Article 3 - Michael Kwasnik

FORENSIC, LITIGATION & VALUATION SERVICES
ANALYSIS OF ADVANCES TO AND REIMBURSEMENTS FROM LIBERTY STATE FINANCIAL HOLDINGS, CORP.
CONFIDENTIAL
Expert Report By Paul Pocalyko, CPA/CFF, CFE, MBA September 9, 2011
CONFIDENTIAL
ANALYSIS OF ADVANCES TO AND REIMBURSEMENTS FROM LIBERTY STATE FINANCIAL HOLDINGS, CORP.
Kwasnik, Kanowitz, and Associates, P.C. (KKA), formally known as Kwasnik, Rodio, Kanowitz and Buckley, P.C. (KRKB), has participated as counsel in various financial transactions and has advanced, disbursed and received funds on behalf of Liberty State Financial Holdings, Corp. (Liberty). KKA asserts that Liberty State Financial Holdings has not reimbursed KKA for all of the funds disbursed on Libertys behalf. I further understand that Liberty entered into bankruptcy in Delaware on July 29, 2011. On March 16, 2011 Liberty entered into a Consent Order under which the court ordered that no disbursements would be made to KKA after March 16, 2011.
My analysis was prepared to evaluate the amount of advances KKA made in comparison to the reimbursements that KKA obtained. I have prepared a report of my opinions along with the bases for these opinions, with respect to whether the KKA has been reimbursed for all advances made on behalf of Liberty from January 1, 2008 through June 30, 2011. My report includes additional information required by Federal Rule of Civil Procedure 26(a)(2)(B).
Our report is structured as follows: I. II. III. IV. Background Basis for Analysis Analysis Conclusion Exhibits
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I.
A.
BACKGROUND
PARTIES
KKA is a law firm with offices in Cherry Hill New Jersey and Philadelphia, Pennsylvania. KKA and KRKB performed traditional legal services and have a specialty in trust work.
Liberty is a New Jersey Corporation which had various business units that provided funding for insurance policies underwritten by outside insurance companies. Liberty purchased these policies on the secondary market. Since its bankruptcy filing, Liberty has stopped providing funding and investment services.
Liberty retained KKA to perform a variety of legal services, including serving as Libertys corporate counsel and to serve as a settlement agent for a variety of financial transactions related to the business activities of Liberty. KKA in performing those duties often advanced funds for the benefit of Liberty with Liberty providing reimbursement. In addition, certain trusts for which KKA served as trustee had transactions with operating units of Liberty.
II.
BASIS FOR ANALYSIS
The analysis and opinions in this report are based upon documents and information available to date and my experience in performing similar financial and forensic analyses. I have been qualified as an expert and presented testimony on numerous occasions, including the presentation of financial analysis in courts throughout the United States and Europe. Additionally, I am a Certified Public Accountant, a Certified Fraud Examiner and Certified in Financial Forensics. I have a Bachelor of Science in Accounting and a Masters Degree in Business Administration with a concentration in Corporate Finance. I am a Partner with ParenteBeard LLCs Forensic, Litigation & Valuation Services department. Attached, as Exhibit A, is my current curriculum vitae and information concerning my testimony history and publications.
______________________________________________________________________________________ Kwasnik, Rodio, Kanowitz & Buckley, P.C. and Kwasnik, Kanowitz & Associates, P.C.
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My analysis is based on my professional training, experience, and the documents identified in Exhibit B. The documents and information utilized are the types of
documents and information experts in my field typically rely upon in performing such an analysis. I, and others under my direct supervision, have performed this analysis with the information available to date. Additional information produced by the parties may
impact our analysis. Accordingly, we reserve the right to amend our analysis and this report should additional or updated information become available.
My firm is being compensated at rates of $95 to $450 per hour. Our compensation is not contingent upon the outcome of this matter.
III.
A.
ANALYSIS
OVERVIEW
The primary objective of my engagement was to ascertain the validity of advances KKA made on behalf of Liberty and Libertys reimbursements of those advances to KKA. I received supporting documents for the following KRKB and KKA bank accounts including evidence of the transactions that occurred between KRKB/KKA and Liberty. These accounts include: 1. Commerce/TD Bank xxx-xxx8559 (8559) ; 2. Cornerstone Bank - xxx-xxxx7874 (7874); 3. Sovereign Bank - xxxxxx6250 (6250); and 4. TD Bank xxx-xxx7653 (7653). 1
I analyzed advances and reimbursements that took place on and between January 1, 2008 and June 30, 2011. Based upon the documents I received and the analysis I performed, I
In March 2011, KRKB reorganized and became KKA. On May 11, 2011, KKA closed the KRKB TD Bank account 8559. KKA opened the TD Bank account 7653 in February 2011. ______________________________________________________________________________________ Kwasnik, Rodio, Kanowitz & Buckley, P.C. and Kwasnik, Kanowitz & Associates, P.C.
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found that KKA advanced $9,399,361 to Liberty and Liberty reimbursed $7,716,679 to KKA. 2 Table 1 provides a summary of advances to and reimbursements from Liberty.
Table 1: Summary of Advances and Reimbursements Year 2008 2009 2010 2011 Advances $ 361,064 890,245 3,438,060 4,709,992 $ 9,399,361 Reimbursements $ 1,168,524 1,683,988 916,100 3,948,067 $ 7,716,679
Refer to the attached exhibits for more details and summaries of my analysis.
B.
AUGUST REPORT
On August 22, 2011, I prepared a report of my opinions along with the bases for these opinions, with respect to whether the KKA or KRKB received any funds from Liberty that were remitted into its corporate accounts between March 16, 2011 and August 09, 2011 (August Report). The accounts in scope for the opinion I expressed in the August Report were KRKBs Commerce/TD Bank account 8559 and KKAs TD Bank account 7653.
In the August Report, I opined that none of the deposits into the 8559 and 7653 accounts between March 16, 2011 and August 09, 2011 originated from Liberty. In the present analysis I have concluded that KKA has made advances to or on behalf of Liberty after March 16, 2011. However, I have seen no information or other documentation that indicates that KKA received any reimbursements from Liberty between March 16, 2011 and June 30, 2011. This finding is consistent with the opinion I expressed in August Report.
The advances and reimbursements include legal fees.
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C.
DOCUMENTS REVIEWED AND ANALYZED
In developing my opinion regarding advances to and reimbursements from Liberty between January 1, 2008 and June 30, 2011, I reviewed and analyzed the following types of documents: 1. Bank statements for KRKB and KKAs Commerce/TD, Sovereign and Cornerstone Bank accounts; 2. Copies of checks deposited, deposit slips and related receipts; 3. Detailed lists of advances to and reimbursements from Liberty; 4. Invoices to Liberty for hourly fees; 5. Purchase, sale, and settlement agreements; 6. Various affidavits of Liberty personnel and board members; and 7. Various Liberty board meeting minutes and resolutions. D. PROCEDURES PERFORMED
In developing my opinion regarding advances to and reimbursements from Liberty between January 1, 2008 and June 30, 2011, I performed the following analytical procedures: 1. Reviewed detailed lists of advances to and reimbursements from Liberty. 2. Traced and agreed transactions to the related bank statements. 3. Matched and vouched checks, deposit slips and/or deposit receipts with the respective entries on the bank statement. 4. Analyzed the supporting documents for each transaction to ensure that the parties involved were KKA/KRKB and Liberty State Financial Holdings, Corp. 5. For transactions that were not reflected on a bank statement, deposit slip or receipt, and/or a copy of a check, I used other supporting documentation to validate the amount and the parties involved.
