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Lawrence man convicted in $5 million fraud case, feds say

A Lawrence man was convicted in federal court Friday of a $5-million fraud through his online discount clothing and personal items business, according to officials.

Daniel Greenberg, 40, who ran Classic Closeouts from a Hempstead location from 2008 to 2009, was accused of adding fees of $49 or more to thousands of customers charge cards without the customers' permission on more than 6,0000 occasions, officials said.

Greenberg was convicted on all 13 counts in his indictment after a two-week trial in federal District Court in Central Islip by a jury which deliberated for a total of seven hours over two days, officials said.

The charges included wire fraud and money laundering.

"Daniel Greenberg's Classic Closeouts was a classic scam," said Loretta Lynch, the United States Attorney for the Eastern District in a statement. "When his business ran into trouble, Greenberg helped himself to his customers' credit card numbers and then had the audacity to fight them when they tried to have the charges removed."

Greenberg's attorney, Eric Creizman, of Manhattan, said he and his client were "dismayed" by the verdict and planned an appeal.

Creizman maintained, in a written statement, that at the trial "no one said that they knew Danny did it or that Danny told them he did it" and that there was "no explanation of why he would commit such an audacious, preposterous fraud."

The charge card information had been obtained from customers' previous purchases, according to federal prosecutors Charles Rose and Walter Norkin.

When customers complained about the charges, they were often told that they had enrolled in a "frequent shopper club" which required a one-time charge, officials said. At times, when customers complained to their credit card companies or banks, the financial companies declined to remove the charges, believing the Greenberg company's claims that the charges were legitimate, officials said.

At one point, Greenberg's company employed more than 50 people and had a 100,000-square foot warehouse in Hempstead, according to trial testimony.

U.S. District Judge Arthur Spatt released Greenberg on $500,000 bail and electronic monitoring, pending sentencing.

Greenberg could be sentenced to over 20 years in jail.

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