Gold Star family fraudster sentenced for $10M scheme

A Monmouth County man received his sentence in Trenton federal court last week, stemming from a $10 million scheme to defraud Gold Star families.

As NJBIZ reported in April, Caz Craffy (aka Carz Craffey), 41, of Colts Neck, pleaded guilty before US District Judge Georgette Castner to a multicount indictment that included wire fraud, securities fraud and more. Appearing again Aug. 21, Castner sentenced Craffy to 151 months in prison, three years of supervised release and ordered forfeiture of $1.4 million. Restitution will be determined at a later date.

US Attorney for New Jersey Philip Sellinger announced the sentencing last week. Prosecutors charged Craffy – a former financial counselor with the United States Army and a major in the US Army Reserve since 2003 – of abusing his position in the Casualty Assistance Office.

Craffy took advantage of Gold Star families, encouraging them to invest their survivor benefits in investment accounts that he managed in his foreign, private employment, according to the charges.

“From May 2018 to November 2022, Craffy obtained more than $9.9 million from Gold Star families to invest in accounts managed by Craffy in his private capacity,” according to case documents and court statements released by prosecutors. “Once in control of this money, Craffy repeatedly executed trades, often without the family’s authorization. These unauthorized trades earned Craffy high commissions. During the timeframe of the scheme, the Gold Star family accounts lost more than $3.7 million, while Craffy personally earned more than $1.4 million in commissions – drawn from the family accounts.”

Craffy also faces a pending civil complaint based on the same and additional alleged conduct from the US Securities and Exchange Commission (SEC).

He has been permanently prohibited from associating with any member of the Financial Industry Regulatory Authority Inc. (FINRA).

‘Brazenly taking advantage’

“Caz Craffy was sentenced to prison 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 Sellinger.

The US Attorney said that these Gold Star families have laid the dearest sacrifice on the altar of freedom.

“And they deserve our utmost respect and compassion, as well as some small measure of financial security from a grateful nation,” said Sellinger. “No amount of money can undo their enormous loss. Instead of offering guidance, Caz Craffy chose to defraud these heroic families. The lengthy term of imprisonment imposed is just punishment for this heinous and shameless crime.”

FBI Newark Special Agent in Charge James Dennehy said “heartless” and “despicable” do not even begin to add up to the crimes.

“Craffy made a conscious decision to defraud Gold Star families suffering from losing their loved one who paid the ultimate sacrifice serving this country,” said Dennehy. “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.

“Those who prey on the family members of fallen soldiers, will be sought out and held accountable,” said Special Agent in Charge Joel Kirch, Department of the Army Criminal Investigation Division, Northeast Field Office. “The hard work, long hours, and dedication of our partners within the Task Force, from the United States Attorney’s Office, Defense Criminal Investigative Service, FBI, Homeland Security Investigations, and our own investigative analyst, resulted in this investigation’s swift resolution.”

An attorney representing Craffy had no comment about the sentence.

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