The detailed lists of advances to and reimbursements from Liberty were prepared by KKA. These schedules were prepared and maintained during the ordinary course of
CONFIDENTIAL
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business between KKA and Liberty. I analyzed the contents of these schedules and noted a beginning balance owed to KKA of $2,304,689 as of January 1, 2008. Within the schedules I was able to validate subsequent reimbursement of this balance through the transaction activity and detailed procedures noted above. I have not analyzed or vouched the supporting documents necessary to validate this beginning balance and do not offer an opinion of its accuracy.
As of the date of this report, the work in this matter is ongoing. I continue to receive supplemental documentation on transactions which were included within the scope of our analysis and complete our quality control process. The receipt of such documentation may impact the analysis within my report and result in adjustments to the amounts presented. Based upon the work performed, it is my opinion that any such adjustments would be nominal.
IV.
C ONCLUSION
Based on the information provided to date and the foregoing analysis and the procedures performed, I have concluded that between January 1, 2008 and June 30, 2011, KKA advanced $1,682,682 to Liberty in excess of amounts it was reimbursed. When added to the beginning balance of $2,304,689, KKA advanced a total of $3,987,371 to Liberty in excess of amount it was reimbursed. This conclusion has been reached with a reasonable level of professional and accounting certainty.
This report has been prepared within a reasonable degree of accounting and professional certainty. The procedures performed were limited to the procedures listed herein with the documents provided to date and other information obtained. Information obtained
subsequent to the date of this report may affect my analysis and this effect may be material. If requested, I will update my analysis.
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My analysis was performed solely for the information of counsel with respect to the matter specified herein. This report is not to be reproduced, distribute, disclosed or use for any other purposes without our prior approval.
PARENTEBEARD LLC
Paul Pocalyko September 9, 2011
PAUL W. POCALYKO, CPA

Partner, Philadelphia Office One Liberty Place 1650 Market Street, Suite 4500 Philadelphia, PA 19103 215.972.2504, Paul.Pocalyko@ParenteBeard.com EDUCATION/LICENSES: MBA, in Corporate Finance, Lehigh University (1985) B.S. in Accounting, Lehigh University (1982) Certified Public Accountant in Pennsylvania (CPA) Certified Fraud Examiner (CFE) Certified Financial Forensics (CFF)
PROFESSIONAL EXPERIENCE: ParenteBeard LLC - Forensic Accounting & Litigation Services. Partner (2001 - ) Provides a variety of financial consulting and accounting services to attorneys, insurance companies, governmental agencies, and public and private corporations since 1982. He has spent approximately 18 years with a Big Five accounting firm. He specializes in providing financial consulting analyses related to matters in dispute. Specifically, the majority of the analyses performed involve litigation and/or insurance claims matters. His current responsibilities include assignment planning, supervision of staff, assistance with interrogatories and expert witness testimony. Responsibilities are carried out through financial and forensic analysis of: financial statements and tax returns; general ledgers and other original books of entry; relevant contracts and agreements; and industry data. PricewaterhouseCoopers LLP - Financial Advisory Services, Director, (1982 - 2001) PROFESSIONAL AFFILIATIONS: PICPA Construction Industry Committee Board American (AICPA) and Pennsylvania Institutes of Certified Public Accountants (PICPA) Association of Certified Fraud Examiners
PUBLICATIONS: Rotten from the Core, Financial Statement Fraud Casebook, Baking the Ledgers and Cooking the Book (ACFE), Chapter 4, pgs. 35 43 (Co-author, 2011) Fraud Casebook, Lessons from the Bad Side of Business, Association of Certified Fraud Examiners (ACFE), Chapter 54, pgs. 519 - 526 (2007) Using Eichleay Formula For Home Office Overhead Claims, Wiley Law, Chapter 11, pgs. 353 - 378 (2001)
PUBLICATIONS (CONTD): Acceleration Claims, Proving & Pricing Construction Claims, Wiley Law, Chapter 4, pgs. 97 -135 (2000) Challenging Cost Claims, Proving & Pricing Construction Claims, 2nd ed., Wiley Law, Chapter 11, pgs. 11-1 - 11-30 (1996) Cost Claims, Proving & Pricing Construction Claims, Wiley Law, Chapter 12, pgs. 351 - 370 (1990) Establishing Damages, Construction Litigation: Strategies & Techniques, Wiley Law, Chapter 7, pgs. 141 - 162 (1989)
Paul W. Pocalyko, CPA

Rule 26 Disclosure - Testimony
Date 2011 Jurisdiction Court of Common Pleas Montgomery County Type Trial Matter Charles W. Bushar and Lauretta V. Bushar, husband and wife, d/b/a Swedesford Commons, L.P., f/k/a Continental Business Center, L.P. v. Pepper Hamilton, LLP and Robert Weinberg, Esquire Pennridge School District v. Ernest Bock & Sons, Inc., Eastern Electric Corporation of New Jersey t/a Ostro, Inc., Guy M. Cooper, Inc., and JBM Mechanical, Inc. f/k/a JBM Plumbing, Inc. Consolidated SWINC Estate v. Lloyds Underwriters, et al.
2010
Court of Common Pleas Bucks County
Mediation
2010
Commonwealth of Massachusetts Superior Court Department United States District Court Eastern District of Virginia Alexandria Division American Arbitration Association Dallas, Texas Commonwealth of Massachusetts Superior Court Department United States District Court Northern District of Illinois Eastern Division Circuit Court of the Tenth Judicial Circuit In and For Polk County, Florida
Trial
2010
Deposition
HCP Laguna Creek CA, LP, HCP Dartmouth MA, LP, HCP Towson MD, LP, HCP Caramillo CA, LP, and HRA Management Corporation, and HCP, Inc. v. Sunrise Senior Living Management, Inc. Lauren Engineers & Constructors, Inc. v. Bosque Power Company, LLC Consolidated SWINC Estate v. Lloyds Underwriters, et al.
2010
Arbitration
2010
Deposition
2009
Trial
National Jockey Club v. Floyd Chip Ganassi and Chip Ganassi Group, L.L.C.
2009
Trial
Paul and Desiree ONeill v. Jack L. Hamilton (individually), Jack L. Hamilton Construction, Inc.; and Jack L. Hamilton Construction of Central Florida, Inc. Paul and Desiree ONeill v. Jack L. Hamilton (individually), Jack L. Hamilton Construction, Inc.; and Jack L. Hamilton Construction of Central Florida, Inc.
2009
Circuit Court of the Tenth Judicial Circuit In and For Polk County, Florida
Deposition

Date 2009 Jurisdiction Private Arbitration, Pittsburgh, PA Type Arbitration Matter The Pittsburgh Presbyterian Foundation v. JCS Management, LLC and Aggregate Partners, L.P. Lexington Insurance Company v. County of Gloucester, et al. and
2009
United States District Court
Mediation
For the District of New Jersey

2009 United States District Court Eastern District of Wisconsin Trial
Sandra King Wilson, et al. v. County of Gloucester, et al.

Metavante Corporation v. Emigrant Savings Bank
2009
In the Chancery Court of Shelby Deposition County, Tennessee For the Thirtieth Judicial District at Memphis United States District Court Northern District of Illinois Eastern Division Deposition
Beale Street Development Corporation v. Performa Entertainment Real Estate, Inc.
2009
National Jockey Club v. Floyd Chip Ganassi and Chip Ganassi Group, L.L.C.
2008
In the Chancery Court of Shelby Testimony County, Tennessee For the Thirtieth Judicial District at Memphis American Arbitration Association Philadelphia, PA United States District Court Eastern District of Wisconsin United States District Court Eastern District of Pennsylvania United States District Court District of New Jersey Arbitration
Beale Street Development Corporation v. Performa Entertainment Real Estate, Inc.
