Man accused in gift card ponzi scheme

  Eyewitness News

LONG ISLAND (WABC) -- A man is under arrest on Long Island, charged with operating a ponzi scheme involving gift cards. He's accused of scamming $4-million from his victims-- some of them were his own relatives.

Prosecutors say Craig Ginsberg of Hicksville managed to steal more than $4-million.

Prosecutors said the 48-Year-old Ginsberg told customers -- many of them family friends, and business colleagues-- that he could get gift cards from major stores like Target, Best Buy, Nordstrom's and Toys R Us, and he could get them for 50-cents on the dollar, but they would have to wait three months to get their hands on these gift cards.

Then Ginsberg bought some cards himself at face value, and gave them to his victims, maintaining that he got them, half off. In this way, prosecutors say, Ginsberg built trust and then tried to grow his alleged scheme, selling not just gift cards, but luxury boxes to sporting events and time shares.

Ginsberg's lawyer disagrees. He says his client was running a bartering business.

The attorney released a statement saying: "my client was not involved in any ponzi scheme. he is simply a businessman whose business went sour."

Ginsberg's business apparently fell apart in 2008. Prosecutors say he could not produce the goods and pay back his investors.

He checked himself into the Nassau University Medical Center's psychiatric wing. He was arrested in the parking lot, right after he was released.

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WEB PRODUCED BY: Lakisha Bostick

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