Former Portland attorney who robbed clients pleads guilty to 7 federal charges

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A former Oregon personal injury attorney who prosecutors say stole more than $3.4 million from clients over nearly a decade, pleaded guilty Monday to seven federal charges in what the Bar of the state called it the worst single-lawyer fraud in state history.

Lori E. Deveny, who turns 57 on Wednesday and relinquished her Oregon law license in May 2018, pleaded guilty to mail fraud, wire fraud, bank fraud, two counts of impersonation aggravated, money laundering and filing a false tax return. from 2012.

Prosecutors will seek a 10-year-and-one-month sentence for Deveny, Assistant US Attorney Claire M. Fay told the court. Under the plea deal, Deveny can seek no less than five years in prison, Fay said.

Federal prosecutors say Deveny stole money she held in trust for her clients and used it to pay off credit card debts and loans and to support a lavish lifestyle.

Expenses included big game hunting trips to Africa, taxidermy fees resulting from those trips, other vacations, her husband’s photography business, home renovations and expensive cars, investigators said. the Internal Revenue Service and the FBI.

The money came from insurance proceeds that were to be paid out to his clients. The fraud occurred from April 2011 to May 2019, according to the federal indictment.

Deveny, who is not in custody, appeared with the Deputy Federal Public Defender Mark Ahlemeyer before U.S. District Judge Michael W. Mosman.

When asked how she pleaded to each of the seven counts, Deveny told the judge: “Guilty.”

She must remain out of detention until her sentencing on November 23. She will pay at least $3.4 million in restitution and lose $52,620, according to Fay.

The Oregon State Bar approved $1.3 million in payouts from its Client Safety Fund stemming from claims submitted by clients who said they lost money due to dishonesty in Deveny as a lawyer. The bar was appointed custodian of Deveny’s law practice, including his client records and corporate accounts.

Investigators say Deveny forged client signatures on settlement documents she sent to various insurance companies, transferred funds without authorization to personal accounts and lied to clients by saying that insurance companies insurance were responsible for any delays in settling claims. Many Deveny clients have never received the insurance payments that were due to them.

Deveny had faced a 24-count indictment in federal court. She is also being sued in Multnomah County Circuit Court on 92 counts of theft, forgery and other counts.

In a separate civil lawsuit, a man who accused Oregon Democratic donor Terrence ‘Terry’ Bean of sexually abusing him as a teenager, claims Deveny, his former lawyer, committed professional misconduct by negotiating settlement agreements without his consent and had pocketed most of the settlement money. Bean had paid his accuser not to show up for his first trial. Earlier this year, the state dropped all criminal charges against Bean after the alleged victim in the sexual abuse case informed the Lane County prosecutor that he did not want to prosecute or participate in the case. for a long time, according to court documents. Civil suits against Bean were later dismissed.

In 2019, the federal prosecutor urged the court to order Deveny to keep the dozen weapons found in his home and the heads of exotic taxidermy animals, including a giraffe, zebra and lion, but to dispose of all ammunition in the house. Deveny’s husband committed suicide in the house a year prior with a gun, Fay said at the time.

Ahlemeyer said Deveny was cataloging guns for sale to pay off his debt and urged the court to allow Deveny to continue to do so. In 2019, a magistrate judge ordered Deveny to keep detailed records of his gun and taxidermy sales and provide that information to his pretrial service officer.

In the wake of Deveny’s fraud, the state bar lobbied for a change in state law that requires an insurance company to directly notify a claimant, as well as the attorney, if a settlement is concluded and the money is paid.

The so-called Beneficiary Notification Bill passed in last year’s legislative session “will provide both a deterrent against wrongdoing and a means of prompt notice to the beneficiary in the rare event of ‘misconduct,’ said Kateri Walsh, a spokeswoman for the state bar.

In 2019, the state bar said Deveny’s theft cases prompted the highest claims with the Client Security Fund involving a single state attorney. The bar increased the maximum Customer Safety Fund payout from $50,000 to $100,000 per claim, starting this year, according to Walsh.

Deveny told the court she was being treated for a mental illness, but said she was not taking any medication that interfered with her ability to understand court proceedings.

–Maxine Bernstein

Email to [email protected]; 503-221-8212

Follow on Twitter @maxoregonian

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