Colts Neck financial counselor admits to defrauding Gold Star families, pocketing money

TRENTON - A Colts Neck financial counselor who worked in the casualty assistance office of the United States Army has admitted to defrauding Gold Star families, earning over $1.4 million for himself in the process, U.S. Attorney Philip R. Sellinger announced.

Caz Craffy, aka “Carz Craffey,” 41, who was also a major in the U.S. Army Reserves, pleaded guilty to six counts of wire fraud and one count each of securities fraud, making false statements in a loan application, committing acts affecting a personal financial interest, and making false statements to a federal agency, Sellinger said.

“Those who target and steal from the families of fallen American servicemembers will be held accountable for their crimes,” Attorney General Merrick B. Garland said. “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.”

When a member of the Armed Services dies during active duty, their surviving beneficiary, now known as a member of a Gold Star family, is entitled to a $100,000 payment and the servicemember's life insurance of up to $400,000, Sellinger said. These payments are given to the beneficiary in a matter of weeks or months following the servicemember's death and the military provides a number of services to the servicemember’s family, including the assistance of a financial counselor.

From November 2017 to January 2023, Craffy was a civilian employee of the U.S. Army, working as a financial counselor with the Casualty Assistance Office, according to court documents. He was also a major in the U.S. Army Reserves, where he has been enlisted since 2003.

Craffy was responsible for providing general financial education to the surviving beneficiaries, but was prohibited from offering any personal opinions regarding the surviving beneficiary’s benefits decisions, Sellinger said. Craffy acknowledged that he was not permitted to participate personally in any government matter in which he had an outside financial interest. However, without telling the Army, Craffy simultaneously maintained outside employment with two separate financial investment firms.

Craffy used his position as an Army financial counselor to identify and target Gold Star families and other military families, court documents said. He admitted to encouraging the Gold Star families to invest their survivor benefits in investment accounts that he managed in his outside, private employment. 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.

From May 2018 to November 2022, Craffy obtained more than $9.9 million from Gold Star families to invest in accounts managed by Craffy in his private capacity, Sellinger said. Once in control of this money, Craffy repeatedly executed trades, often without the family’s authorization, which earned him high commissions.

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, court documents said.

According to Sellinger, the wire fraud and securities fraud charges are each punishable by a maximum of 20 years in prison; the charge of submitting a false statement on a loan application is punishable by a maximum of two years in prison; the charges of acts affecting a personal interest and false statements to a federal agent are each punishable by five years in prison; all counts but the securities fraud count are also 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.

Craffy's sentencing is scheduled for Aug. 21, Sellinger said. The U.S. Securities and Exchange Commission (SEC) has a pending civil complaint against Craffy based on the same and additional conduct. Craffy has been permanently prohibited from association with any member of the Financial Industry Regulatory Authority Inc.

Sellinger said they will use every means at their disposal to ensure Craffy and others are held accountable for these crimes.

“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," Sellinger said.

Special Agent in Charge Joel Kirch, Department of the Army Criminal Investigation Division, Northeast Field Office, said those who prey on the family members of fallen soldiers will be sought out.

“The hard work, long hours, and dedication of our partners within the Task Force, from the United States Attorney’s Office, Defense Criminal Investigative Service, FBI, Homeland Security Investigations, and our own investigative analyst, resulted in this investigation’s swift resolution," Kirch said. L

Jenna Calderón covers breaking news and cold cases in Monmouth and Ocean counties. Before coming to the Press, she covered The Queen City for Cincinnati Magazine in Ohio. Contact her at 330-590-3903; jcalderon@gannettnj.com

This article originally appeared on Asbury Park Press: Colts Neck financial counselor admits to defrauding Gold Star families