Craffy (aka Carz Craffey) admitted to a scheme that defrauded Gold Star families out of nearly $10 million.
Craffy, 41, of Colts Neck, pleaded guilty before U.S. District Judge Georgette Castner in Trenton federal court April 16 to the 10-count indictment he was charged with last summer.
Six counts of wire fraud, punishable by a maximum of 20 years in prison
One count of securities fraud, punishable by a maximum of 20 years in prison
One count of making false statements in a loan application, punishable by a maximum of two years in prison
One count of committing acts affecting a personal financial interest, punishable by a maximum of five years in prison
One count of making false statements to a federal agency, punishable by a maximum of five years in prison
All counts, except the securities count, are punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest. 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 greatest.
Targeted operation
As NJBIZ reported last year when the indictment dropped, Craffy served as a civilian employee of the U.S. Army from November 2017 to January 2023, working as a financial counselor with the Casualty Assistance Office. Since 2003, he had also served in the U.S. Army Reserves, where he was a major.
In his role as financial counselor, Craffy was responsible for providing general financial education to the surviving beneficiaries of Gold Star families. These groups are entitled to a $100,000 death gratuity as well as the soldier’s life insurance of up to $400,000.
Prosecutors alleged that despite not being permitted to participate personally in any government matter in which he had an outside financial interest, Craffy – without telling the Army – simultaneously maintained outside employment with two separate financial investment firms.
The prosecutors further alleged that Craffy used this position 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 that he managed in his outside, private employment,” according to case documents and court statements released by prosecutors. “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.”
High commissions, big losses
From May 2018 and November 2022, prosecutors alleged that Craffy had obtained more than $9.9 million from Gold Star families to invest in accounts managed by him in his private capacity.
“Once in control of this money, Craffy repeatedly executed trades, often without the family’s authorization. These unauthorized trades earned Craffy high commissions,” prosecutors continued. “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.”
Craffy also faces a pending civil complaint with the U.S. Securities and Exchange Commission (SEC) over the same and additional conduct. He is permanently prohibited from association with any member of the Financial Industry Regulatory Authority (FINRA).
“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 valuable moment, using lies and deception,” said Sellinger. “These Gold Star families have laid the dearest sacrifice on the altar of freedom. And they deserve our compassion, as well some small measure of financial security from a grateful nation.”
Accountability
“Those who target and steal from the families of fallen American servicemembers will be held accountable for their crimes,” said Attorney General Merrick Garland. “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.”
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
“Gold Star families are given a title no one would choose because it means they’ve paid the ultimate sacrifice for this country,” said FBI-Newark Special-Agent-in-Charge James Dennehy. “The soldier, sailor marine, or airman they loved died during a time of conflict – defending this nation. They are given money and assistance to help ease the burden that comes with losing their loved one, but no amount of money can replace what they’ve lost. Craffy took advantage of his position and defrauded families already going through a tremendous amount of suffering.”
“We will use every means at our disposal to ensure that those who defraud our military families are held accountable,” said Sellinger. “Caz Craffy now faces the prospect of years in prison for ripping off these families to line his own pocket.”
An attorney representing Craffy did not immediately respond to a request for a comment.
Address: 55021 Usha Garden, North Larisa, DE 19209
Phone: +6812240846623
Job: Corporate Healthcare Strategist
Hobby: Singing, Listening to music, Rafting, LARPing, Gardening, Quilting, Rappelling
Introduction: My name is Foster Heidenreich CPA, I am a delightful, quaint, glorious, quaint, faithful, enchanting, fine person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
Listen to this article
