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NJ Broker Scammed Grieving Army Families Out Of $3.5 Million In Death Benefits, Feds Charge

Families of soldiers killed in war lost nearly $3.5 million to a merciless financial counselor from New Jersey who exploited their grief, federal authorities have charged.

Gold Star families “have laid the dearest sacrifice on the altar of freedom,” , U.S. Attorney for New Jersey Philip R. Sellinger said on Friday, July 7.

Gold Star families “have laid the dearest sacrifice on the altar of freedom,” , U.S. Attorney for New Jersey Philip R. Sellinger said on Friday, July 7.

Photo Credit: U.S. Attorney's Office for New Jersey /americasgoldstarfamilies.org/ FACEBOOK

Caz Craffy, 41, worked for the United States Army when he defrauded two dozen Gold Star families who trusted him out of death benefits, U.S. Attorney for New Jersey Philip R. Sellinger said on Friday, July 7.

Craffy – also known as “Carz Craffey” – “took advantage of his role as an Army financial counselor, using lies and deception to steer their investments in a way that would make him money,” Sellinger said during a news conference at his office in Newark.

For many, it was the only money they had.

Whenever a member of the armed services dies during active duty, his or her surviving beneficiary becomes a Gold Star family member, entitling them to a $100,000 death gratuity and the soldier’s life insurance up to $400,000.

The payments go out within months, and sometimes weeks, of a service member’s death, Sellinger said.

The military provides various forms of assistance, including the appointment of financial counselors such as Craffy, the U.S. attorney said Friday.

In his role, Craffy was prohibited from offering any personal opinions on what the families should do with the money. Nor, of course, could he benefit personally.

Without telling the Army, however, Craffy moonlighted with not one but two financial investment firms, Sellinger said.

Craffy -- who lives in the bedroom community of Colts Neck near the Jersey Shore -- specifically identified and targeted vulnerable Gold Star families and other military civilians, according to an indictment returned by a federal grand jury in Trenton.

“False representations and omissions” convinced “the vast majority” of Gold Star families that Craffy was managing their money on behalf of the Army, the indictment alleges.

Instead, he steered it to private and often risky investment accounts that he managed on the side, it says.

From May 2018 to November 2022, Craffy collected more than $9.9 million from Gold Star families to invest in accounts that they thought were controlled by the Army, Sellinger said.

Meanwhile, Craffy “repeatedly executed trades, often without the family’s authorization,” the U.S. attorney said.

The unauthorized trades earned Craffy nearly $1.5 million in commissions, Sellinger said.

The families, meanwhile, lost more than $3.4 million, he said.

Craffy allegedly told those who questioned him or balked to be patient and to not look at their statements. He also blamed the pandemic for declining returns, even though the market had grown in three straight years, investigators said.

Craffy got his bachelor of science degree in finance from St. John’s University and master of business administration from Rutgers Business School, according to his LinkedIn profile.

He'd been a major in the U.S. Army Reserves since 2002, but his Army affiliation was terminated this past January, records show.

Craffy was reportedly fired from Monmouth Capital Management of Point Pleasant last November amid an investigation by the Financial Industry Regulatory Authority, with whom he allegedly refused to cooperate.

Craffy also previously worked for Newbridge Securities Corporation and National Securities Corporation of Morristown and Joseph Gunnar & Co. of Staten Island, records show.

The SEC and the Army’s Criminal Investigation Division zeroed in on Craffy after a Gold Star family member complained, authorities said.

The victims “have laid the dearest sacrifice on the altar of freedom,” Sellinger said Friday. “These families deserve our utmost respect and compassion, as well as some small measure of financial security from a grateful nation.

“They must be off-limits for fraudsters.”

The federal indictment charges Craffy with six counts of wire fraud and one count each of securities fraud, making false statements in a loan application, committing acts furthering a personal financial interest, and making false statements to a federal agency.

The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Craffy on Friday based on the same and additional conduct, Sellinger said during Friday’s news conference.

Joining him were:

  • SEC Division of Enforcement Director Gurbir S. Grewal, a former assistant U.S. attorney, New Jersey attorney general and Bergen County prosecutor from Glen Rock;
  • Homeland Security Investigations Newark Office Special Agent in Charge Ricky J. Patel, another New Jersey native;
  • Special Agent-in-Charge Joel Kirch of the Department of the Army Criminal Investigation Division’s Northeast Field Office;
  • Regional Director Richard Monticello of the U.S. Department of Defense’s Criminal Investigation Service;
  • FBI Newark Field Office Special Agent in Charge James Dennehy;
  • Assistant U.S. Attorneys for New Jersey Martha Nye and Carolyn Silane.

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