Barred broker faces 12-year sentence for defrauding Gold Star families

A former financial counselor for the US Army and current Army Reserve major has been sentenced to over 12 years in prison for defrauding families of deceased service members out of more than $1 million, according to the Department of Justice.

In a statement Wednesday, the Attorney’s Office for the District of New Jersey said that the counselor, Caz Craffy, 42, of Colts Neck, New Jersey, admitted to swindling Gold Star families and engaging in various other criminal activities over several years.

The statement explained that Craffy worked as a financial counselor for the Army’s Casualty Assistance Office from November 2017 to January 2023. His role involved advising surviving beneficiaries of deceased service members, primarily Gold Star families.

“When a member of the Armed Services dies during active duty, his or her surviving beneficiary, now 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,” the Justice Department said. “These payments are disbursed to the beneficiary in a matter of weeks or months following the servicemember’s death.”

Craffy was supposed to provide his guidance on financial matters without giving personal opinions or engaging in transactions involving his own financial interests.

However, he violated these restrictions by secretly maintaining outside employment with two investment firms, including the now-defunct Monmouth Capital, using his position to convince Gold Star families to invest nearly $10 million in accounts he privately managed.

From May 2018 to November 2022, the brokerage accounts he managed suffered $3.7 million in losses, while Craffy personally pocketed more than $1.4 million.

He was permanently barred by Finra in December 2022, according to his BrokerCheck profile, and was subsequently charged by the SEC for his fraudulent actions in July 2023.

Craffy, who pleaded guilty in April, faced charges including wire fraud, securities fraud, and making false statements.

US District Judge Georgette Castner handed down the 151-month sentence on Wednesday at a federal courthouse in Trenton.

“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,” US Attorney Philip R. Sellinger said in Wednesday’s statement.

"The lengthy term of imprisonment imposed today is just punishment for this heinous and shameless crime," he said.

FBI Newark Special Agent in Charge James E. Dennehy, meanwhile, condemned Craffy’s actions as “heartless and despicable.”

“[The victims] believed Craffy was acting in their best interest, but instead, he was using their money as a method to make his own.” Craffy also received three years of supervised release and was ordered to forfeit $1.4 million in illicit earnings. Restitution for the victims is yet to be determined.