Stopping the Clock
Clear signs of public corruption at the Oregon State Bar
Ever since disgraced former attorney Lori Deveny’s crime spree first came to light, the Oregon State Bar has consistently striven to reduce (or eliminate) the amount that she owes her 135 victims — by allowing her to keep “her cut” of the stolen funds, and steering victims away from lawsuits, and helping pay for her theft with her malpractice insurance.¹
All of those are improper, but also look bananas. Like, on what planet does someone get to steal 100% of an insurance settlement through forgery and identity theft, and then when they get caught, they get to pocket a third simply because they’re a lawyer and lawyers always get their cut? Yet, that’s what the Bar ruled, and then infected the courts with that same aberrant thinking.
In fact, in its handling of Deveny, the Bar broke nearly every bylaw in its book for dealing with dangerous attorneys, in a way that screams of public corruption, and cannot be mistaken for mere ignorance or ineptitude.
But the Bar’s latest move to protect Deveny and her pile of embezzled cash is, how you say, unhinged.
Some backstory: The Oregon State Bar, like every other state, has a program called the Client Security Fund (CSF), which reimburses victims of dishonest lawyers, up to $50,000 per person.
Deveny’s former clients began applying for that CSF money after her implosion in 2018, and those claims quickly ballooned to $3+ million. Due to their sheer volume, they were presumed to be true, and the Bar started rubber-stamping them and paying them out. There were still cursory investigations, but the Bar waived many of its usual requirements for approval.
Chiefly, the Bar waived the requirement that for claims over $5000 — which almost all of Deveny’s were — the lawyer needed to be convicted of a crime, or the victim needed to obtain a civil judgment against them.²
Waiving that constraint for 41 victims was a huge deal, and effectively ratified the plausibility and magnitude of Deveny’s criminal enterprise.
But… it should have been for 42 victims.
Alex Smith hired Deveny in 2010 because of a car accident, and long story short, she stole $17,671 from him. We know this because the U.S. Attorney discovered the theft and notified Smith, who otherwise would not have known about it.³ Like everyone else, Smith submitted his CSF claim the moment he learned of his loss, in February 2020.
Inexplicably, even with the prosecutor’s notificiation in hand, the Bar denied Smith’s claim — the only such denial related to Deveny’s crime spree — citing that he had “not established that there was a loss here caused by dishonest conduct” by Deveny, and effectively telling the U.S. Attorney that they were wrong.
Smith appealed the Bar’s decision and was denied again. He gave up rather than continue contesting the Bar’s distressing and arbitrary decision.
But a year ago, Deveny finally pleaded guilty to stealing from Smith and 134 others; and then in April she agreed to pay $4,013,385 in restitution, including $17,671 to Smith.
I urged Smith to file a new claim, since he now had a judgment in hand against Deveny, and she was also now convicted of a crime against him. Either is a requirement for a CSF payout, and he effectively had both.
And here comes the really bonkers part: The Oregon State Bar then denied Alex Smith’s $17,671 claim again, this time asserting that “the time has run in which to submit claims against Lori Deveny for reimbursement by the Client Security Fund.”
That is, the Bar decided to stop the clock on behalf of its good friend Deveny, when in fact, upon her conviction or the order of restitution, the clock was just supposed to be starting.
That’s not supposition. That’s taken straight off the Bar’s own website.
Even crazier, it appears that the Bar didn’t even process Smith’s claim — they attached his original paperwork to the rejection letter they mailed him, and there is no indication that they actually accepted or filed or considered his claim, or even kept a copy for their records.
Whether the Bar likes it or not, these original CSF claims are public records, whether approved or not, and destroying or tampering with such public records is a crime.
Smith told me, “I don’t understand why the Bar is singling me out and refusing to pay my claim, which isn’t even that much but it would mean a lot to me. Deveny pleaded guilty to stealing $17,000 from me, and the federal judge ordered her to pay that restitution. The Bar absolutely should reimburse me, just as it did with the dozens of other Deveny victims.”
He continued, “I feel as though the Bar’s decision was likely made to cover their own interests.”
His are reasonable and valid concerns: Why should Alex Smith alone have to wait for reimbursement directly from Deveny when we all know it will likely never come?⁴
The Bar should be required to pay Smith, as they paid all the other victims of the crime spree that happened right under their noses, at a time Deveny was one of their most influential and high-profile members, funneling thousands of dollars of stolen cash to specialty Bar associations, while using those donations to launder her reputation and give herself the appearance of respectability.
The Bar’s conduct is alarming and dishonest, and Oregon attorneys should demand some answers from the agency.
¹ Among the many things that Deveny was up to, practicing law was not high on the list, and when she did practice law, her conduct was neither negligent nor incompetent: It was criminal. There is no legal malpractice insurance that covers dishonest, fraudulent, or criminal acts.
² The Bar also waived its rule about claims filed more than six years after the loss occurred. That’s because Deveny sweettalked and lulled some of her cognitively-impaired car accident clients for decades.
³ Despite obtaining Smith’s client file during its custodianship over Deveny’s practice, the Bar never contacted him to retrieve it, which was the sole purpose of the custodianship. It’s all very, very odd.
⁴ The federal judge also ordered Deveny to reimburse the Bar for all of their CSF payouts, which came out of the pockets of all Oregon attorneys. When the Bar pays Smith, that amount would simply shift into their column on the order of restitution. The financial burden absolutely must fall on the legal community. After all, those are the Bar’s own rules.
