Caz Craffy, a New Jersey financial advisor and U.S. Army financial counselor, today was sentenced to more than 12 years in prison for defrauding at least 29 Gold Star families, including a 13-year-old whose parent died while serving in the military, according to law enforcement officials.

Craffy, 41, of Colts Neck, in April pleaded guilty to six counts of wire fraud and single counts for securities fraud, making false statements in a loan application, and making false statements to a federal agency, the U.S. Attorney’s Office said in a press release. He made the plea in the U.S. District Court in Trenton, N.J.

From November 2017 through January 2023, Craffy was a full-time, civilian employee of the U.S. Army, working as a financial counselor who assisted the families of service members who had died while on active duty. Included in the benefits for those who died were a $100,000 payment and $400,000 in life insurance, often disbursed within weeks, according to the U.S. Attorney’s Office.

His victims included a 13-year-old child whose parent died while on active duty, according to the U.S. Securities and Exchange Commission (SEC).

In his position, Craffy was responsible for providing general financial education to the grieving families but was prohibited from giving his personal opinion about what the beneficiaries should do with their benefit. He also was prohibited from participating in his work if he held any conflicting outside financial interest.

At the same time as he worked in this capacity, Craffy also worked for two financial investment firms, Newbridge Securities Corp. and Monmouth Capital Management, according to BrokerCheck, a fact that he appeared not to share with the U.S. Army.

“Craffy used his position as an Army financial counselor to identify and target Gold Star families and other military families. He admitted to encouraging the Gold Star families to invest their survivor benefits in investment accounts that he managed in his outside, private employment,” the press release said. “Based upon Craffy’s false representations and omissions, the vast majority of the Gold Star families mistakenly believed that Craffy’s management of their money was done on behalf of and with the Army’s authorization.”

According to the U.S. Attorney’s Office, between May 2018 and November 2022, Craffy misled at least 29 Gold Star families into giving him $9.9 million to invest on their behalf. He then executed unauthorized trades with the assets that would generate commissions. During these trades, the Gold Star family accounts lost more than $3.7 million, while Craffy made more than $1.4 million, the release said.

In addition to the prison term, Craffy was ordered to forfeit $1.4 million and will serve three years of supervised release.

The Financial Industry Regulatory Authority permanently barred Craffy on December 8, 2022, saying he refused to participate in the authority’s investigation of his activities following a customer complaint, according to BrokerCheck.

On July 7, 2023, the SEC launched a parallel civil complaint against Craffy, noting that one of the Gold Star family members defrauded was a 13-year-old whose parent had died while on active duty and whose $50,000 inheritance was misappropriated by Craffy.

“Craffy further exposed several of his customers to large losses by failing to comply with the care obligation imposed on all brokers by Regulation Best Interest,” the SEC said. “Craffy knew that his customers' primary investment goals were often to preserve their funds, including for short-term uses like paying for educational expenses or their retirement. But Craffy engaged in excessive trading in at least four of his customers' securities accounts, depleting their funds through fees and commissions that largely benefited him personally.”

As a result, Craffy’s customers had $1.79 million in realized losses and $1.8 million in unrealized losses, the SEC said. About $1.64 million of the realized losses were fees and commissions to Craffy, the SEC claimed.