2008
IMS Health Incorporated v. Medco Health Solutions, Inc.
2008
Deposition
Metavante Corporation v. Emigrant Savings Bank
2008
Deposition
Mack Trucks, Inc. v. RDK Truck Sales and Service, Inc. and RDK Municipal Truck Center, Inc. The Dolan Group, VI v. Fresenius USA Manufacturing, Inc.
2008
Deposition

Date 2008 Jurisdiction American Arbitration Association Philadelphia, PA U.S. Bankruptcy Court Western District of Kentucky (Louisville) American Arbitration Association Philadelphia, PA Type Arbitration Matter Metropolitan Regional Counsel of Carpenters v. EDIS Company Inc., et al. Jillians Entertainment Holdings, et al. v. Sureshot Redemption
2007
Deposition
2007
Testimony
Temple University Health System, Inc. and Hunting Fox TCI III, L.P.
Exhibit B
Kwasnik, Rodio, Kanowitz & Buckley, P.C. Kwasnik, Kanowitz & Associates, P.C. Summary of Advances to and Reimbursements from Liberty State Financial Holdings, Corp.
Description KKA and KRKB Non-bates Labeled Documents Certification of Michael W. Kwasnik, Esquire, and the Consent order of March 16, 2011. Copies of deposit slips, deposit tickets, and deposited checks between parties. Cornerstone Account - xxx-xxxx7874, dated April 2008 through June 2009. Detail Transaction Ledgers. Letter from Financial Pacific to Michael Kwasnik regarding a lease for computer hardware for Liberty State Financial Holdings Corp., dated January 13, 2011. Letter from Ronald Fenigstein, regarding transactions between KRKB, KKA, Michael W. Kwasnik, and Liberty State Financial Holdings Corp. dated August 17, 2011. Letter from Ronald Fenigstein, regarding transactions between KRKB, KKA, Michael W. Kwasnik, and Liberty State Financial Holdings Corp. dated June 13, 2011. Preliminary Accountant's report for Liberty State Financial Group prepared by John M. Rizzo, CPA, dated June 2, 2011. Purchase, sale, and settlement agreements. Sovereign Bank - xxxxxx6250, dated March 2009 through February 2010. TD Bank Statements for account xxx-xxx7653, February 2011 through June 30, 2011. TD Bank Statements for account xxx-xxx8559, dated January 2008 through May 11, 2011. Various Affidavits of Liberty personnel and board members. Various Liberty board meeting minutes and resolutions.
Independent Research Dow Jones Financial Information sec.gov Article, Investing in Death: Are Life Settlement Securizations the New Trend?, dated October 2009. www.kkalaw.com www.topix.com www.bbb.org www.jerseybusinessleaders.com/Liverty-State-Financial.html
Privileged & Confidential Attorney Work Product
Page 1 of 1
Exhibit 1.0 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Kwasnik, Kanowitz & Associates, P.C. Summary of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. January 2008 - June 2011
Year Commerce/TD Bank 2008 $ 2009 2010 2011 Total $ Cornerstone Bank 2008 $ 2009 Total $ Sovereign Bank 2009 2010
Debit 227,766 287,697 470,979 1,221,542 2,207,983 $
Credit 1,118,581 1,494,188 835,100 3,447,869
4,200 335,768 339,968
$ $
49,942 49,942
$ Total $
$ $
189,800 81,000 270,800
Other Transactions 2008 2009 2010 2011
$ Grand Total $
129,098 266,781 2,967,081 3,488,450 6,851,409 9,399,360
$ $
3,948,067 3,948,067 7,716,679 1 of 1
Exhibit 2.0 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Kwasnik, Kanowitz & Associates, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. Commerce/TD Bank Summary January 2008 - June 2011
Month 2008 January $ February March April May June July August September October November December Total $ 2009 January February March April May June July August
Debit 6,300 40,980 6,200 1,000 500 12,000 24,600 59,836 50,000 26,350 227,766 $
Credit 152,250 132,800 87,250 51,500 27,000 126,300 190,100 188,474 162,907 1,118,581
16,000 38,000 71,360 46,500 29,000 13,820 11,500 13,400
54,100 24,500 88,800 209,000 241,000 338,188 216,500 122,500 1 of 3
Month September October November December Total $ 2010 January $ February March April May June July August September October November December Total $ 2011 January February
Debit 35,150 2,880 9,372 714 287,697
Credit 99,100 52,500 16,000 32,000 1,494,188
18,445 40,005 8,225 16,241 20,853 7,000 3,500 2,000 33,037 121,325 44,000 156,347 470,979
162,000 89,400 78,700 85,500 149,000 31,000 87,000 69,000 52,000 31,500 835,100
319,619 124,307
2 of 3
Month March April May June Total $ Grant Total $
Debit 127,890 258,677 59,195 331,854 1,221,542 2,207,983
Credit 3,447,869
$ $
3 of 3
Exhibit 2.1 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Commerce/TD Bank Account xxxxxx8559 January 2008 - December 20081
Date2 January 1/2/2008 1/3/2008 1/4/2008 1/4/2008 1/4/2008 1/10/2008 1/14/2008 1/17/2008 1/23/2008 1/23/2008 1/28/2008 1/31/2008 February 2/4/2008 2/4/2008 2/6/2008 2/8/2008 2/11/2008 2/12/2008 2/20/2008 2/22/2008 2/25/2008 2/25/2008 2/25/2008 2/25/2008
Description 8231 Deposit Deposit Deposit Deposit 8305 Deposit 8352 Deposit Deposit 8331 Deposit
Payor3 KRKB KRKB KRKB KRKB LSF KRKB LSF KRKB LSF LSF KRKB KRKB
Payee3 LSF KRKB KRKB KRKB KRKB LSF KRKB LSF KRKB KRKB LSF KRKB $
Debit 1,500 2,500 1,000 1,300 6,300 2,100 1,094 2,100 6,325 1,313 $
Credit 2,000 3,000 8,500 83,500 4,250 13,000 31,000 7,000 152,250 7,500 2,000 1,800 2,500 4,000 32,000 12,000 1 of 6
Total $ Deposit Deposit Deposit 8391 Deposit Deposit Deposit Deposit 8443 8447 8495 8446 KRKB LSF LSF KRKB LSF LSF LSF LSF KRKB KRKB KRKB KRKB KRKB KRKB KRKB LSF KRKB KRKB KRKB KRKB LSF LSF LSF LSF $
