New York-based Classic Closeouts and owner Daniel Greenberg allegedly used customer credit and debit card numbers on file to charge accounts multiple times for items customers did not order, the U.S. Department of Justice said in a press release. Between June and December 2008, the operation charged customers for unordered items more than 70,000 times, the DOJ said.

Greenberg made an initial appearance in U.S. District Court for the Eastern District of New York Friday.

In some cases, the same card was charged "multiple" times over the course of several weeks, the agency said. The charges ranged from $59.99 to $79.99, said the U.S. Federal Trade Commission, which against ClassicCloseouts.com and Greenberg in June 2009.

When customers disputed the unauthorized charges with their credit card companies and banks, Greenberg asserted that the charges were valid because the customers had enrolled in an alleged "frequent shopper club," the DOJ said. In some cases, customers were denied credit cards after the disputes or were pressured into paying the fraudulent charges, plus late fees and interest, the agency said.

"Thousands of unsuspecting former customers were victimized by the defendant," Loretta Lynch, U.S. attorney for the Eastern District of New York, said in a statement. "With this arrest and prosecution, the Closeout scheme has now been closed down."