Lawyers Beware: Trust Account Audit Scam

The North Carolina State Bar recently issued an alert to attorneys about a suspicious caller representing an entity named “Small Business Growth Alliance.” We had an opportunity to learn more about the latest scam targeting NC Lawyers. Please read and take the necessary precautions to protect you and your firm.

LM: What have you learned so far about the caller and what they are saying to firms?

NCSB: We learned that on September 21^st a company called Small Business Growth Alliance contacted a local law firm stating that the firm was due for its IOLTA trust account audit, that the company claimed to be authorized by the State Bar to audit the account, and that the company attempted to schedule the audit within 10 days of the call. The company has also called other firms and attempted to set up meetings to discuss credit card processing charges. 

LM: What do attorneys need to know about State Bar auditing procedures?

NCSB: Neither Small Business Growth Alliance nor any entity other than the State Bar is authorized to perform a State Bar random trust account audit. Auditors who are employees of the State Bar perform all random trust account audits. If you are selected for a random State Bar audit, you will be contacted by a State Bar official and will receive a written subpoena signed by State Bar officials.  

LM: What should lawyers do if they receive a suspicious call about an audit?

NCSB: If you receive a call from anyone other than an employee of the State Bar seeking to arrange a State Bar random trust account audit, please report the call to the State Bar immediately at (919) 828-4620 and, if possible, provide the caller’s contact information.

LM: How do lawyers get information about their trust accounts when they call the NC State Bar?

NCSB: A number of staff people in different departments at the NC State Bar may be able to assist with your trust account question depending upon the type of question. If you let the receptionist know the type of question you have, we can better assist you in reaching the correct staff person.

Trust account questions generally fall under three categories:

• Questions regarding trust account practices: Nicole McLaughlin for technical advice. Nicole McLaughlin and Suzanne Lever for ethics questions. Peter Bolac for reporting potential scams and employee embezzlement, or for required self-reports pursuant to Rule 1.15-2(p)
• Questions, explanations, or issues regarding a NSF (non-sufficient funds) notification: Sonja Puryear.
• Questions regarding IOLTA compliance, such as how to establish an IOLTA account or certify as to compliance: Evelyn Pursley, Claire Mills, and Mary Irvine at 919-828-0477.

LM: Can you offer some good risk management practices for law firms?

NCSB: There are several steps law firms can take to protect their firms against this and other scams. It’s important to share this information with your staff to ensure that everyone knows how to handle potential scams.

• Never give out sensitive information over the phone or via email.
• Hover over any link in an email to verify that it leads to webpage shown in the text and that it is the destination you wish to visit. For the safest practice, type the website into your browser instead of clicking the link. If in doubt that the website listed is correct, use search to find the page you want to visit.
• Do not open attachments that come from unknown senders or that come unexpectedly.
• Always verify suspicious requests using previously known contact information, or found through independent research, and not contact information provided in the request.

If you have any questions regarding scams and cybersecurity, please contact Lawyers Mutual.

Check out these additional resources:

• Frauds and Scams that Target Lawyer Trust Accounts
• New Year, Same Scams
• NC State Bar Trust Account Scams
• Practical tips to protect your firm from scams