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Portland Personal Injury Lawyer Allegedly Embezzled $3.8 Million From Clients' Insurance Payouts

Portland attorney Lori E. Deveny, 57, allegedly defrauded at least 135 clients out of a $3.8 million, spending their stolen insurance payouts on big game hunting trips in Africa, taxidermy, cigars and home improvement. 

By Christina Coulter
Infamous White Collar Criminals

A former Oregon lawyer was sentenced to federal prison on Monday for defrauding at least 135 clients out of $3.8 million in insurance proceeds, according to the Department of Justice, using the ill-gotten gains to "bankroll a lavish lifestyle."

Lori E. Deveny, 57, was sentenced to more than eight years in prison and three years supervised release after pleading guilty to mail, bank and wire fraud; aggravated identity theft; money laundering; and filing a false tax return. She was also ordered to pay $4.5 million in restitution to her defrauded clients, Wells Fargo Bank, the Oregon State Bar and to the International Revenue Service for unreported income.

“If I could go back, I would choose a different path,” said Deveny at the Monday hearing, according to NBC Portland affiliate KGW8

RELATED: How Bernie Madoff Eluded Government Agencies For Years While Running Largest Ponzi Scheme In U.S.

Between 2011 and 2019, Deveny reportedly stole money from insurance proceeds she held for her clients in private trusts. By stealing her clients' identities and forging their signatures, she was able to transfer money from their trusts into her personal bank accounts. She would then lull those clients into a false sense of security, telling them that their insurance payouts would show up in their bank accounts eventually, court documents said. 

The DOJ noted that many of her victims had sustained serious brain and bodily injuries in accidents, the office wrote in their press release, making them especially vulnerable to her scheme. 

"The cruelest thing of all is knowingly providing false hope," said Special Agent in Charge Bret Kressin, IRS Criminal Investigation, Seattle Field Office. 
"Having already suffered losses, Ms. Deveny's clients deserved an attorney who represented their best interests. What they got instead was someone who inflicted more loss."

Meanwhile, she blew $173,000 on trips to Africa; $60,000 on trips to a nudist resort in Palm Springs, California; $220,000 on expensive cigars; a combined $91,000 on a Cadillac and recreational vehicle; $58,000 on veterinary bills and pet-related expenses; and $35,000 on taxidermy. 

"While serving as an attorney, Ms. Deveny brazenly stole money that should have gone to pay for health care for her clients for serious injuries and ailment," Kieran L. Ramsey, special agent in charge of the FBI Portland Field Office, said in the statement.

"Instead, that money funded things like big game hunting trips to Africa and home remodeling. She took advantage of people who were physically and emotionally hurting by forging insurance checks, stealing the funds and lying to her clients about payouts."

The Oregon State Bar Client Security Fund (CSF), Wells Fargo Bank and the IRS also suffered losses in the scheme. The CSF made $1.2 million in restitution payments to victims — according to the organization, this is one of the largest losses in its history, causing it to raise dues for all members for two years. Wells Fargo lost $52,000 when Deveny stole and forged a check, while the IRS lost more than $621,000 in personal tax returns when Deveny neglected to report her earnings. 

“It’s hard to overstate the extraordinary impact Ms. Deveny’s crimes had on the many innocent and vulnerable victims who trusted her,” Ethan Knight, chief of the Economic Crimes Unit for the U.S. Attorney’s Office, said in the statement. “As a former attorney, she had a special responsibility to her clients and to the public, but she repeatedly abused this trust and prioritized her own needs. This is a just sentence for serious crimes.”

Deveny surrendered her law license in May 2018 and pleaded guilty in June 2022. She faces similar state charges in Multnomah County Circuit Court, where she is scheduled to appear on Jan. 26.

As a result of Deveny's case, the Oregon State Bar has raised the cap on how much victims of a dishonest lawyer can claim from the organization's client security fund from $50,000 to $100,000, according to KGW8. 

Additionally, state lawmakers passed legislation that requires insurance companies to notify beneficiaries when their settlement checks are sent so that both clients and their lawyers are aware at the same time, the outlet reported. 

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