A former financial advisor for the U.S. Army received a prison sentence exceeding 12 years on Wednesday after confessing to defrauding families of deceased soldiers out of millions via a life insurance scheme, as reported by the U.S. Attorney’s Office.

Caz Craffy, 42, from Colts Neck, New Jersey, was given a sentence of 151 months after pleading guilty in April to multiple counts of wire fraud and related offenses, including securities fraud, submitting false statements on a loan application, and making misleading statements to a federal agency.

Craffy worked as a civilian Army employee from November 2017 to January 2023, serving as a financial counselor at the Casualty Assistance Office. According to the U.S. Attorney’s Office for the District of New Jersey, his role involved providing general financial guidance to the surviving family members of service members who died while on duty.

Families of fallen service members, known as Gold Star families, are eligible for a payment of $100,000 and up to $400,000 from the service member’s life insurance, which is released over time after the service member’s death. Prosecutors indicated that Craffy specifically targeted these families and other military families, defrauding them out of large sums of money.

In addition to prison time, Craffy will undergo three years of supervised release and has been ordered to forfeit $1.4 million, according to the U.S. Attorney’s Office.

“Caz Craffy was sentenced today for shamelessly exploiting his role as an Army financial advisor, taking advantage of grieving families of our servicemen and servicewomen during their most vulnerable time,” stated U.S. Attorney Philip R. Sellinger.

“These Gold Star families have made profound sacrifices for our freedom and deserve our deepest respect, compassion, and a dependable financial future from a grateful nation. No amount of money can erase their profound loss. Instead of providing support, Caz Craffy opted to deceive these valorous families,” Sellinger emphasized.

Former U.S. Army financial advisor diverted over $9.9M for personal trading

As per court records, Craffy was barred from giving personal investment advice to beneficiaries as an Army financial counselor. However, he also worked simultaneously for two different financial investment firms during his tenure with the Army, court documents disclosed.

Craffy acknowledged that he persuaded Gold Star families to invest their benefits into accounts he managed without informing the Army.

“Due to Craffy’s deceitful representations and the lack of proper disclosures, most Gold Star families mistakenly thought that Craffy’s management of their funds was sanctioned by the Army,” stated the U.S. Attorney’s Office.

Prosecutors revealed that Craffy controlled over $9.9 million from Gold Star families in accounts he managed privately between May 2018 and November 2022. He then utilized this money to make trades without obtaining the families’ consent.

Craffy gained substantial commissions from these unauthorized trades, as per the U.S. Attorney’s Office. Documents indicate that Gold Star families suffered losses exceeding $3.7 million during this scheme, while Craffy amassed over $1.4 million in commissions.

“The funds these families receive do little to diminish their grief. Nonetheless, they are crucial in alleviating their financial burdens, such as repaying a mortgage or funding their children’s education,” stated FBI – Newark Special Agent in Charge James E. Dennehy. “They believed Craffy was acting in their best interests, but in reality, he was exploiting their funds for his personal gain. His actions were utterly heartless and reprehensible.”