$ $
Privileged and Confidential Attorney Work Product
Date2 2/25/2008 2/25/2008 2/25/2008 2/25/2008 2/25/2008 2/25/2008 2/26/2008 2/29/2008 2/26/20084 March 3/3/2008 3/7/2008 3/14/2008 3/18/2008 3/18/2008 3/21/2008 3/24/2008 3/24/2008 3/26/2008 3/28/2008
Description 8449 8450 8451 8452 8496 8448 Deposit Deposit 8490
Payor3 KRKB KRKB KRKB KRKB KRKB KRKB LSF LSF KRKB
Payee3 LSF LSF LSF LSF LSF LSF KRKB KRKB Other Total $
Debit 1,801 1,385 1,330 4,665 3,000 1,867 14,000 40,980 6,200 6,200 $ $
Credit 1,000 70,000 132,800 20,000 9,000 750 11,000 10,000 5,000 8,000 12,500 11,000 87,250
8500 Deposit Deposit Deposit Deposit Deposit Deposit Deposit Deposit Deposit
KRKB LSF LSF LSF LSF LSF LSF LSF LSF LSF
LSF KRKB KRKB Other KRKB KRKB Cash KRKB KRKB Cash
Total $ April 4/2/2008 4/8/2008
Deposit Deposit
Liberty State Benefits LSF
KRKB KRKB
500 9,500
2 of 6
Date2 4/9/2008 4/11/2008 4/28/2008 4/29/2008
Description Deposit Deposit 8616 Deposit
Payor3 LSF LSF KRKB LSF
Payee3 KRKB KRKB Other KRKB Total $
Debit 1,000 1,000
Credit 18,500 20,000 3,000 $ 51,500
June 6/18/2008
8636
KRKB
Other
$ Total $
500 500
$ $
August 8/26/2008 8/29/2008
Withdrawal Wire
KRKB LSF
LSF KRKB
$ Total $
12,000 12,000
$ $
27,000 27,000
September 9/3/2008 9/5/2008 9/16/2008 9/18/2008 9/19/2008 9/22/2008 9/24/2008 9/24/2008 9/26/2008 9/30/2008
Wire Wire Wire 8783 Wire Wire 8802 8800 Wire Wire
LSF LSF LSF KRKB LSF LSF KRKB KRKB LSF LSF
KRKB KRKB KRKB Other KRKB KRKB Other LSF KRKB KRKB
Total $ Privileged and Confidential Attorney Work Product
6,000 1,600 17,000 24,600
30,000 10,000 20,000 4,000 55,000 1,300 6,000 126,300 3 of 6
Date2 October 10/1/2008 10/1/2008 10/3/2008 10/10/2008 10/15/2008 10/16/2008 10/16/2008 10/17/2008 10/17/2008 10/20/2008 10/20/2008 10/20/2008 10/20/2008 10/20/2008 10/20/2008 10/20/2008 10/20/2008 10/20/2008 10/20/2008 10/21/2008 10/21/2008 10/22/2008 10/24/2008 10/24/2008 10/27/2008
Description
Payor3
Payee3
Debit
Credit
8811 Wire Wire Wire Wire 8886 8891 8892 8893 8863 8864 8865 8866 8867 8868 8869 8871 8872 Wire 8931 Wire 8932 Wire Wire 8952
KRKB LSF LSF LSF LSF KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB LSF KRKB LSF KRKB LSF LSF KRKB
Other KRKB KRKB KRKB KRKB Other Other Other Other LSF LSF LSF LSF LSF LSF LSF LSF LSF KRKB LSF KRKB Other KRKB KRKB Other
5,000 210 350 6,000 6,800 1,313 796 1,801 1,385 1,108 1,056 4,665 1,400 2,952 17,000 6,000 2,000
100 10,000 40,000 20,000 20,000 40,000 30,000 15,000 4 of 6
Date2 10/29/2008
Description Wire
Payor3 LSF
Payee3 KRKB Total $
Debit 59,836
Credit 15,000 $ 190,100
November 11/4/2008 11/3/2008 11/6/2008 11/10/2008 11/10/2008 11/10/2008 11/10/2008 11/10/2008 11/13/2008 11/13/2008 11/18/2008 11/19/2008
8982 Wire Wire 8980 8979 8981 Wire Wire Wire Wire Wire Wire
KRKB LSF LSF KRKB KRKB KRKB LSF LSF LSF LSF LSF LSF
Other KRKB KRKB Other Other Other KRKB KRKB KRKB KRKB KRKB KRKB
Total $ December 12/1/2008 12/1/2008 12/1/2008 12/1/2008 12/3/2008 12/11/2008 12/12/2008 12/17/2008
12,500 12,500 12,500 12,500 50,000
40,000 40,000 10,000 60,000 4,212 13,183 13,080 8,000 188,474
Wire Wire Wire Wire Wire Wire Wire 9135
KRKB LSF LSF LSF LSF KRKB KRKB KRKB
LSF KRKB KRKB KRKB KRKB LSF LSF Other
1,000 15,000 10,000 350
61,786 48,401 5,396 37,323 5 of 6
Date2 12/18/2008
Description Wire
Payor3 LSF
Payee3 KRKB Total $ Grand Total $
Debit 26,350 227,766
Credit 10,000 $ 162,907 $ 1,118,581
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, Corp.. 2 - I received bank statements and related support for January 2008 - May 11, 2011 for this account. I did not note any relevant transactions in May and July 2008. 3 - In certain instances, transactions may have the Payor or Payee as a person or an entity other than Liberty State Financial Holdings, Corp. or KRKB. I understand that KRKB performed these transactions with third parties for the benefit of Liberty State Financial Holdings, Corp. Additionally, some transactions may have KRKB as the Payor and Payee. I understand that this is the result of a Trust/Trustee relationship between KRKB and Liberty State Financial Holdings, Corp..
6 of 6
Exhibit 2.2
Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Commerce/TD Bank Account xxxxxx8559 January 2009 - December 20091
Date January 1/5/2009 1/5/2009 1/5/2009 1/12/2009 1/12/2009 1/14/2009 1/14/2009 1/22/2009 1/27/2009 February 2/4/2009 2/5/2009 2/9/2009 2/11/2009 2/24/2009 2/26/2009 March 3/6/2009 3/9/2009 3/16/2009 3/17/2009 3/23/2009 3/23/2009 3/23/2009 3/25/2009 3/26/2009 3/27/2009 3/31/2009
Description Wire Wire Wire Wire Deposit Wire Wire Wire Wire
Payor2 LSF LSF LSF LSF LSF KRKB KRKB LSF KRKB
Payee2 KRKB KRKB KRKB KRKB KRKB LSF LSF KRKB LSF $
Debit 8,000 5,000 3,000 16,000 28,000 10,000 38,000 860 35,000 28,000 2,500 5,000 71,360 $
Credit 1,000 6,000 7,500 20,000 11,600 8,000 54,100 1,000 5,000 2,000 16,500 24,500 3,800 5,000 25,000 15,000 20,000 20,000 88,800
Total $ Wire Wire Wire Wire Wire Wire LSF LSF KRKB LSF KRKB LSF KRKB KRKB LSF KRKB LSF KRKB $
$ $
Total $ 9366 Wire Wire Wire Wire Wire Wire Wire Wire Wire Wire KRKB KRKB LSF LSF LSF KRKB LSF KRKB KRKB LSF LSF Other LSF KRKB KRKB KRKB LSF KRKB LSF Other KRKB KRKB $
$ $
Total $ April 4/2/2009 4/3/2009
Wire Wire
LSF LSF
KRKB KRKB
10,000 10,000
1 of 6
Exhibit 2.2
Date 4/6/2009 4/8/2009 4/14/2009 4/15/2009 4/15/2009 4/15/2009 4/16/2009 4/17/2009 4/20/2009 4/20/2009 4/22/2009 4/29/2009
