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Caz Craffy, 42, was sentenced on Wednesday, Aug. 21 to 12 years and seven months in prison, New Jersey's U.S. Attorney Philip Sellinger said in a news release. He pleaded guilty to 10 charges on Tuesday, Apr. 16.
Craffy, who's also known as "Carz Craffey," had been a major in the U.S. Army Reserve since 2003. His Army affiliation was terminated in January 2023, according to military records.
According to court documents and statements, Craffy was a civilian employee who worked as a financial counselor with the Casualty Assistance Office between November 2017 and January 2023. He was responsible for providing financial education to families of soldiers killed during active duty and wasn't allowed to offer personal opinions about what they should do with surviving beneficiary’s benefits.
Craffy was also employed through two financial investment firms while working in the Casualty Assistance Office. He admitted to not disclosing his outside employment to the Army, despite knowing he couldn't participate in government matters in which he had an outside financial interest.
Prosecutors said Craffy used his role as an Army financial counselor to target military families. He encouraged Gold Star families to invest survivor benefits into investment accounts he managed outside the Army.
Craffy also lied to many Gold Star families who believed Craffy's advice and money management were authorized by the Army.
"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 in a statement. "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."
Investigators said Craffy received more than $9.9 million from Gold Star families for his privately managed investment accounts. Craffy would control that money and use it to execute trades, many of which weren't authorized by the families.
Craffy earned high commissions on those trades and personally profited more than $1.4 million, while the Gold Star families' accounts lost more than $3.7 million.
"Families of service members who have sacrificed their lives for our country should receive care, respect, and dignity from those assigned to help them secure survivor benefits," said James Ives, principal deputy director of the Defense Criminal Investigative Service. "This outcome underscores DCIS and our law enforcement allies’ unwavering dedication to ensuring that those who exploit their official roles to prey on mourning military families are held accountable."
A surviving beneficiary of a military member who dies in active duty is entitled to a $100,000 payment and that member's life insurance of up to $400,000. The military provides financial counselors to help grieving families navigate the payment process, which can take just a few weeks or months.
Craffy pleaded guilty to six counts of wire fraud, securities fraud, making false statements in a loan application, committing acts affecting a personal financial interest, and making false statements to a federal agency.
The prison sentence includes three years of supervised release for Craffy. He's also been banned from associating with any member of the Financial Industry Regulatory Authority (FINRA).
Craffy will also have to forfeit $1.4 million and pay a to-be-determined amount of restitution.
"The money these survivors are given does nothing to ease their suffering," said James Dennehy, Special Agent in Charge for the FBI's Newark office. "It does, however, help with the burdens they face, such as paying off a mortgage or putting their children through college. They believed Craffy was acting in their best interest, but instead, he was using their money as a method to make his own.
"Heartless and despicable don’t even begin to sum up his crimes."
Craffy got his bachelor's degree in finance from St. John’s University and his master's in business administration from Rutgers University, according to his LinkedIn profile.
He was reportedly fired from Monmouth Capital Management of Point Pleasant in 2022. Records showed he also used to work for Newbridge Securities Corporation and National Securities Corporation of Morristown, and Joseph Gunnar & Co. of Staten Island.
Craffy is also facing a pending civil complaint from the U.S. Securities and Exchange Commission (SEC).
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