The counselor, identified as Caz Craffy, also known as Carz Craffey, could face a prison sentence spanning decades for his actions.
The U.S. Department of Justice (DOJ) announced on Tuesday that Craffy pleaded guilty to six counts of wire fraud, 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, a 41-year-old resident of Colts Neck, New Jersey, is set to be sentenced on August 21 in district court. The maximum penalties for his charges include 20 years in prison for each count of wire fraud and securities fraud, and five years for the remaining charges. The DOJ also stated that Craffy could be ordered to pay fines amounting to $7 million, twice the amount his victims lost in the financial scam.
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From November 2017 to January 2023, Craffy served as a financial counselor with the Casualty Assistance Office in the Army, where he was tasked with educating the surviving beneficiaries of soldiers killed in action about their financial options. These beneficiaries, known as Gold Star families, could be entitled to as much as $500,000 from the military. In addition to his advisory role, Craffy also held the rank of major in the U.S. Army Reserves.
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However, authorities have revealed that Craffy, despite being prohibited from offering advice based on personal opinions, secretly operated a private investment firm. He persuaded the Gold Star families to invest their survivor benefits in accounts he managed without informing the Army.
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The families, under the impression that Craffy's guidance was approved by the military, unknowingly allowed him to divert more than $9.9 million of their benefits into accounts used for unauthorized trades. Craffy earned commissions from these trades, which were not always in the beneficiaries' best interests. The scheme resulted in Gold Star families losing over $3.7 million, while Craffy pocketed more than $1.4 million in commissions. He admitted to these allegations as part of his guilty plea, according to the DOJ.
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Craffy was indicted in July last year for defrauding 20 Gold Star military families. Gurbir Grewal, director of the SEC Division of Enforcement, stated that Craffy had "abused" his positions within the Army network "to manipulate grieving family members into transferring their life insurance and family survivor benefits ... into brokerage accounts he managed," as reported by CBS New York.
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This case serves as a stark reminder of the importance of vigilance and transparency in financial dealings, particularly those involving vulnerable individuals. The military families, who had already suffered the loss of their loved ones, were further victimized by a trusted advisor who exploited their grief for personal gain. As the legal proceedings continue, the hope remains that justice will be served for the affected families.
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