Description Wire 9553 Wire Wire 9572 9571 Wire Wire Wire Wire Wire Wire
Payor2 LSF KRKB LSF LSF KRKB KRKB LSF KRKB LSF LSF LSF LSF
Payee2 KRKB Other KRKB KRKB Other Other KRKB LSF KRKB KRKB KRKB KRKB Total $
Debit 2,000 3,000 1,500 40,000 46,500
Credit 30,000 15,000 10,000 70,000 12,000 30,000 20,000 2,000 $ 209,000
May 5/1/2009 5/4/2009 5/7/2009 5/8/2009 5/11/2009 5/12/2009 5/15/2009 5/19/2009 5/21/2009 5/22/2009 5/27/2009 5/28/2009 5/29/2009
Wire 9674 Wire Wire 9729 Wire Wire Wire Wire Wire Wire Wire Wire
LSF KRKB KRKB LSF KRKB KRKB LSF LSF LSF LSF LSF LSF LSF
KRKB Other Other KRKB LSF LSF KRKB KRKB KRKB KRKB KRKB KRKB KRKB
Total $ June 6/1/2009 6/1/2009 6/3/2009 6/4/2009 6/5/2009
1,000 3,000 8,000 17,000 29,000
50,000 80,000 8,000 20,000 9,000 40,000 10,000 4,000 20,000 241,000
Wire Deposit Wire Wire Wire
LSF LSF LSF LSF LSF
KRKB KRKB KRKB KRKB KRKB
5,000 8,000 1,500 20,000 3,000
2 of 6
Exhibit 2.2
Date 6/5/2009 6/12/2009 6/15/2009 6/15/2009 6/15/2009 6/15/2009 6/16/2009 6/17/2009 6/17/2009 6/18/2009 6/18/2009 6/18/2009 6/18/2009 6/18/2009 6/19/2009 6/22/2009 6/24/2009 6/24/2009 6/24/2009 6/24/2009 6/24/2009 6/24/2009 6/24/2009 6/24/2009 6/24/2009 6/24/2009 6/25/2009 6/26/2009 6/30/2009
Description Wire Wire 9906 9908 9909 Deposit 9904 Deposit Deposit 9905 9907 Deposit Deposit 9916 Deposit Wire Wire Deposit Deposit Deposit Deposit Deposit Deposit Wire Wire Wire Wire Wire Wire
Payor2 LSF LSF KRKB KRKB KRKB LSF KRKB LSF LSF KRKB KRKB LSF LSF KRKB LSF LSF LSF Other Other Other Other Other Other KRKB KRKB KRKB LSF LSF LSF
Payee2 KRKB KRKB Other Other Other KRKB Other KRKB KRKB Other Other KRKB KRKB Other KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB LSF Other LSF KRKB KRKB KRKB Total $
Debit 1,172 958 1,283 1,284 103 1,587 2,000 500 1,000 3,932 13,820
Credit 2,000 12,000 35,000 500 4,800 20,000 5,000 40,000 40,000 60,000 1,172 103 1,284 1,283 958 1,587 40,000 10,000 25,000 $ 338,188
July 7/2/2009 7/6/2009 7/7/2009 7/8/2009
Wire Wire Wire Wire
LSF LSF LSF LSF
KRKB KRKB KRKB KRKB
10,000 4,000 10,000 5,000
3 of 6
Exhibit 2.2
Date 7/9/2009 7/13/2009 7/13/2009 7/14/2009 7/16/2009 7/23/2009 7/24/2009 7/24/2009 7/27/2009 7/31/2009
Description Wire Wire Wire Deposit Deposit Deposit Deposit Deposit Deposit Wire
Payor2 KRKB KRKB LSF LSF LSF LSF LSF LSF LSF LSF
Payee2 LSF Other KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB Total $
Debit 1,500 10,000 11,500
Credit 50,000 22,000 20,000 21,500 12,500 10,000 1,500 50,000 $ 216,500
August 8/5/2009 8/6/2009 8/6/2009 8/10/2009 8/13/2009 8/14/2009 8/19/2009 8/21/2009 8/26/2009 8/27/2009 8/28/2009 8/31/2009
Wire Deposit Deposit Wire Deposit Deposit Deposit Deposit Deposit Deposit Wire Deposit
LSF LSF LSF KRKB LSF LSF LSF LSF LSF LSF KRKB LSF
KRKB KRKB KRKB LSF KRKB KRKB KRKB KRKB KRKB KRKB LSF KRKB
Total $ September 9/2/2009 9/3/2009 9/4/2009 9/4/2009 9/9/2009 9/10/2009 9/10/2009 9/10/2009
1,100 12,300 13,400
20,000 18,000 1,000 15,000 15,000 13,500 5,000 10,000 15,000 10,000 122,500
10247 Deposit Deposit Deposit Wire 10279 10280 10285
KRKB LSF LSF LSF KRKB KRKB KRKB KRKB
LSF KRKB KRKB KRKB LSF LSF LSF Other
4,000 17,000 3,500 1,850 3,000
1,000 4,000 8,500 -
4 of 6
Exhibit 2.2
Date 9/10/2009 9/10/2009 9/10/2009 9/10/2009 9/10/2009 9/14/2009 9/14/2009 9/16/2009 9/17/2009 9/24/2009 9/25/2009 9/29/20093
Description 10286 10288 10276 Deposit Deposit Deposit Deposit Deposit Deposit Deposit Deposit Deposit
Payor2 KRKB KRKB KRKB LSF LSF LSF LSF LSF LSF LSF LSF LSF
Payee2 Other Other Other KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB Total $
Debit 2,000 3,000 800 35,150 $
Credit 4,000 1,000 15,000 5,000 30,000 5,600 5,000 5,000 15,000 99,100
October 10/2/2009 10/5/2009 10/9/2009 10/13/2009 10/15/2009 10/15/2009 10/16/2009 10/21/2009 10/21/2009 10/23/2009
Deposit Deposit Deposit Deposit Wire 10454 10460 10471 Wire Wire
LSF LSF LSF LSF KRKB KRKB KRKB KRKB LSF LSF
KRKB KRKB KRKB KRKB LSF Other Other Other KRKB KRKB
Total $ November 11/3/2009 11/6/2009 11/9/2009 11/9/2009 11/10/2009 11/10/2009 11/10/2009 11/13/2009
350 1,000 530 1,000 2,880
5,000 20,000 5,000 15,000 6,000 1,500 52,500
10498 Deposit 10499 10520 10493 10501 10503 Wire
KRKB LSF KRKB KRKB KRKB KRKB KRKB KRKB
Other KRKB Other Other Other Other Other Other
714 600 179 1,521 259 100 5,000
10,000 -
5 of 6
Exhibit 2.2
Date 11/23/2009 11/25/2009
Description 10568 Wire
Payor2 KRKB LSF
Payee2 Other KRKB Total $
Debit 1,000 9,372
Credit 6,000 $ 16,000
December 12/2/2009 12/3/2009 12/18/2009
Wire 10587 Wire
LSF KRKB LSF
KRKB Other KRKB
Total $ Grand Total $
714 714 287,697
3,000 29,000 32,000
$ 1,494,188
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, Corp.. 2 - In certain instances, transactions may have the Payor or Payee as a person or an entity other than Liberty State Financial Holdings, Corp. or KRKB. I understand that KRKB performed these transactions with third parties for the benefit of Liberty State Financial Holdings, Corp. Additionally, some transactions may have KRKB as the Payor and Payee. I understand that this is the result of a Trust/Trustee relationship between KRKB and Liberty State Financial Holdings, Corp.. 3 - I received a copy of the check deposited and the related deposit receipt showing that $15,000 was deposited into KRKB account '8559; however, this deposit transaction was not listed in the account activity on the corresponding bank statement.
