Army Reserve officer defrauded families of soldiers who died in combat

Carz Craffey (pictured left as a 1st LT in Iraq in 2009) aka Caz Craffy admitted to defrauding Gold Star families. (Army/Twitter)

Matthew Enuco
nj.com
(TNS)

A New Jersey financial counselor and U.S. Army reservist admitted to defrauding Gold Star families who received death benefits after their family members died serving in the military, U.S. officials said Tuesday.

Caz Craffy, 41, of Colts Neck, plead guilty to six counts of wire fraud, one count of securities fraud, making false statements on a loan application, committing acts affecting a personal financial interest and making false statements to a federal agency.

Craffy, also known as “Carz Craffey” was indicted in June 2023 after investigators accused him of targeting families of deceased veterans and collecting millions in commissions on trades in financial securities without the approval of his clients.

“Those who target and steal from the families of fallen American service members will be held accountable for their crimes,” Attorney General Merrick B. Garland said in a press release.“Nothing can undo the enormous loss that Gold Star families have suffered, but the Justice Department is committed to doing everything in our power to protect them from further harm.”

Craffy was a major in the U.S. Army reserves having been enlisted since 2003 and also worked as a civilian employee of the U.S. Army at Joint Base McGuire-Dix-Lakehurst from November 2017 through January 2023 as a financial counselor, authorities said.

Gold Star families, families of military veterans that died while on active duty are entitled to $100,000 plus up to $400,000 in service member life insurance, officials with the U.S. District Attorney’s office said in a press release.

As a civilian financial counselor, Craffy was responsible for offering general financial education to families receiving death benefits and was prohibited from providing personal opinions on what to do with those benefits, officials said.

Craffy acknowledged that he was prohibited from personally participating in any government matter that he had an outside financial interest in, yet he maintained outside employment with two financial firms from Point Pleasant Beach and Boca Raton, Florida, authorities said.

The financial firms paid commissions to Craffy based on the size and volume of trades, not whether they earned money or not and were paid out of the accounts on whose behalf the trades were made, prosecutors said in the indictment.

Craffy admitted that he encouraged families to invest benefits in accounts he managed in his outside, private employment, officials said.

Between May 2018 and November 2022, Craffy collected more than $9.9 million from Gold Star families to invest through accounts he managed in his private capacity and made trades without prior consent which violated both financial firms’ policies, officials said.

The Post asked an independent personal finance expert, Carolyn McClanahan, “to review dozens of pages from the families’ account statements showing trades Craffy made over two-plus years. She said the documents point not only to a pattern of churning but also to risky purchases of speculative assets, including cryptocurrency and hyperinflated “meme stocks” GameStop and AMC. Taken together, McClanahan said, the activity shows the fundamental failures of a broker to put the investors’ best interests first”

Craffy earned over $1.4 million in commissions for the unauthorized trades, authorities said, which resulted in losses totaling more than $3.7 million.

An attorney for Craffy did not immediately respond to a request for comment Tuesday.

Sentencing is scheduled for Aug. 21, 2024.

©2024 Advance Local Media LLC. Visit nj.com. Distributed by Tribune Content Agency, LLC.

Post navigation