NEW YORK — Daniel Greenberg, the president and owner of discounted apparel site Classic Closeouts, has been indicted on wire fraud and access device fraud charges by a federal grand jury.
This story first appeared in the May 3, 2012 issue of WWD. Subscribe Today.
Greenberg, 38, was arrested in September on wire fraud charges arising from his scheme to defraud victims of more than $5 million through his now defunct Internet e-commerce site.
According to the indictment filed on April 26, but only made available this week, he charged victims’ credit cards or debited their bank accounts on over 70,000 occasions without authorization and without their purchasing any merchandise.
The indictment said that Greenberg retained the card information after the initial transaction ended, and used the information to place the unauthorized charges. In many instances, the indictment said, Greenberg falsely asserted that the customers enrolled in a “frequent shopper club” that enabled him to charge back the fraudulent charges after they were disputed by his victims. Because of the false assertions, in instances where credit card companies and banks declined to issue credits, those cardholders were required to pay the fraudulent charges plus any late fees and interest that accrued.
According to the U.S. Attorney’s Office for the Eastern District of New York, which covers Brooklyn and Long Island, Greenberg will be arraigned this afternoon before Magistrate Arlene R. Lindsay in the federal courthouse in Central Islip. He faces a maximum sentence of 20 years in prison if convicted.