SEC bars New Jersey advisor after $9.9M fraud against Gold Star families

A New Jersey-based advisor who defrauded military families out of millions has been barred from the securities industry, following a multi-year scheme that targeted some of the nation’s most vulnerable.

The Securities and Exchange Commission announced Thursday that it had permanently barred Caz L. Craffy, also known as Carz Levinski Craffey, after he was found to have manipulated grieving Gold Star families and other military households for personal gain.

Craffy, 42, of Colts Neck, New Jersey, served as a US Army financial counselor from 2017 to 2023, a role that included advising families who had lost loved ones in active duty. At the same time, he was employed as a registered representative at multiple broker-dealers.

According to the SEC, Craffy used his position to persuade families to transfer survivor and insurance benefits – sometimes as much as $500,000 – into brokerage accounts he managed privately. Once in control of the funds, he engaged in unauthorized and unsuitable trading, often concentrating investments in a small number of stocks and exposing clients to excessive risk.

A 2023 complaint by the SEC against Craffy detailed how his actions generated more than $1.64 million in fees and commissions, most of which he kept, while the families’ accounts suffered realized losses of about $1.79 million and additional unrealized losses of approximately $1.8 million. In one instance, Craffy misappropriated $50,000 from the IRA account of a minor child whose parent had died on active duty.

On April 16, 2024, Craffy pleaded guilty to multiple federal charges, including wire fraud, securities fraud, and making false statements.

He was sentenced last August to 151 months – more than twelve years – in federal prison and ordered to pay over $4 million in restitution. The Department of Justice statement announcing the punishment said Craffy admitted to targeting Gold Star families and other military households, ultimately obtaining more than $9.9 million through his scheme.

“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 at the time. “The lengthy term of imprisonment imposed today is just punishment for this heinous and shameless crime.”

Under the SEC’s order Thursday, Craffy is barred from associating with any broker, dealer, RIA, or other regulated financial entities, and is also prohibited from participating in any penny stock offerings. Any future application for reentry into the industry would be subject to strict regulatory scrutiny and conditions.