Ex-Army Finance Counselor Swindled Gold Star Families, U.S. Says
2023/07/12

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Caz Craffy, a former U.S. Army financial counselor, has been charged with wire and securities fraud for defrauding two dozen Gold Star families out of life insurance and other benefits. The scheme involved steering the families towards investments that earned him substantial commissions while resulting in $3.4 million in investment losses for the families. Attorney General Merrick B. Garland referred to this crime as "a shameful act" of stealing from families who had already made significant sacrifices for their nation.

In addition to criminal charges, Mr. Craffy also faces a civil complaint filed by the Securities and Exchange Commission.

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Mark Berman, his lawyer, declined to comment on the matter. The charges against Craffy were announced after The Washington Post published an article in February highlighting complaints from several families about his actions. This led federal lawmakers to introduce legislation aimed at improving the screening process for financial counselors employed by the Defense Department to prevent conflicts of interest.

As an Army employee and Army Reserve member, Craffy's role as a financial counselor was to provide general financial education to veterans' beneficiaries, particularly those grieving the loss of their loved ones.

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However, he violated Army regulations by working for two private financial investment firms without proper disclosure. Prosecutors revealed that Craffy targeted Gold Star families, using his access to military databases to identify and contact them directly. His tactics involved convincing families to invest in accounts he managed privately, executing trades without authorization and collecting significant commissions.

When families questioned the performance of their investments, Craffy discouraged them from checking their account statements or provided excuses for the poor results. The indictment states that his objective was personal enrichment, as he profited regardless of the success or failure of the investments.

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Philip R. Sellinger, the U.S. attorney for New Jersey, highlighted that Craffy "got paid either way" and prioritized his own gains over the well-being of the families he was supposed to assist.

The Army has acknowledged the seriousness of these improprieties and expressed its commitment to reviewing policies and procedures to ensure that financial counselors adhere to ethical standards required by law, policy, and their respective certifications. The charges against Craffy and the subsequent investigations serve as a reminder of the importance of safeguarding the interests of military families and preventing such fraudulent activities in the future.

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