An Army reservist who scammed Gold Star families — particularly grieving wives and mothers who spoke little English — will spend more than 12 years in prison. New Jersey Army Reservist Caz Craffy bilked over $10 million from grieving families, most with minimal financial literacy and many of whom were immigrants, the lawyer representing the families told Task & Purpose.
An FBI agent who worked on the case said, “heartless and despicable don’t even begin to sum up his crimes.”
Craffy, also known as Carz Craffey, admitted in April to defrauding Gold Star families when he tricked them into putting $10 million into an investment scheme, lost $3.7 million of it on risky financial bets, and kept $1.4 million for himself, according to the Department of Justice. Craffy admitted that he convinced the families that the financial investments were approved by the Army.
A federal judge sentenced Craffy to 151 months Wednesday.
“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,” said U.S.. Attorney Philip R. Sellinger.
A lawyer who represented the families told Task & Purpose in April that Craffy focused specifically on family members — mostly wives and mothers of dead soldiers — who would trust him.
“I believe the victims, the majority being female dependents of the deceased service members, were targeted by Caz Craffy,” said Natalie Khawam, who represented more than a dozen Gold Star families caught up in Craffy’s scams. “It’s horrific that he took advantage of their lowest, most vulnerable moments knowing they were naive regarding the financial fraud that he engaged in,”
According to the Department of Justice, Craffy, 42, of Colts Neck, New Jersey, was charged with 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.
“Craffy made a conscious decision to defraud Gold Star families suffering from losing their loved one who paid the ultimate sacrifice serving this country,” FBI – Newark Special Agent in Charge James E. Dennehy said. “The money these survivors are given does nothing to ease their suffering. It does, however, help with the burdens they face, such as paying off a mortgage or putting their children through college. They believed Craffy was acting in their best interest, but instead, he was using their money as a method to make his own.”
Millions in losses, millions more in fees
To pull off his scam, Craffy worked to put himself into three different positions within the military’s family support network — position that should be filled by different individuals.
When a member of the Armed Services dies during active duty, thier surviving beneficiary is entitled to a $100,000 payment and the servicemember’s life insurance of up to $400,000. Families generally receive these payments within weeks of a member’s death. The military connects families with a financial counselor — one the roles that Craffy played and which put him in front of vulnerable families looking for help.
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. He was also a major in the U.S. Army Reserve responsible for providing general financial education to the surviving beneficiaries. However, without telling the Army, Craffy simultaneously maintained outside employment with two separate financial investment firms.
As the financial counselor, Craffy pushed Gold Star families and other military families to invest their survivor benefits in investment accounts that he directly managed as the outside investment advisor — an illegal conflict of interest.
“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,” the DOJ said in a response.
From May 2018 to November 2022, Craffy took in $9.9 million from Gold Star families and executed trades, often without the family’s authorization, that earned him high fees, regardless of if the families made or lost money.
And they mostly lost. The Gold Star family accounts lost more than $3.7 million, the DOJ said, while Craffy kept $1.4 million in commissions.
In addition to the prison term, Craffy was sentenced to three years of supervised release and ordered forfeiture of $1.4 million. Restitution will be determined at a later date.