US Army counselor admits stealing millions from the families of dead soldiers in insurance scam

A former US Army financial counselor pleaded guilty to defrauding grieving military families of millions of dollars in life insurance payments.

Victims of Caz Craffy's malicious alleged scam include a teenage girl whose father died, as well as a handful of military widows.

Craffy, 41, may face up to a decade behind bars after pleading guilty to all ten of the charges that were thrown at him, including securities and wire fraud, and making false statements.

In a statement, Attorney General Merrick Garland said: 'Those who target and steal from the families of fallen American servicemembers will be held accountable for their crimes.'

For more than four years from 2018 to 2022, Craffy - of Colts Neck, New Jersey - scammed members of at least 24 Gold Star families into transferring nearly $10million or survivor benefits into private brokerage accounts in his control, according to prosecutors.

Gold Star families are those whose immediately family members die in active duty while serving the country.

Survivors of the fallen can receive up to $500,000 in total post-death benefits. 

The alleged fraudster conducted more than 1,000 unauthorized trades, losing more than $3.4million, and generating more than $1.4million in commissions that he pocketed.

Victims were under the impression that the Army was authorizing Craffy's conduct, when in reality he was a civilian employee of the Army. He is also a major in the US Army Reserve, after enlisting in 2003 - it is unclear if he will receive further punishment via the military justice system.

According to court documents, Craffy traded away nearly two-thirds of a widow's $400,000 investment account meant to fund her children's college education and aging mother's care.

He also stole $50,000 from a 13-year-old girl's retirement account.

The defendant's plea was entered before US District Judge Georgette Castner in Trenton, New Jersey.

He is due to be sentenced on August 21 of this year.

Recommended federal guidelines would put Craffy away for between 97 and 121 months (roughly 8-10 years).

Under the plea deal he entered, Craffy agreed not to appeal a sentence that falls within that range.

He also agreed to pay back his victims, using funds that include the proceeds from selling his home.

In the wake of the discovery of the fraud, Gold Star mom Sharon Hartz said: 'It's unimaginable. He disrespected me. He disrespected my son. My family.; 

Craffy's job as originally intended was to provide basic financial guidance to Army families facing the loss of an immediate family member.

Had he not struck a plea deal, Craffy might've faced several decades in prison, if convicted.

'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,' said AG Garland.

Following Craffy's misdeeds, Washington lawmakers are now pushed through legislation that strengthens the military's oversight of financial counselors who assist the survivors of deceased service members.

The law requires financial counselors employed by the Department of Defense to submit records annually verifying that have 'no conflicts of interest' or 'stand to improperly benefit from their position' when they are hired.

Natasha Bevard, whose husband, Rodney C. Bevard, died by suicide in 2020 after a long military career, has praised the legislation, after committing to ensure 'no other Gold Star family will be taken advantage of financially. Especially at their most vulnerable mental state.'