Kraft was implicated in a wide ranging corruption scandal known as "Fat Leonard scandal" Rear Adms. Mike Miller, Terry Kraft and David Pimpo were all punished for conduct during the January to July 2006 deployment of the aircraft carrier Ronald Reagan. Miller was the strike group commander, Kraft the carrier's commanding officer, and Pimpo the ship's supply officer on that cruise.
In a statement the Navy said the three officers "were found to have improperly accepted gifts from a prohibited source, two were found to have improperly endorsed a commercial business, and one engaged in solicitation of gifts and services from a prohibited source, when they were deployed to the Seventh Fleet area of responsibility during the 2006-2007 timeframe."
Further statements from the Navy stated that Kraft merely underpaid after attending dinner parties.
Although the Navy eventually referred the cases to the Justice Department, legal action was not pursued due to the Statute of Limitations.
Kraft is a 1981 graduate of the United States Naval Academy; he earned a Master’s degree in Political Science from Auburn University and is a graduate of the Navy Nuclear Power School. He was a federal executive fellow at John F. Kennedy School of Government at Harvard University (1999–2000).
Kraft's sea duty tours include the following:Attack Squadron (VA) 55 embarked in USS Coral Sea (CV-43),
VA-115 embarked in USS Midway (CV-41), and
VA-95 embarked in USS Abraham Lincoln (CVN-72).
He also served as executive officer on USS Theodore Roosevelt (CVN-71). During those tours, he participated in Operations El Dorado Canyon, Desert Storm, Iraqi Freedom (OIF) and Enduring Freedom (OEF).
Kraft commanded Electronic Attack Squadron 131, Amphibious Transport Dock USS Shreveport (LPD-12), the aircraft carrier USS Ronald Reagan (CVN-76), and the Enterprise Carrier Strike Group (CSG-12). He participated in both OIF and OEF during all four tours. He assumed command of Navy Warfare Development Command in October 2011.
Shore tours for Kraft have included duty in VA-128, Air Command and Staff College, Current Operations Directorate (J31), U.S. Pacific Command, and the John F. Kennedy School of Government, Cambridge, Massachusetts. After flag selection, he reported to the Pentagon, Chief of Naval Operations staff, first in N88 as head of Maritime Aviation, Unmanned Aerial Systems and Aviation Training Plans and Programs, then in N2/N6 as director, ISR Capabilities.
As of 2011, Kraft has over 3700 hours and 1000 carrier arrested landings in the A-6E, EA-6B and F/A-18F aircraft.
As of 2015, Kraft is authorized to wear the Legion of Merit with four gold stars, Distinguished Flying Cross (with combat V), the Defense Meritorious Service Medal, the Meritorious Service Medal with two gold stars and multiple individual and strike-flight Air Medals.