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Lawrence Man Gets 7 Years for $5M Internet Con

A 41-year-old Lawrence man was sentenced Friday to seven years in federal prison for defrauding thousands of customers of his former Internet retail website out of $5 million unauthorized credit card charges.

Daniel Greenberg, the owner of now-defunct Classic Closeouts, had been convicted at Central Islip federal court of wire fraud, identity theft and money laundering.

“Instead of running Classic Closeouts lawfully, he chose to run a classic con,” said Loretta Lynch, U.S. Attorney for the Eastern District of New York.

Prosecutors said Greenberg helped himself to a cache of his customers’ credit card information, rang up more than 60,000 in unauthorized charges and then fought his victims’ efforts to have the charges removed from June 2008 through at least April 2009.

The website had sold discounted clothing and personal items. When victims tried to fight the bogus charges, Greenberg falsely asserted that the charges were valid because they had enrolled in an “frequent shopper club” despite their only making one purchase.

He often charged the same card multiple times over the course of several weeks and months. When credit card companies balked at the victims’ protests, some victims were pressured into paying the fraudulent charges, plus late fees and interest.

Greenberg was also sentenced to three years of supervised release and was ordered to pay $1,125,022.58 in forfeiture and $1,125,022.58 in restitution to his victims.

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