Joint Base financial advisor accused of defrauding Gold Star families
TRENTON - A civilian employee at a South Jersey military base is accused of pocketing $1.4 million through a scheme that targeted the survivor benefits of Gold Star families.
Caz Craffy, a financial consultant at Joint Base McGuire-Dix-Lakehurst also allegedly caused losses of about $3.4 million for people he was supposed to be helping, said Philip Sellinger, U.S. Attorney for New Jersey.
Craffy used his position as an Army financial counselor "to fraudulently induce Gold Star families to invest in financial firms that he secretly worked for," Sellinger said in announcing a 10-count indictment on Friday.
He claimed Craffy "preyed upon these vulnerable families who were dealing with a tragedy born out of their loved one’s patriotism."
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Craffy also faces a lawsuit from the U.S. Securities and Exchange Commission, which is seeking a court order requiring him to "disgorge any ill-gotten gains."
Craffy, a 41-year-old Colts Neck resident also known as Carz Craffey, worked at the Burlington County base from November 2017 to January 2023.
He also was a major in the Army reserves, where he'd been enlisted since 2003, court filing say.
Joint Base advisor was supposed to help Gold Star families
Sellinger noted survivor benefits can total up to $500,000 when a member of the military dies on active duty.
He said Craffy was expected to provide a "general financial education" to Gold Star families as part of their survivor benefits.
He noted Craffy was prohibited from offering personal opinions or from participating in any government matter in which he had an outside financial interest.
"But he did it anyway," Sellinger said in a statement that alleged Craffy worked "surreptitiously for two outside financial investment firms.
Craffy allegedly concealed the full-time jobs from both the military and the Gold Star families.
An attorney for Caffrey could not be reached for immediate comment.
A 10-count indictment accuses him of wire fraud, securities fraud, making false statements and having a criminal conflict of interest.
It says Craffy caused about 29 people to transfer almost $10 million in survivor benefits to accounts that he controlled.
According to the SEC lawsuit, Craffy sometimes duped victims "by falsely stating or misleadingly implying that they were required to do so to take advantage of certain benefits."
It also alleges the advisor engaged in more than 1,000 trades without his customers' authorization.
Feds: Investments soured, but advisor made money
Although the investments often dropped sharply in value, Craffy made money through commissions on the transactions, the indictment says.
The commissions were paid with funds from the survivor benefits, the statement noted.
Craffy is accused of targeting victims he was assigned to work with and others that he sought out using his access to military databases.
As an advisor registered with the Financial Industry Regulatory Authority, Craffy "had a duty to act in the best interests of the people he advised.," the statement said.
But it alleged Craffy had victims sign documents that said, without their knowledge, that they wanted an aggressive investment policy. He also failed to get required authorizations from his victims.
When families asked about finances, Craffy allegedly told them not to check their account statements or gave excuses for disappointing results.
In one instance in April 2022, the SEC lawsuit asserts, a client's daughter inquired about the status of an account, Craffy allegedly answered, "Don’t ask! Just let me do the work for a few months!"
Jim Walsh is a senior reporter with the Courier-Post, Burlington County Times and The Daily Journal. Email him at jwalsh@cpsj.com.
This article originally appeared on Cherry Hill Courier-Post: Caz Craffy accused of defrauding Gold Star families
