Rotterdam attorney suspended by state Supreme Court pending financial investigation

A man throws candy to people — PHOTOGRAPHER: Erica Miller

FILE - Paul DeLorenzo, then with the law firm of DeLorenzo, Grasso & Dalmata, hands out treats before the Schenectady Holiday Parade in 2019.

ALBANY — Rotterdam attorney Paul DeLorenzo has been suspended from practicing law in the state pending an investigation into alleged misappropriation of funds during his time with the DeLorenzo, Grasso & Dalmata law firm.

A state Supreme Court ruling on Thursday stipulates that DeLorenzo is barred from practicing law pending an investigation by the Attorney Grievance Committee (AGC) for the Third Judicial Department into DeLorenzo’s alleged unauthorized use of funds maintained in the law firm’s escrow accounts.

Cory Dalmata, partner at the DeLorenzo, Grasso & Dalmata law firm, said that DeLorenzo has not been affiliated with the firm since allegations of financial impropriety were brought against him in July, after an internal company investigation was conducted.

“When the things that ended up being the allegations in the grievance were discovered, he agreed to resign from our office,” Dalmata said.

Dalmata said the firm does not expect to have any connection with Paul DeLorenzo in the future. DeLorenzo has filed a settlement agreement with the firm releasing him from any potential legal action by the law firm concerning the alleged misappropriated funds.

“There was an internal investigation because some things were found that didn’t seem appropriate,” Dalmata said. “So when we contacted him and tried to talk to him about what we found in our internal investigation, then we were immediately told that he was retaining counsel and to talk to his attorney. So then we did some more internal investigating and what we found we made a determination that we were obligated to file a grievance.”

In an affidavit filed Dec. 1, DeLorenzo applied for leave to resign from the New York bar while AGC’s investigation is pending.

The AGC subsequently opposed DeLorenzo’s motion and petitioned to suspend him during its investigation. It also sought an order directing DeLorenzo to make restitution to the Lawyers’ Fund for Client Protection based upon his alleged misappropriation of funds.

The state Supreme Court ruling issued on Wednesday noted that the court agreed with AGC’s concern that DeLorenzo’s resignation application was an attempt to minimize his misconduct.

The ruling added that while DeLorenzo had admitted his wrongdoing regarding the firm’s escrow account, he had attempted to “minimize his culpability in the misappropriation of funds from the firm’s operating account by noting only briefly that such issue was ‘resolved’ by the mutual exchanges of releases [between DeLorenzo and the firm].”

DeLorenzo has 20 days from the court’s ruling to submit a request to the court for a post-suspension hearing.

In 2020, DeLorenzo launched an unsuccessful bid for state Assembly, challenging incumbent Assemblyman Angelo Santabarbara, who was re-elected that fall.