Lawmakers are pursuing legislation that would enhance the military’s oversight of financial counselors tasked with helping the survivors of deceased service members, following an outcry from grief-stricken families who alleged they were fleeced out of hundreds of thousands of dollars by an Army employee who exploited them.
The push from Capitol Hill follows a Washington Post report in February detailing the allegations of four military families who said an Army financial counselor took control of their life insurance money through brokerage firms where he also was employed. They accused him of strip-mining their accounts through trades that earned him thousands of dollars in commissions, often executed, the families alleged, without their consent or consultation.
Such employees are provided as a service to military families. When personnel die while on duty, their life insurance beneficiaries can receive up to $500,000 in payments and related emergency assistance. Those benefits and others, advocates have said, have turned a vulnerable population into targets of opportunity for scammers.
“DOD financial counselors should be held to the highest standard to ensure they are providing sound guidance to our service members and their family members,” Rep. Mikie Sherrill (D-N.J.), the measure’s sponsor, said in a statement. She said she learned of the issue after reading The Post’s report, which featured families in northern New Jersey. Sherrill was a Navy helicopter pilot before entering politics.
Rep. Don Bacon (R-Neb.), a retired Air Force general who has backed the amendment, said the legislation would help “prevent predatory financial practices.”
There are about 400 financial counselors across the Defense Department, said Glynnis Harvey, a spokesperson for Sherrill.
The amendment was approved by the House Armed Services Committee and added to the House version of the National Defense Authorization Act, which sets Pentagon policy and spending for the year to come. Once the defense bill passes the House, it will have to be reconciled with the Senate’s version. The amendment’s fate won’t be known until that process plays out.
The four military families who accused the Army employee, Caz Craffy, of misconduct alleged that he funneled their life insurance money to investment firms where he was moonlighting. The families saw their accounts dwindle by a combined $750,000, their attorneys said, following questionable trades and commissions.
Attempts to reach Craffy and an attorney who represented him in an unrelated legal matter were unsuccessful. Neither responded to requests for comment.
Natasha Bevard, whose husband, Rodney C. Bevard, died by suicide in 2020 after a long military career, hailed the legislative effort. She told The Post earlier this year that she and her family lost more than $200,000 while working with Craffy.
“My ultimate goal,” Bevard said in a statement provided by her attorney, “is to make sure no other Gold Star family will be taken advantage of financially. Especially at their most vulnerable mental state.”
Financial counselors are meant to “educate and support their clients on their benefits and estate planning needs,” the Army said in February, not handle their funds or benefit financially from their relationship.
The proposed legislation is intended to tighten what advocates and affected families have said was a glaring oversight: The Army’s vetting standards appear reliant on the honor system. The military’s counselors were already required to fill out annual disclosures reviewed by a supervisor and ethics counselor, who check to see if the forms are free of self-disclosed conflicts of interests. But the information is “taken at ‘face value’ unless there is a patent omission or ambiguity or the official has independent knowledge of matters outside the report,” an Army spokesman said earlier this year.
Sharon Hartz, whose son, Sgt. Thomas F. Anastasio, died in January 2019, told The Post in February that Craffy took over investment accounts funded by the life insurance payment her family received. Her funds also lost $200,000 in value, she said.
“It’s unimaginable,” she said. “He disrespected me. He disrespected my son. My family.”
Craffy was fired from his New Jersey brokerage firm in November amid a financial regulatory investigation into his conduct, according to the nongovernmental Financial Industry Regulatory Authority. FINRA’s findings do not contain an admission or denial of wrongdoing, though his refusal to cooperate led to the organization to strip him of his certification to act as a broker.
Craffy left the Army in January. Officials said his actions prompted an internal review to ensure its financial counselors have followed ethical and legal standards. Sgt. 1st Class Anthony Hewitt, an Army spokesperson, said the review determined that “the situation in question was an isolated incident.”
Natalie Khawam, an attorney representing nine families who have financial losses after dealing with Craffy, said Congress and the Pentagon “must put in place safeguards to ensure this never happens again.”