Caz Craffy Sentenced for Fraud Targeting Military Families in $9.9M Scheme

Who Is Caz Craffy?

Caz Craffy (CRD#: 5222223), also known as Carz Craffey, was a financial advisor for the U.S. Army and a major in the U.S. Army Reserves. Through his work with the Army Casualty Assistance Office, Craffy was responsible for providing financial guidance to Gold Star families — those who lose loved ones in active duty. These families are typically eligible to receive up to $500,000 in combined survivor benefits, including a $100,000 death gratuity and $400,000 life insurance payout.

Unbeknownst to the Army, Craffy simultaneously worked for two private brokerage firms — Monmouth Capital Management and Newbridge Securities — while serving as a military financial advisor. Monmouth Capital was later expelled by FINRA due to his misconduct. In 2023, FINRA barred Craffy from the securities industry entirely.

How Craffy Defrauded Military Families

Craffy’s conduct is considered a form of affinity fraud, in which a fraudster targets a trusted or vulnerable community — in this case, grieving military families who believed his guidance was officially sanctioned by the U.S. Army. Military financial counselors are prohibited from managing personal investments for families precisely to avoid such conflicts of interest.

The Fraud’s Key Details:

• Misappropriated Funds: Between May 2018 and November 2022, Craffy diverted more than $9.9 million in survivor benefits from at least 20 Gold Star families into brokerage accounts he personally controlled.
• Significant Investor Losses: Families suffered losses exceeding $3.7 million as a result of the unauthorized and excessive trading Craffy conducted.
• Unauthorized Trading: Craffy executed trades frequently and without client permission — a practice known as churning — to generate higher commissions.
• Personal Enrichment: While families faced financial harm, Craffy personally collected over $1.4 million in commissions from the trades.

SEC and Criminal Charges

The U.S. Securities and Exchange Commission (SEC) and federal prosecutors charged Craffy with multiple counts of fraud, including wire fraud, securities fraud, and making false statements. On August 21, 2024, he was sentenced to 151 months in federal prison, followed by three years of supervised release. He was also ordered to pay $1.48 million in forfeiture and $4.08 million in restitution to the affected families.

The charges to which Craffy pleaded guilty included:

• Six counts of wire fraud
• Securities fraud
• Making false statements in a loan application
• Committing acts affecting a personal financial interest
• Making false statements to a federal agency

Recent Regulatory Actions and Customer Disputes Involving Caz Craffy

In addition to his criminal conviction, Caz Craffy has faced numerous regulatory actions and customer disputes connected to his misconduct:

• December 8, 2022: FINRA barred Craffy indefinitely after he refused to produce requested information and documents or appear for testimony during an investigation into potential conversion of customer funds, improper loans or gifts, and undisclosed outside business activities.
• May 22, 2023: The New Jersey Bureau of Securities expelled Craffy from a self-regulatory organization for violations of securities regulations.
• July 7, 2023: The SEC filed a complaint alleging that Craffy violated federal securities laws and Regulation Best Interest by exploiting at least 29 Gold Star families and other clients between 2017 and 2023. The complaint outlined unauthorized trading, misappropriation of client funds, and failure to disclose conflicts of interest.
• May 9, 2024: A customer filed a dispute alleging breach of fiduciary duty, negligence, failure to supervise, and common law fraud, seeking $100,000 in damages.
• July 24, 2025: The SEC issued a permanent bar against Craffy following a final judgment that permanently enjoined him from future securities law violations. The Commission found that he repeatedly placed his own financial interests above his clients’, executing unauthorized trades and concentrating client assets in unsuitable investments.

These actions show a long pattern of regulatory violations and customer harm that extended beyond his Army employment.

Legal Options for Affected Investors

Investors who have suffered financial losses due to broker misconduct, negligence, or fraud may be able to recover their losses through legal action. Common claims include:

• Negligence: When a broker fails to act with reasonable care or makes unsuitable recommendations.
• Breach of Fiduciary Duty: When an advisor prioritizes their own commissions or profits over the client’s best interests.
• Misrepresentation: When key facts about an investment are concealed or distorted.

Most brokerage firms require customer disputes to be resolved through arbitration, a process that allows investors to present evidence of misconduct and seek compensation before a neutral panel of arbitrators.

How Meyer Wilson Werning Helps Defrauded Investors

The case of Caz Craffy is a tragic reminder of how deeply investors can be harmed when financial advisors exploit positions of trust. At Meyer Wilson Werning, we represent victims of broker misconduct, fraud, and supervisory failures. Our team investigates how financial products were sold and holds brokerage firms accountable when their supervision fails to protect clients from fraud or negligence.

If you suffered losses due to fraudulent or unsuitable investment recommendations, contact us today for a free consultation. Our attorneys can review your situation, explain your recovery options, and help you pursue justice through arbitration or other legal channels.

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