A Multnomah County judge on Wednesday sentenced disbarred Portland lawyer Lori E. Deveny to 14 years in prison, citing the “sheer number” of clients she fleeced of their insurance settlements, the sum of the losses and the violation of her position of trust.
“And frankly,” Circuit Judge Jerry B. Hodson told Deveny, “the calculated and consistent manner in which you preyed upon, intimidated, defrauded and stripped your victims of not only their compensation, but future financial stability, health, security, hope and their ability to trust.”
Deveny, a personal injury lawyer found by the state bar to have perpetrated the worst fraud of any single attorney in its history, will serve her state term at the same time as her nearly 8 1/2-year federal prison sentence.
Hodson issued the sentence after hearing from 25 of Deveny’s victims over three days. One by one, they took the witness stand and described in detail how they hired Deveny to help them win settlements to cover their medical costs from debilitating injuries and that she instead caused them further harm.
Several came to court in wheelchairs. One approached the witness stand with the help of a walker. Another limped slightly on a prosthetic leg.
All recalled in often agonizing, emotional testimony how Deveny had betrayed them, how they lost faith in lawyers and in humanity and how they were financially ruined because of her.
Many said friends or co-workers had referred her to them because she had a reputation as an aggressive “go-getter.” She initially won over her clients by visiting them in the hospital, taking them flowers or sending them holiday cards. Some even supported Deveny in her chosen charities, participating in marches against breast cancer.
But when it came to collecting their settlement checks, Deveny strung her clients along with a range of excuses for the delays in their payouts -- her pet died, her mother was ill, an insurance company went bankrupt.
Meanwhile, she forged their signatures, deposited their settlement checks into her lawyer’s trust account and transferred the money to her and her husband’s personal bank accounts.
In one case, she invited 18-year-old Hailey Grable, who had been injured in a crash in October 2016, to “come alone” to lunch with her at Chicago Pizza in Portland, where she convinced the girl to open her own bank account separate from her parents, according to court testimony. Deveny ended up forging her signature on a $55,124 settlement check and depositing it into her own account.
Deveny’s victims said they felt foolish for believing her and embarrassed in front of friends and family for falling victim to her scam. Some said they suffered significant depression; others contemplated suicide.
They urged the judge not to allow Deveny to profit off her story or be allowed to provide any legal help to other inmates behind bars. One victim suggested Deveny should have to do at least 4,000 hours of community service.
State prosecutors Scott Healy and Jeffrey Nitschke had urged a 20-year prison sentence for Deveny, who admitted in state court to stealing $1.8 million from 36 clients, a fraction of what investigators said were approximately 135 victims who lost a total of $4.6 million to her fraud. Many of the other victims were part of the separate federal prosecution.
“A real 20 years in prison is what justice dictates in this case -- justice for the victims who were directly affected, justice for the legal profession, justice for Oregonians,” Healy argued. “Send a message to lawyers and business people, fiduciaries everywhere in the state of Oregon that this type of conduct will not be tolerated. … The damage this defendant has done to the legal profession in the state of Oregon, really I don’t think can be measured.”
Prosecutors said Deveny used the money to support a lavish lifestyle, including safari trips to Africa, cruises, fishing trips, taxidermy, thousands in pet care, expensive cigars and home remodeling expenses.
Deveny pleaded guilty in state court to 28 counts of first-degree aggravated theft, seven counts of first-degree theft and one count of identity theft. She will serve her federal prison term in federal prison and then is expected to serve the remaining state sentence at Oregon’s Coffee Creek Correctional Institution. Despite the prosecutors’ request, Hodson said Deveny can earn credit off her state sentence for good time served and be considered for alternative incarceration programs.
Defense lawyer Wayne Mackeson urged the judge to impose the same sentence Deveny received last month in federal court, arguing the convictions are for the same type of crimes.
He submitted a sentencing memo that extensively quoted U.S. District Judge Michael W. Mosman’s remarks when he sentenced Deveny earlier this month to eight years and five months and ordered her to pay $4.6 million in restitution.
“The federal sentence for this same conduct should control,” Mackeson argued, noting that at some point punishment no longer serves a purpose. “I submit Judge Mosman got it right.”
A psychologist who evaluated Deveny through several video conference sessions found she was attempting to avoid her older husband’s manipulative and controlling behavior, as well as his emotional, psychological and sexual abuse. She said he weaponized sex when she did something that angered him, psychologist Jennifer Johnson testified.
Mackeson said Deveny’s life with her late husband, Robert Deveny, who took his own life in March 2018, was a “living hell.” Mackeson described him as an “odious, selfish, manipulative man who abused her in repugnant ways.”
“I think it’s common for abuse victims to experience avoidance or suppression as a primary coping mechanism,” Mackeson said.
The stealing from her clients wasn’t intentional, he argued, but she made herself “deliberately ignorant of what’s going on around” her.
Deveny, 57, seated beside her lawyer in blue jail scrubs, briefly addressed the judge, reading from a prepared statement.
She said she didn’t set out to hurt her clients.
“I can only tell you how sorry I am that instead of helping you, I inflicted more pain. I strayed from my purpose of helping you and you have all paid the price. ... Regardless of how many I may have helped over the years, I will forever remember those people I hurt,” she said. “I can only express my deepest apologies.”
Among her victims who testified were Angie McFarland and her husband Jamie McFarland. They said they suffered significant injuries when they were struck by a drunken driver in 2006 in Portland while Jamie McFarland was pushing his wife in a broken-down golf cart to a friend’s home after a night out at a bar. They hoped to call a cab from their friend’s house to go home.
Jamie McFarland was pushing the golf cart across a bridge on Southeast Holgate Boulevard as his wife sat in the cart when they were hit.
The force of the impact flung Jamie McFarland into the air. His wife’s head became caught in the wheel well of the driver’s car as she was dragged. Jamie McFarland’s left leg was pulverized. He was rushed to OHSU Hospital, where he later caught an infection and ultimately had to have his left leg amputated above his knee. His wife’s scalp had to be stitched back on. She also suffered 13 broken ribs and a traumatic brain injury.
They were owed a settlement check of $310,000, but didn’t get it.
“We thought Lori was working in our best interest, but instead she was stealing and stalling,” Angie McFarland testified.
Angie McFarland said she had to work three jobs to pay the mortgage on their home while the couple sold assets to stay financially solvent with two children. She was critical of the state bar for not catching Deveny’s fraud earlier and asked why the bar allowed Deveny to keep her records and assets once she relinquished her license.
In response to a prosecutor’s question about what length of sentence Deveny deserved, Angie McFarland turned toward Deveny and said: “I will never be satisfied until Lori rots in prison.”
Nancy Freyer said she hired Deveny when a doctor removed her big toe on her right foot without consent in 2012 as part of treatment of a birth defect. She signed a settlement that provided for $27,000 in payment. But she later learned Deveny had deposited a check for $23,000 into her lawyer’s trust account the next day, while telling Freyer it would take some time to clear Medicare liens.
Meanwhile, Freyer received Medicare notices that her medical bills were outstanding.
“She preyed on me at my most painful, vulnerable time in my life,” Freyer testified. “Ms. Deveny has left me in unnecessary life-long suffering. One trauma is visible, the other is not. Both will be with me the rest of my life.”
-- Maxine Bernstein
Email mbernstein@oregonian.com; 503-221-8212
Follow on Twitter @maxoregonian
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