6 of 6
Exhibit 2.3 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Commerce/TD Bank Account xxxxxx8559 1 January 2010 - December 2010
Date January 1/5/2010 1/6/2010 1/11/2010 1/11/2010 1/11/2010 1/13/2010 1/13/2010 1/20/2010 1/20/2010 1/21/2010 1/22/2010 1/25/2010 1/28/2010 February 2/5/2010 2/5/2010 2/5/2010 2/5/2010 2/5/2010 2/8/2010 2/17/2010 2/17/2010 2/19/2010 2/19/2010 2/19/2010 2/23/2010 March 3/1/2010
Description 1005 Wire 2036 2082 Wire 2046 Wire Wire Wire 10716 Deposit 10721 Wire
Payor2 KRKB LSF KRKB KRKB LSF KRKB LSF KRKB KRKB KRKB LSF KRKB LSF
Payee2 Other KRKB Other Other KRKB Other KRKB LSF Other Other KRKB Other KRKB $
Debit 2,500 714 714 2,000 5,000 1,000 1,813 4,704 18,445 1,500 18,000 16,000 1,000 1,500 780 1,225 40,005 1,200 $
Credit 80,000 45,000 11,000 10,000 16,000 162,000 1,000 6,000 2,400 30,000 50,000 89,400 1 of 6
Total $ Wire 10727 10728 10732 2121 Wire Wire Wire Wire 2150 2153 Wire KRKB KRKB KRKB KRKB KRKB LSF LSF LSF LSF KRKB KRKB LSF LSF LSF LSF Other Other KRKB KRKB KRKB KRKB Other Other KRKB $
$ $
Total $ 10761 KRKB Other $
$ $
Date 3/8/2010 3/12/2010 3/16/2010 3/19/2010 3/22/2010 3/25/2010 3/29/2010 3/29/2010 3/29/2010 3/30/2010 3/30/2010
Description Wire Deposit Wire Deposit Deposit Deposit Deposit Wire 10784 Wire 10785
Payor2 LSF LSF LSF LSF LSF LSF LSF KRKB KRKB KRKB KRKB
Payee2 KRKB KRKB KRKB KRKB KRKB KRKB KRKB Other Other LSF LSF Total $
Debit 2,000 1,025 3,000 1,000 8,225
Credit 10,000 6,000 8,000 5,000 13,000 26,000 10,700 $ 78,700
April 4/1/2010 4/5/2010 4/5/2010 4/8/2010 4/13/2010 4/15/2010 4/16/2010 4/20/2010 4/21/2010 4/22/2010 4/22/2010 4/22/2010 4/23/2010 4/23/2010 4/23/2010 4/26/2010
10770 10771 10801 Deposit Deposit Deposit 10820 Wire 2270 2267 2268 Deposit 2269 2274 2275 Deposit
KRKB KRKB KRKB LSF LSF LSF KRKB KRKB KRKB KRKB KRKB LSF KRKB KRKB KRKB LSF
Other LSF Other KRKB KRKB KRKB Other Other Other Other Other KRKB Other Other Other KRKB
2,000 1,500 1,000 1,000 1,500 1,500 259 1,415 162 4,180 70 -
7,000 20,000 10,000 19,000 10,000
2 of 6
Date 4/27/2010 4/29/2010 4/30/2010
Description Wire Deposit Deposit
Payor2 KRKB LSF LSF
Payee2 Other KRKB KRKB Total $
Debit 1,655 16,241
Credit 6,500 13,000 $ 85,500
May 5/4/2010 5/5/2010 5/10/2010 5/11/2010 5/11/2010 5/11/2010 5/14/2010 5/19/2010 5/24/2010 5/26/2010 5/27/2010 5/27/2010 5/28/2010 5/28/2010 5/28/2010
Wire 2279 Deposit Deposit Deposit Wire 10852 Deposit Deposit Deposit Deposit Wire 2381 Deposit Deposit
KRKB KRKB LSF LSF LSF KRKB KRKB LSF LSF LSF LSF KRKB KRKB LSF LSF
Other Other KRKB KRKB KRKB Other Other KRKB KRKB KRKB KRKB Other Other KRKB KRKB
Total $ June 6/3/2010 6/4/2010 6/4/2010 6/7/2010 6/15/2010 6/18/2010
5,000 1,528 1,000 2,000 2,000 9,325 20,853
5,000 25,000 10,000 48,000 8,000 20,000 10,000 10,000 13,000 149,000
Deposit Deposit Wire Deposit Deposit Wire
LSF LSF KRKB LSF LSF KRKB
KRKB KRKB Other KRKB KRKB Other
5,000 1,000
10,000 8,000 10,000 3,000 -
3 of 6
Date 6/23/2010
Description Wire
Payor2 KRKB
Payee2 LSF Total $
Debit 1,000 7,000
Credit $ 31,000
July 7/1/2010 7/7/2010 7/13/2010 7/23/2010 7/29/2010 7/29/2010
Deposit Wire Deposit 2499 Deposit Deposit
LSF KRKB LSF KRKB LSF LSF
KRKB Other KRKB Other KRKB KRKB
Total $ August 8/12/2010 8/23/2010 8/23/2010 8/27/2010
1,500 2,000 3,500
17,000 5,000 10,000 55,000 87,000
Deposit Deposit 10875 Deposit
LSF LSF KRKB LSF
KRKB KRKB Other KRKB
Total $ September 9/1/2010 9/2/2010 9/2/2010 9/7/2010 9/9/2010 9/14/2010 9/14/2010 9/14/2010 9/15/2010 9/17/2010 9/22/2010
2,000 2,000
50,000 4,000 15,000 69,000
Deposit 2636 2635 Deposit Deposit 2673 2674 2676 10892 2681 2714
LSF KRKB KRKB LSF LSF KRKB KRKB KRKB KRKB KRKB KRKB
KRKB Other Other KRKB KRKB Other Other Other Other Other Other
6,000 6,000 100 50 50 1,000 1,200 5,000
5,000 27,000 20,000 4 of 6
Date 9/23/2010 9/24/2010 9/29/2010 9/29/2010 9/29/2010 9/29/2010
Description 10885 2691 2720 2717 2718 2723
Payor2 KRKB KRKB KRKB KRKB KRKB KRKB
Payee2 Other Other Other Other Other Other Total $
Debit 1,700 3,727 4 4,264 4 3,938 33,037
Credit $ 52,000
October 10/1/2010 10/15/2010 10/18/2010 10/18/2010 10/25/2010 10/29/2010
Deposit 2790 2797 2798 11136 11178
LSF KRKB KRKB KRKB KRKB KRKB
KRKB Other Other Other LSF LSF
Total $ November 11/3/2010 11/8/2010 11/9/2010
6,000 1,325 2,000 73,000 39,000 121,325
31,500 31,500
2828 Wire 11207
KRKB KRKB KRKB
LSF LSF LSF
Total $ December 12/28/2010 12/6/2010 12/7/2010 12/15/2010 12/17/2010 12/17/2010
17,000 12,000 15,000 44,000
Wire Wire 11296 2929 Wire 2947
KRKB KRKB KRKB KRKB KRKB KRKF
Other LSF Other LSF LSF LSF
6,397 20,000 2,000 20,000 20,000 12,000
5 of 6
Date 12/23/2010 12/24/2010 12/28/2010 12/28/2010 12/28/2010 12/28/2010 12/28/2010 12/30/2010 12/30/2010
Description 2988 Debit Wire Wire Wire Wire Wire Wire Wire
Payor2 KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB
Payee2 LSF Other LSF LSF Other Other Other Other Other Total $ Grand Total $
Debit 15,000 4,000 20,000 31,000 1,400 700 600 1,900 1,350 156,347 470,979
Credit $ $ 835,100
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, Corp.. 2 - In certain instances, transactions may have the Payor or Payee as a person or an entity other than Liberty State Financial Holdings, Corp. or KRKB. I understand that KRKB performed these transactions with third parties for the benefit of Liberty State Financial Holdings, Corp. Additionally, some transactions may have KRKB as the Payor and Payee. I understand that this is the result of a Trust/Trustee relationship between KRKB and Liberty State Financial Holdings, Corp..
