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David Denenberg, Nassau legislator, to plead guilty in mail fraud case

Nassau Legis. David Denenberg leaves federal court in

Nassau Legis. David Denenberg leaves federal court in Central Islip on Nov. 14, 2014. Photo Credit: Ed Betz

Nassau County Legis. David Denenberg Thursday agreed to plead guilty in a mail fraud case in which he's accused of bilking a client of his former law firm out of $2.3 million.

Denenberg, a Merrick Democrat, said through his attorney in U.S. District Court in Central Islip that he has accepted a plea deal offered by federal prosecutors.

U.S. District Judge Joanna Seybert granted Denenberg's request to delay entering his plea, scheduling the hearing for Jan. 21.

The eight-term lawmaker and his lawyer Jason Russo, of Bay Shore, declined to discuss the terms of the agreement afterward, but sources close to the deal said it would require Denenberg to plead guilty to all eight felony fraud counts he was charged with in November. He would also have to repay his former client.

Under suggested federal guidelines, Denenberg would face a prison sentence of 41 to 51 months, the sources said. Seybert could impose a greater or lesser sentence.

Russo said his client wanted to delay entering his plea in part because of personal issues. Denenberg is still recovering emotionally from the death of his mother, Daisy Denenberg, in November, Russo said.

The attorney also said he'd been immersed in a trial recently with a different client, and Denenberg wanted to discuss the ramifications of the deal more fully.

Eastern District prosecutor Lara Treinis Gatz didn't oppose Denenberg's request to delay entering his plea.

Denenberg, who appeared stoic in court Thursday afternoon, declined to comment afterward, saying he didn't "want to try the case in the press."

There was no indication that he plans to resign from the county legislature, but under state law, his seat must be vacated immediately if he's convicted of a felony. A special election must be held within 60 days.

When Denenberg was charged in November, Gatz said he already was in plea negotiations with the government, and had repaid a good portion of the $2.3 million and planned to repay the rest.

The lawmaker declined to discuss the allegations after leaving court that day, saying only: "I want to thank my family and friends. . . . I'm sorry that we are going through this."

He was released after posting a $500,000 personal-recognizance bond, officials said.

Between November 2006 and June, Denenberg defrauded a client of his Garden City law firm, Davidoff Hutcher & Citron, of the money, according to a charging document known as an information.

Denenberg billed the client for $2.2 million for "legal services never rendered," the information said. He also is accused of billing the same client for about $126,000 "for expenses never incurred."

The client was identified in the information as a Port Washington company that is "a retailer of personal computers, computer-related accessories and consumer electronics." Other court papers have identified the company as Systemax.

A lawsuit filed by Denenberg's former firm in September accused him of billing for "fictitious services" and referred the matter for criminal investigation to the office of Loretta Lynch, the U.S. attorney for the Eastern District, which includes Long Island.

"These bills -- mailed via U.S. Postal Service, or transmitted to the client over the Internet, all at Denenberg's direction -- were works of fiction," according to the suit.

Denenberg's attorney in the lawsuit, Jeffrey Gold of North Bellmore, has said the suit is in the process of being settled.

Denenberg dropped out of the race for State Senate in the 8th District hours after his former firm sued him.

At the time of those allegations, Denenberg called the suit politically motivated. He did not specifically deny the allegations, saying instead that he would work with the U.S. attorney's office to "establish the truth."

Denenberg first was elected to the legislature in 2000. He was born and raised in East Meadow, has an engineering degree from Cooper Union and a law degree from Brooklyn Law School.

WHAT'S NEXT

Nassau County Legis. David Denenberg (D-Merrick) agreed Thursday to a plea deal in a felony mail fraud case.

Jan. 21: Scheduled to formally plead guilty in U.S. District Court. Under state law, his legislative seat becomes vacant immediately.

County Executive Edward Mangano must set a date for a special election for the seat within 60 days of the vacancy. Political leaders said Thursday it was too early to say who will be nominated to compete in the special election.

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