Ex-Army staffer pleads guilty in massive life-insurance scheme

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A former Army financial counselor accused of siphoning millions of dollars from deceased soldiers’ life insurance funds pleaded guilty in federal court Tuesday, accepting a deal with prosecutors that could put him in jail for years.

After publication of a Washington Post investigation, federal investigators last year charged Caz Craffy, whose duties included providing basic financial guidance for Army families facing the loss of loved ones, with illegally exploiting his government job to produce clients for a brokerage firm where he moonlighted. With control over the accounts belonging to two dozen grieving families, authorities alleged, Craffy oversaw cumulative losses of $3.4 million stemming from shady trades that net him about $1.4 million in commissions.

Craffy, 41, was charged with 10 counts, including wire and securities fraud. His plea agreement calls for a prison sentence of 8 to 10 years. The judge presiding over the case will make that determination in August along with the amount of restitution Craffy must pay.

Craffy had faced decades in prison if convicted at trial. His attorney did not immediately return a request for comment.

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

The case was handled by the U.S. attorney’s office for the District of New Jersey.

The plea deal represents a measure of justice for the families, who said their trust in the military was violated when Craffy took advantage of their vulnerability.

Investigators, lawmakers and military officials said they were shocked and appalled by the scheme. It led to congressional action after The Post’s investigation exposed Craffy’s campaign to enrich himself at the expense of widows and children. The legislation, which was passed last year, established tough new requirements for the Defense Department to enhance vetting procedures for military financial counselors.

Craffy is a major in the Army Reserve, and it was unclear whether he will face further punishment in the military justice system. Officials declined to specify their next steps, citing privacy laws.

“The Army Reserve remains committed to holding personnel accountable for conduct that does not align with DoD and Army policies,” Lt. Col Addie L. Leonhardt, an Army Reserve spokeswoman, said in a statement. “We take these matters very seriously and will address this issue in accordance with Army regulations and the Uniform Code of Military Justice to ensure due process.”

This is a developing story and will be updated.

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