Crime Watch

Court document: Denenberg faces eight counts of mail fraud

Legislator pleads not guilty to the charges against him

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Nassau County Legislator David Denenberg, a Democrat from Merrick, is facing eight counts of mail fraud, a federal crime, after prosecutors allege he overbilled a client at his former law firm by $2.3 million.

The complaint, filed by U.S. Attorney Loretta Lynch in the Eastern District Court in Central Islip on Friday, alleges that Denenberg "devised and carried out a scheme and artifice to fraudulently obtain money" from the client, Port Washington-based Systemax, a computer and electronics retailer.

Denenberg voluntarily surrendered to federal authorities on Friday at the FBI's office in Melville.

His criminal defense attorney, Jason Russo, said Denenberg would not make a statement on Friday, but he later spoke with reporters. The lawmaker pleaded not guilty in court and went free on a $500,000 unsecured bond. Denenberg is scheduled to appear in court again on Dec. 11.

A mail fraud conviction carries a sentence of five to 30 years, in addition to fines up to $250,000, depending on the circumstances of the case.

In an interview with the Herald after his arraignment, Denenberg would not say that a plea deal was in the works, but he said, "We're working with the U.S. attorney's office...to resolve these charges."

Denenberg added that he would continue to serve as county legislator, and he thanked his family and friends for their support. "I'm sorry we're all going through this," he said.

In the complaint, Lynch cited eight instances of mail fraud, which allegedly took place from April 2011 to February 2013, though the federal complaint notes that the case dates back to as early as 2006.

In September, Denenberg's former law firm filed suit against him in State Supreme Court in Manhattan, seeking $3.6 million in damages. Davidoff Hutcher & Citron alleged that Denenberg systemically and fraudulently overbilled Systemax over eight years, and sought a 25 percent annual bonus from the firm based, at least in part, on those billings.

Garden City-based DHC said Denenberg, an intellectual-property attorney, engaged in a “cold, calculated scheme” that he “willfully executed and concealed.”

In her complaint, Lynch stated, "The corporation [Systemax], relying on Denenberg's false representations, sent checks via U.S. mail to Davidoff Hutcher & Citron in payment for legal services never rendered."

According to court documents, Denenberg’s salary at Davidoff Hutcher & Citron was $325,000 in 2007, and was raised to $360,000 in 2008. With bonuses, he collected an average of $487,685 per year from 2007 to 2013.

According to Davidoff Hutcher & Citron, the firm fired him earlier this year, though Denenberg told Newsday in June that his departure was by mutual agreement.

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