Hicksville Man Pleads Guilty to Running Gift Card Ponzi Scheme; Must Pay Nearly $2.4 Million in Restitution

Ginsberg duped friends and family members; Judge promises 3 ½ to 7 years in prison in exchange for plea

MINEOLA, NY - Nassau County District Attorney Kathleen Rice announced today that a Hicksville man has pleaded guilty to grand larceny after operating a Ponzi scheme that promised investors he could procure gift cards to nearby stores at steep discounts, and then stealing nearly $2.4 million of their money.

Craig Ginsberg, 48, pleaded guilty to the top count of Grand Larceny in the Second Degree in exchange for a promised sentence of 3 ½ to 7 years in prison at his October 29 sentence date.

Rice said that, beginning in late 2006, Ginsberg told family, friends, and business associates that he could procure gift cards to stores like Target, Best Buy, Nordstrom’s and Toys R Us, as well as Visa and American Express gift cards, for 50 cents on the dollar, but that they must wait three months to get their cards. Ginsberg would purchase gift cards at face value and tell his victims that he got them for half-price. Victims would then increase the dollar amount of future purchases, and start bringing in other friends and family members.

Those new to the scheme were eager to be part of its “success,” and would pre-pay thousands of dollars for more gift cards they thought were coming. The scheme fell apart in the April 2008 when Ginsberg could no longer maintain it. Almost all of the victims who invested money in 2008 received nothing. Sixty-three victims stepped forward claiming losses totaling $2,392,435.

In addition to the gift card scam, Ginsberg also claimed that he could procure luxury suites for Islanders games, Knicks games, and the Super Bowl. Ginsberg told victims that if they fronted the money to purchase the suite from a distressed owner, he could flip it for a profit and get them a huge return on their investment. He also ran a similar scam by telling victims that he could buy overseas timeshares from distressed owners and then sell them for a huge profit.

Victims included doctors, lawyers, accountants, and the congregation of a South Shore temple that lost a collected $15,000. One victim lost nearly $1 million in gift cards and timeshare investments. Several others lost hundreds of thousands of dollars.

“Mr. Ginsberg stole from his friends and family, ruining their finances and violating their trust,” Rice said. “It is imperative for investors to understand the risks they are taking and to know that there is no such thing as a sure thing. If it looks too good to be true, then it probably is.”

Handling the case for the District Attorney's Office is Bureau Chief Robert Emmons and ADA Megan Gallagher of the Government and Consumer Frauds Bureau. The defendant is represented by Michael Schwed, Esq.