Caz Craffy, a former Army financial counselor, has been sentenced to over 12 years in prison for orchestrating a fraud scheme that targeted Gold Star families. The case has shed light on the vulnerabilities of military families during times of grief and loss.
Craffy, 42, exploited his position as an Army civilian employee to illegally recruit families as clients for a brokerage firm where he worked on the side. He urged these families to invest their life insurance payouts in high-risk trades with excessive commissions.
The fraud affected 24 families, resulting in a cumulative loss of $3.7 million. Craffy personally gained $1.4 million in commissions from these illegal activities. The Army failed to detect this criminal enterprise, which began in 2018, just a year after Craffy was hired as a survivor outreach financial counselor.
Prosecutors revealed that Craffy not only targeted families he was assigned to assist but also searched military databases to find additional victims. He leveraged his Army credentials, sometimes meeting families in his Army Reserve officer uniform, to gain their trust.
"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."
The Servicemembers' Group Life Insurance (SGLI) program, which provides life insurance to military members, typically offered $400,000 payouts at the time of Craffy's crimes. This amount was increased to $500,000 in 2023, with an additional $100,000 available for immediate expenses and income loss.
The Department of Defense employs about 400 counselors to provide financial guidance to service members and their families. These counselors are meant to educate clients on benefits and estate planning, not recommend specific investments.
Individual losses for the affected families ranged from $6,300 to over $375,000. Craffy's indifference to mounting losses was attributed to his commission-based earnings.
As of August 2024, Craffy remains an officer in the Army Reserve, though additional punishments under the Uniform Code of Military Justice may be forthcoming.
In response to this case, Representatives Mikie Sherrill and Don Bacon introduced bipartisan legislation requiring the Defense Department to enhance vetting procedures for military financial counselors. This bill became law in 2023, demonstrating the swift legislative action taken to prevent similar incidents in the future.
The sentencing of Caz Craffy serves as a stark reminder of the importance of protecting vulnerable military families and ensuring the integrity of support systems designed to assist them during times of loss and grief.