Gold Star families allegedly defrauded of death benefits by adviser

A major in the U.S. Army Reserves and financial counselor with the Army is facing several criminal charges for allegedly defrauding Gold Star families, the Justice Department announced.

Caz Craffy, also known as Carz Craffey, of Colts Neck, New Jersey, allegedly tricked grieving family members into handing over hundreds of thousands of dollars of their deceased loved one's military benefits. From May 2018 until around January 2023, the accounts of Craffy's alleged victims decreased in value by more than $3.4 million as a result of market losses and commissions paid. Craffy, meanwhile, earned around $1.4 million in commissions by executing trades using these families' money, the Justice Department said.

Craffy is facing criminal charges of 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, according to court documents.

The Securities and Exchange Commission also charged Craffy, 41, with violating the antifraud provisions of the federal securities laws and Regulation Best Interest.

Mark A. Berman, the attorney representing Craffy, declined to comment.

"Stealing from Gold Star families whose loved ones made the ultimate sacrifice in service to our nation is a shameful crime," Attorney General Merrick Garland said in a statement announcing the indictment. "Predatory conduct that targets the families of fallen American service members will be met with the full force of the Justice Department."

Prosecutors say that Craffy used his position as a civilian employee working as a financial counselor with the Army's Survivor Outreach Services in New Jersey to get close to his alleged victims. This program was overseen by the the Casualty Assistance Office, which provided long-term support to families of fallen servicemembers.

When a servicemember dies during active duty, this individual's surviving beneficiary, now called a member of a Gold Star family, can get a $100,000 death gratuity and up to $400,000 from a soldier's life insurance. In his role with the Survivor Outreach Services, Craffy was responsible for giving general financial information to the family members of a servicemember who died. Craffy was not supposed to offer any personal opinions regarding what these families should do with the benefits.

While employed by the Army, he failed to disclose his employment with two unnamed private financial firms , according to the indictment.

Using his access to these families, Craffy pushed them to transfer their six-figure benefits into brokerage accounts he managed outside of his work with these private firms. Once he received this money — and without family approval — Craffy engaged in often high-risk trades that didn't match the customers' investment goals and frequently lost them huge sums of money.

He was expected to make his initial court appearance Friday before U.S. Magistrate Judge Tonianne J. Bongiovanni at the Trenton Federal Courthouse.

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