Greenberg started speaking with investigators when he realized it was his only path to leniency in the face of considerable evidence against him, the people told the Times.
His cooperation with the Justice Department — which includes several meetings with investigators, the newspaper reported — could put additional legal pressure on Gaetz as investigators work to determine whether he broke sex-trafficking or prostitution laws himself.
Gaetz has continued to deny all allegations against him and has not been charged with any crimes.
The Florida Republican was on Capitol Hill on Tuesday to cast votes, but he did not comment on The New York Times report when asked by CNN.
A spokesperson for Gaetz, Harlan Hill, told CNN in a statement Tuesday evening that Gaetz “has never paid for sex” and suggested that Greenberg is “trying to ensnare innocent people in his troubles.”
CNN has reached out to Greenberg’s attorney for comment.
The former tax commissioner in Seminole County, Florida, and a friend of Gaetz’s, Greenberg had faced decades in prison on 33 federal counts that ranged from identity theft to sex trafficking of a minor.
“We believe this case will be a plea,” said Assistant US Attorney Roger Handberg. Greenberg’s attorney, Fritz Scheller, requested a plea date by May 15. If a plea is not reached, they could move to a trial in July.
Speaking to reporters after the hearing, Scheller declined to say if his client would be willing to cooperate as part of the potential plea deal and would not divulge if Greenberg had already met with prosecutors to describe what he knows about Gaetz.
He added, however, that his client is “uniquely situated.”
“I’m sure Matt Gaetz is not feeling very comfortable today,” Scheller said.
CNN’s Paula Reid, David Shortell, Mark Morales and Ryan Nobles contributed to this report.