State court blocks Denenberg from selling assets

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A state judge has put Nassau County Legislator Dave Denenberg on a daily-living, expenses-only budget, at least until a Sept. 29 court hearing on his former law firm’s application to block Denenberg from selling or transferring financial assets.

The firm, Davidoff Hutcher & Citron, where Denenberg was formerly a partner and chairman of its intellectual property law group, filed suit Tuesday alleging that Denenberg systemically and fraudulently overbilled a client to the tune of $2.3 million over eight years, and that he obtained annual bonuses from the firm based, at least in part, on those billings. DHC also alleged that Denenberg received hundreds of thousands of dollars in reimbursements from the firm for expenses that he did not actually incur. Now the firm is suing Denenberg for $3.6 million –– the entirety of his salary and benefits from 2006 through June of this year.

In an affidavit, Jeffrey Citron, a DHC partner, stated that the firm found records in Denenberg’s office showing that the county legislator has “approximately $1.3 million, together with a 50 percent interest in his home in Merrick, held jointly with his wife.” The affidavit valued the house at $700,000.

“It is likely that Denenberg will attempt to shield some of these funds from the reach of his creditors by claiming they belong to his wife or children,” Citron stated in his affidavit. “Whether he does, or does not, it is clear that these funds are plainly insufficient to satisfy” DHC’s claim.

Joan Kenney, a State Supreme Court judge in Manhattan, issued a temporary restraining order that prohibits Denenberg from transferring, selling, divesting or otherwise disposing of his assets.

Kenney ordered Denenberg or his attorney to appear at the hearing on Sept. 29 to show cause why she should not grant the preliminary injunction that DHC has requested.

Denenberg, who was locked in a fierce battle for the 8th State Senate District seat with County Legislator Michael Venditto, a Republican from Massapequa, dropped out of the race hours after DHC filed the suit on Tuesday.

“While these charges are extremely serious, the timing, politically, should raise many questions," Denenberg said in a statement. "I retained counsel to vigorously defend me against these allegations and prosecute my claims against the firm. I look forward to cooperating with the U.S. attorney's office to establish the truth. Unfortunately, given the political calendar, it is impossible to continue my campaign for State Senate.”

DHC has referred the matter to U.S. Attorney General Loretta Lynch for possible criminal prosecution.

For the Herald's first-day story on this case, click here.