Psychic swindler: Ex-Bend woman sentenced in $15 million fraud

A federal judge in Portland on Thursday sentenced a former Bend psychic to more than eight years in prison for orchestrating a bold family fraud scam that took more than $15.5 million from a Portland-area victim, living an opulent lifestyle while leaving him almost broke.

Along with the 100-month sentence, U.S. District Judge Robert E. Jones ordered Rachel Lee, 44, of Canby, to pay $15,490,978.65 in restitution to the victim. In addition to the prison sentence, she must serve three years of post-prison supervised release on the convictions of conspiracy to commit wire fraud and money-laundering, along with failure to pay taxes.

“Fueled by greed and a complicated web of deceit, Rachel Lee gained control of her
victim, liquidated his fortune, and left him nearly penniless,” said United States Attorney Amanda Marshall.

“Due to the combined efforts of federal, state, and local law enforcement, the victim is now safe and financially stable,” Marshall said in a news release. “We will continue to work tirelessly with our law enforcement partners to hold self-serving crooks accountable, protect victims, and seek full restitution.”

According to documents filed with the court, the victim met Lee in 2004 when he visited her Psychic Shop in Bend.

Between 2004 and 2006, Lee fostered a friendship with the victim for the purpose of extracting money from him and falsely claimed that she provided care for her dying husband. She also falsely claimed that she assisted with bookkeeping for her husband’s business.

As a result of these lies and the trust she established with the victim, prosecutors said, Lee assumed the role as a paid caregiver to the victim’s elderly father by 2007. Trusting her to act in his best interests, the victim turned over all personal and business account control to Lee.

While controlling the victim’s finances, Lee and her family lived in a million-dollar home in the Portland West Hills, purchased with the victim’s money.

As part of the fraud scheme, Rachel Lee recruited members of her family to play key
roles in carrying out the deception. She and her daughter, Porsha Lee, created a fake persona named Mary Marks and introduced this character to the victim.

This character wore a blond wig, glasses, a hat, and sported a British accent. Porsha Lee, as Mary Marks, met the victim and used information her mother provided her to connect with him. She claimed to be a bookkeeper, and soon after began assisting Rachel Lee with the management of the victim’s accounts.

By 2011, the victim believed he and Mary Marks had married and had a child. The child presented to the victim as his son, named Giorgio Armani, is actually one of Rachel Lee’s grandchildren.

Digital images reveal years of holidays, birthdays and events with the victim, Rachel Lee, Porsha Lee as Marks, and their purported child.

Between 2007 and 2011, Rachel Lee directed the victim to incrementally liquidate
investment accounts totaling approximately $3.8 million.

After depleting the victim’s investment accounts, Rachel Lee convinced the victim he owed substantial taxes and needed to sell his family’s tree farm. At Lee’s direction, the tree farm properties were sold for approximately $12.3 million.

Rachel Lee and her family spent the victim’s fortune on a luxury lifestyle, prosecutors said. She directed funds for high-roller trips to Las Vegas, trips to California, and a first class trip to Europe. She also spent her ill-gotten gains on luxury clothing and jewelry, including a $64,000 Rolex watch.

While selling off the victim’s property, Rachel Lee and her co-defendant, Blancey Lee, purchased a Ferrari and a Bentley on a single day. Finally, between 2010 and 2013, Lee and her co-defendants used the victim’s money to purchase at least 10 properties at a cost of approximately $3.3 million. She and her family used three of the properties – in Bend, Canby, and Scappoose – as Psychic Shops.

By the time of Rachel Lee’s arrest last May, the victim held less than $250,000 in
assets under his control. As a result of the investigation, the 10 properties purchased with the victim’s money will be sold for the victim’s benefit.

Internal Revenue Service criminal agents seized about $1.9 million in cash from bank accounts in the name of Rachel Lee, as well as the Ferrari, the Bentley and other items. All federally seized assets will be returned to the victim after all defendants are sentenced.

Raines briefly took the stand at Thursday’s sentencing and displayed no bitterness, The Associated Press reported. He continues to wear the ring from the sham marriage and doesn’t realize that Mary Marks was a character played by Lee’s daughter.

Co-defendants Porsha Lee and Blancey Lee are scheduled for sentencing in April.

“This is a heartbreaking crime,” said Special Agent in Charge Teri Alexander of IRS
Criminal Investigation. “The level of deceit that Rachel Lee and her family resorted to is almost unconscionable. I am proud our agents could work alongside our law enforcement partners to dismantle this scam.”

“This investigation is an example of outstanding achievement in respect to the
investigative efforts by the Canby Police Department, the U.S. Attorney’s Office, and the Internal Revenue Service,” said Canby Police Chief Bret Smith. “This was a complicated investigation requiring expertise and patience from everyone involved in order to bring it to a successful resolution.”

The case was investigated by the Internal Revenue Service, Criminal Investigations and the Canby Police Department, with assistance from the Social Security Administration, Office of Inspector General; the Multnomah County Sheriff’s Office; Portland Police Bureau; and the Oregon Department of Justice. The case is being prosecuted by Assistant U.S. Attorneys Donna Maddux and AnneMarie Sgarlata.