6 of 6
Exhibit 2.4 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Commerce/TD Bank Account xxxxxx8559 January 2011 - May 20111
Date2 January 1/3/2011 1/13/2011 1/14/2011 1/14/2011 1/17/2011 1/18/2011 1/18/2011 1/21/2011 1/25/2011 February 2/4/2011 2/11/2011 2/14/2011 2/15/2011 2/15/2011 2/15/2011 2/17/2011 2/17/2011 2/18/2011 2/22/2011 2/23/2011 2/25/2011 2/28/2011
Description 3009 3075 3093 WIRE 3103 3104 3105 3131 3158
Payor3 KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB
Payee3 LSF LSF LSF Other Other Other Other LSF LSF $
Debit 30,000 $ 70,000 28,000 2,347 8 9,703 6,561 30,000 143,000 319,619 $ 1,000 $ 15,000 1,000 1,000 454 2,000 30,000 2,000 2,000 14,000 42,000 4,142 8
Credit 1 of 3
Total $ WIRE 3201 3226 3225 3223 3240 3273 3278 WIRE 3283 3296 3358 3356 KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB Other Other Other Other Other Other LSF Other Other LSF LSF Other Other $
Date2 2/28/2011 March 3/4/2011 3/9/2011 3/15/2011 3/15/2011 3/15/2011 3/15/2011 3/16/2011 3/16/2011 3/16/2011 3/16/2011 3/25/2011 3/25/2011 3/25/2011 3/25/2011 3/25/2011 3/31/2011
Description 3357
Payor3 KRKB
Payee3 Other Total $
Debit 9,703 124,307
Credit $ -
Wire 3439 3470 3469 Debit 3472 Wire 3477 3474 Debit 3510 3509 3504 3505 3506 324
KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB
Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other
Total $ April 4/15/2011 4/15/2011 4/15/2011
2,000 $ 2,000 1,000 1,000 253 2,500 2,000 1,500 21,500 568 69,677 212 16,142 6,325 20 1,193 127,890 $
Wire Wire 3548
KRKB KRKB KRKB
Other Other Other
50,000 $ 200,000 1,000
2 of 3
Date2 4/15/2011 4/21/2011 4/21/2011
Description 3547 3566 3567
Payor3 KRKB KRKB KRKB
Payee3 Other Other Other Total $ Grand Total $
Debit Credit 1,000 2,000 1,500 255,500 $ 827,316 $ -
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, Corp.. 2 - I received bank statement for January 2008 - May 11, 2011 for this account. I did not note any relevant transactions in May 2011. 3 - In certain instances, transactions may have the Payor or Payee as a person or an entity other than Liberty State Financial Holdings, Corp. or KRKB. I understand that KRKB performed these transactions with third parties for the benefit of Liberty State Financial Holdings, Corp..
3 of 3
Exhibit 2.5
Kwasnik, Kanowitz & Associates, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For TD Bank Account xxx-xxx7653 February 2011 - June 20111
Date2 April 4/29/2011 4/28/2011
Description 1293 1288
Payor3 KRKB KKA
Payee3 Other Other $ Total $
Debit 1,677 1,500 3,177 $ $
Credit -
May 5/4/2011 5/4/2011 5/4/2011 5/4/2011 5/4/2011 5/9/2011 5/9/2011 5/9/2011 5/9/2011 5/9/2011 5/9/2011 5/10/2011 5/10/2011 5/12/2011 5/13/2011 5/13/2011 5/18/2011
1302 1322 1329 1327 1325 1370 1369 1368 1367 1366 1365 1384 1376 1372 1371 1364 1406
KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA
Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other
Total $ June 6/16/2011 6/13/2010 6/9/2011 6/10/2011 6/10/2011 6/13/2011 6/13/2011 6/13/2011
1,500 6,927 1,500 2,150 1,000 4,964 2,000 3,000 1,761 3,000 2,000 15,932 1,500 5,000 5,000 600 1,361 59,195
1449 1547 1443 1467 Wire 1540 1548 1546
KKA KKA KKA KKA KKA KKA KKA KKA
Other Other Other Other Other Other Other Other
1,570 1,500 2,000 2,500 250,000 1,000 1,500 5,000
1 of 2
Exhibit 2.5
Kwasnik, Kanowitz & Associates, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For TD Bank Account xxx-xxx7653 February 2011 - June 20111
Date2 6/13/2011 6/13/2011 6/14/2011 6/14/2011 6/15/2011 6/16/2011 6/16/2011 6/16/2011 6/17/2011 6/17/2011 6/20/2011
Description 1539 1513 1542 1468 1438 1448 1507 1506 1510 1509 1508
Payor3 KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA KKA
Payee3 Other Other Other Other Other Other Other Other Other Other Other Total $ Grand Total $
Debit 1,000 3,000 9,605 20,000 30,000 1,570 1,000 103 214 138 154 331,854 394,226
Credit $ $ -
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, 3 - I received bank statement for February 2011 - June 2011 for this account. I did not note any relevant transactions in February and March 2011. 4 - In certain instances, transactions may have the Payor or Payee as a person or an entity other than Liberty State Financial Holdings, Corp. or KRKB. I understand that KRKB performed these transactions with third parties for the benefit of Liberty State Financial Holdings, Corp..
2 of 2
Exhibit 3.0 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. Cornerstone Bank Summary January 2008 - June 2009
Month 2008 January $ February March April May June July August September October November December Total $ 2009 January February March April May June
Debit $ 2,200 1,000 1,000 4,200 $
Credit 39,500 4,500 5,942 49,942
Total $ Grant Total $
700 335,068 335,768 339,968
$ $
49,942
1 of 1
Exhibit 3.1
Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Cornerstone Bank Account xxx-xxxx7874 1 April 2008 - December 2008
Date2 April 4/21/2008
Description 1053
Payor3 KRKB
Payee3 Other $ Total $
Debit 2,200 2,200 $ $
Credit -
May 5/30/2008
1184
KRKB
LSF
$ Total $
1,000 1,000
$ $
June 6/2/2008 6/5/2008 6/19/2008
1180 Deposit Deposit
KRKB LSF LSF
LSF $ KRKB KRKB Total $
1,000 1,000
5,000 34,500 39,500
August 8/13/2008
Deposit
LSF
Other
$ Total $
$ $
4,500 4,500
November 11/6/2008
Deposit
LSF
KRKB $ Total $ Grand Total $
4,200
$ $ $
5,942 5,942 49,942
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, Corp.. 2 - We received bank statements from April 2008 - June 2009 for this account. I did not note ay relevant transactions in July, September, October or December of 2008. 3 - In certain instances, transactions may have the Payor or Payee as a person or an entity other than Liberty State Financial Holdings, Corp. or KRKB. I understand that KRKB performed these transactions with third parties for the benefit of Liberty State Financial Holdings, Corp..
1 of 1
Exhibit 3.2 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Cornerstone Bank Account xxx-xxxx7874 January 2009 - June 20091
Date2 January 1/9/2009 February 2/13/2009 2/13/2009 2/13/2009 2/17/2009 2/17/2009 2/17/2009 2/18/2009 2/18/2009 2/19/2009 2/20/2009 2/23/2009 2/23/2009 2/24/2009 2/24/2009 2/24/2009 2/24/2009 2/24/2009 2/24/2009 2/24/2009 2/24/2009 2/24/2009
Description 1383
Payor3 KRKB
Payee3 LSF $ Total $ $
Debit 700 700 $ $
Credit -
1386 1395 1396 1401 1393 1394 1404 1392 Wire 1407 1436 1437 1424 1426 1427 1428 1429 1430 1431 1433 1434
KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB KRKB
LSF Other LSF Other Other Other LSF Other LSF LSF Other Other LSF Other Other Other Other Other Other Other Other
20,000 $ 1,500 33,000 500 1,500 2,500 10,000 1,500 25,000 15,000 562 2,307 105,000 1,777 1,369 1,097 1,046 4,586 1,130 1,410 2,962
1 of 2
Exhibit 3.2 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Cornerstone Bank Account xxx-xxxx7874 January 2009 - June 20091
Date2 2/24/2009 2/24/2009
Description 1435 Wire
Payor3 KRKB KRKB
Payee3
Debit Other 1,323 LSF 100,000 Total $ 335,068
Credit $ $ -
Grand Total $ 335,768
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, Corp.. 2 - We received bank statements from April 2008 - June 2009 for this account. I did not note any relevant transactions in March - June of 2009. 3 - In certain instances, transactions may have the Payor or Payee as a person or an entity other than Liberty State Financial Holdings, Corp. or KRKB. I understand that KRKB performed these transactions with third parties for the benefit of Liberty State Financial Holdings, Corp..
