A financial counselor for the U.S. Army has been accused of defrauding the families of fallen military personnel out of millions of dollars in death benefits. Caz Craffy, a 41-year-old resident of Colts Neck, N.J., had been assigned to the U.S. Army’s Casualty Assistance Office at Joint Base McGuire-Dix-Lakehurst.
According to court documents, financial counselors like Craffy are limited to sharing general financial strategies and are not allowed to work for external investment firms or play a direct role in the families’ investments.
However, prosecutors allege that Craffy violated these restrictions by working for two outside investment firms, Newbridge Securities Corp. and Monmouth Capital Management, LLC. He allegedly redirected $9.9 million from 29 families, who had received benefits, into these firms without their consent.
Investigators further claim that Craffy engaged in excessive trading of the families’ funds, often executing trades without permission. This practice, known as churning, allowed him to earn substantial commissions on each trade while causing significant losses for the affected families.
Between 2017 and early 2021, prosecutors assert that Craffy accumulated $1.4 million in commissions from his investments, while the families suffered losses surpassing $3.4 million. The extent of his alleged fraudulent actions has shocked the military community and raised concerns over the protection of Gold Star families’ financial well-being.
The case against Craffy highlights the importance of ensuring ethical conduct and accountability within financial counseling services provided to military families. Legal action aims to bring justice to the victims and prevent similar incidents from occurring in the future.
Stealing from Gold Star Families: A Shameful Crime
In a recent statement, Attorney General Merrick Garland described the act of stealing from Gold Star families as a shameful crime. These families, who have already lost loved ones in service to our nation, typically receive substantial compensation to help alleviate their financial burdens. Life insurance payments of up to $400,000 are coupled with an additional $100,000 to make up for any lost income.
However, prosecutors have uncovered a disheartening scheme wherein a man named Craffy took advantage of the families’ vulnerability and lack of financial knowledge. He convinced them to grant him discretion over their investments, subsequently disregarding their requests for conservative investment strategies.
To make matters worse, many of the beneficiaries were minors at the time. This only adds to the outrage caused by Craffy’s actions.
Craffy now finds himself in custody after being charged with wire and securities fraud. The Securities and Exchange Commission has also initiated civil litigation against him for similar offenses. At present, it remains unclear whether Craffy has secured legal representation.
In light of these events, Finra made the decision to expel Monmouth Capital from its ranks due to their involvement in common practices of “churning.” This term refers to an unethical practice prevalent within the firm. It is important to note that Finra had previously barred other brokers associated with Monmouth Capital from the industry.
If convicted, Craffy could face up to 20 years in prison for each count of fraud, as well as fines of up to $250,000. This serves as a reminder that justice must prevail in cases where individuals exploit the vulnerability of Gold Star families.