A former U.S. Army financial counselor was sentenced on Aug. 21 to over 12 years in prison for defrauding families of fallen soldiers using government life-insurance payouts, the U.S. Attorney’s Office said.
Caz “Carz” Craffy, 42, of Colts Neck, New Jersey, got 151 months in prison and three years of supervised release. He pleaded guilty in April to six counts of wire fraud and a slew of other criminal charges, including securities fraud, making false statements in a loan application, and making false statements to a federal agency.
From November 2017 to January 2023, Craffy was employed as a financial counselor with the U.S. Army’s Casualty Assistance Office in Monmouth County, New Jersey. His job was to provide financial advice to the surviving beneficiaries of fallen troops.
Gold Star families—families or other beneficiaries of servicemembers killed while on active duty —are entitled to a $100,000 payment and the servicemember’s life insurance of up to a maximum of $400,000. These payments are typically disbursed within weeks or months following the servicemember’s death.
Instead of assisting the beneficiaries in this time of need, Craffy persuaded the families to invest their government payouts in investment accounts that he managed in two separate private investment firms that he worked for, prosecutors said.
“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,” a statement from the U.S. Attorney’s Office read.
However, as a military financial counselor, Craffy was prohibited from offering “personal opinions” regarding the beneficiaries’ benefits decisions. Prosecutors said Craffy admitted in court to being aware that he was not allowed to involve his own financial interests in these government matters.
The investigation revealed that from May 2018 to November 2022, Craffy obtained more than $9.9 million from Gold Star families and other military families, which he invested in accounts managed by him at two separate investment companies.
Craffy’s investment trades earned him more than $1.4 million in commissions, while the family accounts lost more than $3.7 million in total, prosecutors said.
“The money these survivors are given does nothing to ease their suffering. It does, however, help with the burdens they face, such as paying off a mortgage or putting their children through college,” said FBI Special Agent in Charge James E. Dennehy.
“He was using their money as a method to make his own,” he added. “Heartless and despicable don’t even begin to sum up his crimes.”
In addition to the 151-month prison sentence, the judge also ordered the forfeiture of the $1.4 million commission Craffy obtained with his scheme.
“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,” said U.S. Attorney Philip R. Sellinger.
“No amount of money can undo their enormous loss. Instead of offering guidance, Caz Craffy chose to defraud these heroic families,” Sellinger said. “The lengthy term of imprisonment imposed today is just punishment for this heinous and shameless crime.”
In addition to the sentencing, the U.S. Securities and Exchange Commission has its own civil complaint pending against Craffy regarding the same scheme and other matters.