Following the Money

It should not be surprising that lawyers occasionally steal from their clients. They’re just people after all, and law school doesn’t inoculate against human weakness. What is shocking, is that in Oregon — whose courts and ethics I have long-written about — the state bar actually helped one of its licensees clean up after her decades-long crime spree. And by “clean up,” I mean in both senses of the word.

That lawyer was Lori Deveny. For 30 years, she was a respected personal injury attorney frequently serving as president of local and national bar associations. There was just one problem: For most of her career, she was also stealing her clients’ settlement checks.

She wasn’t even particularly exceptional at her theft — there are cases like hers every few years, in every part of the country.

What is exceptional is how the Oregon State Bar acted to protect Lori Deveny and her stolen cash. And they always say that you gotta follow the money.

#1 The Bar said Deveny could keep “her cut” of the stolen funds

Like all state bars, Oregon operates a fund — called the CSF — that reimburses clients victimized by dishonest attorneys. To date, 56 of Deveny’s victims have filed claims with the CSF, representing over $4 million in stolen funds.

However, in cutting checks to these victims, the Bar inexplicably decided to compensate them for only two-thirds of what Deveny stole, asserting that she had “earned” her third through her work settling their personal injury cases. Read that again:

Even though Deveny stole 100% of her clients’ money through forgery, identity theft, and fraud, the Oregon State Bar said she could keep her 33.3%.

That’s unconscionable (and crazy), given that Deveny certainly settled claims for less than their actual worth, due to her insatiable need for quick cash.

The Bar regularly let Deveny “keep” her 1/3rd cut of the money she had stolen.

#2 The Bar told victims not to bother trying to sue Deveny

Deveny did not cooperate with the Bar’s investigations, nor did the Bar have access to her financials while compiling its CSF claim summaries — yet throughout those summaries, the agency repeatedly asserted (as “findings”!) that nobody should waste their time trying to sue Deveny, because she was “broke.”

The Bar alleged that Deveny “has exhausted all remaining assets;” “has no remaining assets that anyone is aware of;” “appears to be financially insolvent, so it would be pointless… to pursue a civil judgment;” and “is likely judgment proof.” The Bar also claimed that “a good faith effort… to recover the money would be useless;” and “Deveny’s attorney [stated that] Deveny has no funds.”

But did anyone actually check? Or did the Bar just take the word of a now-convicted multiple felon, and her attorney? And why is the Bar so damn adamant that Deveny is broke when she’s admitted to stealing millions?

From the Bar’s “findings” in its CSF investigation summaries.

#3 The Bar rejected a victim identified by law enforcement

In January 2020, former Deveny client Alex Smith received an email from the U.S. Department of Justice’s victim notification system, stating their belief that Deveny had stolen $17,600 from him nearly a decade prior. Smith immediately filed a CSF claim with the Bar

The Bar denied Smith’s claim (and his appeal), despite the DOJ’s identification of Smith as a Deveny victim — which seems pretty definitive, given that the DOJ is the agency that brought 24 felony charges against her in 2019.

#4 The Bar has not tried to recover any CSF money from Deveny

The Bar has tools to recoup the CSF money it has paid out to victims, including a shiny new law enacted in 2019, which it has used to go after far lesser offenders than Deveny.

Yet, to date, the Bar has not tried to recoup any money from Deveny, or even pretended to try. The literal least the Bar could do is send some demand letters.

#5 The Bar’s malpractice insurance covered Deveny’s theft

Oregon is the only state in the country with mandatory malpractice insurance, which sounds great until you hear that it’s run by the Bar — i.e. expensively and poorly.

Malpractice insurance provides coverage for incompetent or negligent attorneys. It absolutely does not cover the kind of “intentional tort” (such as fraud and theft) that Deveny specialized in.

Despite this fact, the Bar sent its malpractice attorneys into court to fight one of the few civil cases filed against Deveny — filed by one of her victims in the state’s criminal case. Worse, the Bar sent the attorney in over a year a year and a half late… long after Deveny should have lost by default for her failure to appear.

That’s a big no-no that threatens the Bar’s insurance exemptions, and its very existence. And as an aside, in the cases of at least two other attorneys, the Bar has paid malpractice money to settle claims involving theft and fraud.

BONUS: More damage control by the Bar

A decade before Deveny, there was Bryan Gruetter, an attorney in Bend whose career flameout was as brief and spectacular as Deveny’s, but cost the Bar far less: Gruetter cost the Bar $860,000, while Deveny cost it $2,046,000.¹

In fact, the claims that the Bar had paid out to Deveny’s victims alone totaled more than half the amount that the CSF had paid out in its entire 52-year existence.

Yet, the Bar raised its annual CSF fee after Deveny by almost the exact same amount as it did after Gruetter — and that don’t math out at all:

I’ve tried and cannot make sense of these figures.

Like they say, you gotta follow the money.

And the slime trail that the Oregon State Bar made regarding Lori Deveny is inexcusable and obviously made for her benefit — to protect her from consequences for her own disgusting conduct.

It should go without saying that that’s not what the Bar is supposed to do, and I guess only the Bar knows why it acted on Deveny’s behalf.

¹ Client Security Fund claims are capped at $50,000 — Gruetter stole over $1.2 million from his clients, and Deveny stole over $4 million.

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