Former financial counselor Caz Craffy has pleaded guilty to defrauding Gold Star families out of millions of dollars worth of life insurance payments. He has entered his plea for 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. If found guilty, he could spend 8 to 10 years in prison under recommended federal guidelines, and he has agreed not to appeal a sentence up to that range and to make full restitution.
Gold Star families are entitled to a $100,000 payment and the servicemember’s life insurance of up to $400,000 when a member of the armed forces dies during active duty. Court documents revealed that from November 2017 to January 2023, Craffy targeted these vulnerable families while providing general financial education to them. Attorney General Merrick Garland stated that while nothing can undo the enormous loss Gold Star families have suffered, the Justice Department is committed to protecting them from further harm.
As an employee of the Army and a major in the Army Reserve, Craffy worked as a financial counselor with the Casualty Assistance Office. He was prohibited from offering any personal opinions regarding the beneficiaries’ money and was not allowed to participate personally in any government matter in which he had an outside financial interest. Despite these restrictions, Craffy admitted that he encouraged Gold Star families to invest in accounts he managed in his outside employment with two separate financial investment firms, leading to significant losses for the beneficiaries.
Between May 2018 and November 2022, Craffy defrauded Gold Star families of more than $9.9 million by conducting unauthorized trades and earning high commissions. The families believed that these investments were authorized by the Army, but Craffy used the money for his personal gain. As a result, Gold Star family accounts lost over $3.7 million, while Craffy earned more than $1.4 million in commissions taken from their accounts. Acting Special Agent in Charge William S. Walker of Homeland Security Investigations (HSI) Newark stated that Craffy disgraced his entrusted position to care for military families and took advantage of them during a vulnerable time of grief.
Caz Craffy entered his guilty plea before US District Judge Georgette Castner in Trenton, New Jersey and is scheduled to be sentenced on August 21. If found guilty, he could face 8 to 10 years in prison based on recommended federal guidelines. In addition to his guilty plea, Craffy has agreed not to appeal a sentence up to that range and to make full restitution to the Gold Star families he defrauded. The case highlights the vulnerability of grieving families who are entitled to life insurance payments and the importance of protecting them from financial exploitation during such difficult times. Attorney General Merrick Garland emphasized the Justice Department’s commitment to protecting Gold Star families from further harm.
