Ex-Army Counselor Jailed for $3.7M Fraud Against Gold Star Families

Caz Craffy, a former Army financial counselor, has been sentenced to more than 12 years in prison for orchestrating a fraud scheme that targeted Gold Star families. The case, which involved the misappropriation of life insurance funds, has been described by officials as a shocking abuse of grieving widows and children.

Craffy, 42, exploited his position as an Army civilian employee to illegally recruit families as clients for a brokerage firm where he worked part-time. He urged them to invest their insurance payouts in high-risk trades with excessive commissions, resulting in cumulative losses of $3.7 million for 24 families. The fraudulent activities netted Craffy $1.4 million in commissions.

The scope of the fraud was extensive, with individual losses ranging from $6,300 to over $375,000. Craffy gained the trust of his victims by leveraging his Army credentials, often meeting them in uniform as an Army Reserve officer. Some families mistakenly believed his investment guidance was authorized by the military.

Philip R. Sellinger, the U.S. Attorney for the District of New Jersey, stated:

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

The case has led to legislative action. Representatives Mikie Sherrill and Don Bacon introduced a bill requiring the Defense Department to enhance vetting procedures for military financial counselors, which became law in 2023.

At the time of Craffy's criminal activities, military life insurance payments were typically $400,000. This amount was increased to $500,000 in 2023, with an additional $100,000 available to cover immediate expenses and loss of income.

Craffy remains an officer in the Army Reserve, though it is unclear what additional punishments he might face. The Army Reserve has stated its commitment to holding personnel accountable for conduct that does not align with Department of Defense and Army policies.

This case highlights the importance of proper oversight and vetting in financial counseling services provided to military families, especially those dealing with the loss of a loved one in service to their country.