The push from Capitol Hill follows a Washington Submit report in February detailing the allegations of 4 navy households who mentioned an Military monetary counselor took management of their life insurance coverage cash by means of brokerage corporations the place he additionally was employed. They accused him of strip-mining their accounts by means of trades that earned him 1000’s of {dollars} in commissions, typically executed, the households alleged, with out their consent or session.
Such workers are offered as a service to navy households. When personnel die whereas on responsibility, their life insurance coverage beneficiaries can obtain as much as $500,000 in funds and associated emergency help. These advantages and others, advocates have mentioned, have turned a susceptible inhabitants into targets of alternative for scammers.
“DOD monetary counselors needs to be held to the best commonplace to make sure they’re offering sound steering to our service members and their members of the family,” Rep. Mikie Sherrill (D-N.J.), the measure’s sponsor, mentioned in a press release. She mentioned she realized of the problem after studying The Submit’s report, which featured households in northern New Jersey. Sherrill was a Navy helicopter pilot earlier than coming into politics.
Rep. Don Bacon (R-Neb.), a retired Air Drive basic who has backed the modification, mentioned the laws would assist “stop predatory monetary practices.”
There are about 400 monetary counselors throughout the Protection Division, mentioned Glynnis Harvey, a spokesperson for Sherrill.
The modification was authorised by the Home Armed Companies Committee and added to the Home model of the Nationwide Protection Authorization Act, which units Pentagon coverage and spending for the yr to come back. As soon as the protection invoice passes the Home, it must be reconciled with the Senate’s model. The modification’s destiny gained’t be identified till that course of performs out.
The 4 navy households who accused the Military worker, Caz Craffy, of misconduct alleged that he funneled their life insurance coverage cash to funding corporations the place he was moonlighting. The households noticed their accounts dwindle by a mixed $750,000, their attorneys mentioned, following questionable trades and commissions.
Makes an attempt to succeed in Craffy and an legal professional who represented him in an unrelated authorized matter had been unsuccessful. Neither responded to requests for remark.
Natasha Bevard, whose husband, Rodney C. Bevard, died by suicide in 2020 after an extended navy profession, hailed the legislative effort. She informed The Submit earlier this yr that she and her household misplaced greater than $200,000 whereas working with Craffy.
“My final purpose,” Bevard mentioned in a press release offered by her legal professional, “is to ensure no different Gold Star household might be taken benefit of financially. Particularly at their most susceptible psychological state.”
Monetary counselors are supposed to “educate and help their purchasers on their advantages and property planning wants,” the Military mentioned in February, not deal with their funds or profit financially from their relationship.
The proposed laws is meant to tighten what advocates and affected households have mentioned was a obtrusive oversight: The Military’s vetting requirements seem reliant on the dignity system. The navy’s counselors had been already required to fill out annual disclosures reviewed by a supervisor and ethics counselor, who examine to see if the kinds are freed from self-disclosed conflicts of pursuits. However the info is “taken at ‘face worth’ until there’s a patent omission or ambiguity or the official has impartial data of issues exterior the report,” an Military spokesman mentioned earlier this yr.
Sharon Hartz, whose son, Sgt. Thomas F. Anastasio, died in January 2019, informed The Submit in February that Craffy took over funding accounts funded by the life insurance coverage fee her household acquired. Her funds additionally misplaced $200,000 in worth, she mentioned.
“It’s unimaginable,” she mentioned. “He disrespected me. He disrespected my son. My household.”
Craffy was fired from his New Jersey brokerage agency in November amid a monetary regulatory investigation into his conduct, based on the nongovernmental Monetary Business Regulatory Authority. FINRA’s findings don’t include an admission or denial of wrongdoing, although his refusal to cooperate led to the group to strip him of his certification to behave as a dealer.
Craffy left the Military in January. Officers mentioned his actions prompted an inner overview to make sure its monetary counselors have adopted moral and authorized requirements. Sgt. 1st Class Anthony Hewitt, an Military spokesperson, mentioned the overview decided that “the scenario in query was an remoted incident.”