2 of 2
Exhibit 4.0 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. Sovereign Bank Summary March 2009 - February 2010
Month 2009 March April May June July August September October November December Total $ 2010 January February
Debit -
Credit 35,000 44,000 43,000 31,100 18,000 18,700 189,800
$ Total $
$ $ $
61,000 20,000 81,000 270,800
Grand Total $
1 of 1
Exhibit 4.1 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Sovereign Bank Account xxxxxx6250 March 2009 - December 20091
Date2 April 4/13/2009 4/23/2009
Description WIRE WIRE
Payor LSF LSF
Payee KRKB $ KRKB Total $
Debit $ $
Credit 15,000 20,000 35,000
May 5/1/2009 5/7/2009 5/22/2009
WIRE WIRE WIRE
LSF LSF LSF
KRKB $ KRKB KRKB Total $
5,000 15,000 24,000 44,000
July 7/1/2009 7/31/2009
Wire Wire
LSF LSF
KRKB $ KRKB Total $
$ $
18,000 25,000 43,000
October 10/9/2009 10/9/2009 10/9/2009 10/9/2009 10/22/2009 10/23/2009
Deposit Deposit Deposit Deposit Wire Wire
LSF LSF LSF LSF LSF LSF
KRKB KRKB KRKB KRKB KRKB $ KRKB Total $
$ $
4,000 4,100 4,000 4,000 12,000 3,000 31,100
1 of 2
Exhibit 4.1 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Sovereign Bank Account xxxxxx6250 March 2009 - December 20091
Date2 November 11/20/2009
Description Wire
Payor LSF
Payee KRKB $ Total $
Debit $ $
Credit 18,000 18,000
December 12/18/2009
Wire
LSF
KRKB $ Total $ Grand Total $
$ $
18,700 18,700
$ 189,800
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, Corp.. 2 - We received bank statements from March 2009 - February 2010 for this account. I did not note any relevant transactions in March, June, August or September of 2009.
2 of 2
Exhibit 4.2 Kwasnik, Rodio, Kanowitz & Buckley, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. For Sovereign Bank Account xxxxxx62501 January 2010 - February 20101
Date January 1/5/2010 1/12/2010 1/28/2010 February 2/17/2010
Description WIRE WIRE Wire
Payor LSF LSF LSF
Payee KRKB KRKB KRKB $
Debit $
Credit 21,000 20,000 20,000 61,000 20,000 20,000 81,000
Total $ Wire KRKB LSF $ Total $
$ $ $ $
Grand Total $
Notes: 1 - The bank statements I reviewed disclosed "return items" that could not be paid due to insufficient funds. This schedule does not include these transactions as they do not constitute advances to or reimbursements from Liberty State Financial Holdings, Corp..
1 of 1
Exhibit 5.0
Kwasnik, Rodio, Kanowitz & Buckley, P.C. Kwasnik, Kanowitz & Associates, P.C. Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp. Other Transactions 1 January 2008 - June 2011
Date2 2008 1/1/2008 2/1/2008 3/1/2008 4/1/2008 5/1/2008 5/6/2008 6/1/2008 7/1/2008 8/1/2008 9/1/2008 10/1/2008 11/1/2008 11/6/2008 11/6/2008 11/6/2008 11/13/2008 11/13/2008 12/1/2008 12/4/2008 2009 1/1/2009 2/1/2009 2/16/2009 3/1/2009 4/1/2009 5/1/2009 6/1/2009 7/1/2009 8/1/2009 9/1/2009 10/1/2009 11/1/2009 12/1/2009 12/31/2009
Description Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Invoices Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Invoices Invoices Invoices Invoices Invoices Corporate Counsel Fee Invoices
Payor3 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Payee3 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Total N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Total $
Debit 5,000 5,000 5,000 5,000 5,000 1 5,000 5,000 5,000 5,000 5,000 5,000 128 377 5,627 301 61,786 5,000 878 129,098 5,000 5,000 200,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 6,781 266,781 $
Credit -
$ $
$ $
Corporate Counsel Fee Corporate Counsel Fee Purchase Agreement Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Invoices
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
1 of 4
Exhibit 5.0
Date2 2010 1/1/2010 2/1/2010 3/1/2010 4/1/2010 4/28/2010 5/1/2010 6/1/2010 7/1/2010 7/8/2010 7/8/2010 7/9/2010 8/1/2010 8/16/2010 8/16/2010 9/1/2010 10/1/2010 10/20/2010 10/20/2010 10/20/2010 11/1/2010 11/8/2010 11/9/2010 11/12/2010 11/15/2010 11/15/2010 11/15/2010 11/16/2010 11/22/2010 12/1/2010 12/7/2010 12/20/2010 12/20/2010
Description Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Advance Corporate Counsel Fee Corporate Counsel Fee Corporate Counsel Fee Invoices Invoices Corporate Counsel Fee Credit Card Credit Card Corporate Counsel Fee Corporate Counsel Fee Credit Card Credit Card Credit Card Corporate Counsel Fee Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Corporate Counsel Fee Credit Card Credit Card Credit Card
Payor3 N/A N/A N/A N/A KRKB N/A N/A N/A N/A N/A KRKB/MWK N/A KRKB/MWK KRKB/MWK N/A N/A KRKB/MWK KRKB/MWK KRKB/MWK N/A KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK N/A KRKB/MWK KRKB/MWK KRKB/MWK
Payee3 N/A N/A N/A N/A Other N/A N/A N/A N/A N/A Other N/A Other Other N/A N/A Other Other Other N/A Other Other Other Other Other Other Other Other N/A Other Other Other Total $
Debit 5,000 5,000 5,000 5,000 1,244 5,000 5,000 5,000 301 1,300 2,900,000 5,000 629 359 5,000 5,000 352 25 10 5,000 50 38 19 765 93 50 150 513 5,000 113 57 1,013 $ 2,967,081 $
Credit -
2011 1/1/2011
Corporate Counsel Fee
N/A Privileged & Confidential Attorney Work Product
N/A
5,000
2 of 4
Exhibit 5.0
Date2 1/6/2011 1/6/2011 1/10/2011 1/10/2011 1/11/2011 1/11/2011 4 1/13/2011 1/17/2011 1/18/2011 1/18/2011 1/19/2011 1/19/2011 1/19/2011 1/20/2011 1/20/2011 2/1/2011 2/22/2011 2/25/2011 2/28/2011 2/28/2011 2/28/2011 2/28/2011 3/1/2011 3/1/2011 3/1/2011 3/1/2011 3/1/2011 3/1/2011 3/28/2011 3/29/2011 3/29/2011 3/29/2011 3/30/2011 3/30/2011 4/15/2011 4/15/2011 4/15/2011
Description Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Guarantee Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Corporate Counsel Fee Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card Guarantee Guarantee Guarantee
Payor3 KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK N/A KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK KRKB/MWK Other Other
Payee3 Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other N/A Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other KRKB/MWK KRKB/MWK
Debit 525 146 455 405 1,624 488 29 35 2 104 33 597 179 50 5,000 335 922 1,382 361 238 39 694 156 150 118 60 25 378 34 20 17 450 398 3,058,000 -
Credit 100,000 2,900,000 250,000
3 of 4
Exhibit 5.0
Date2 4/25/2011 4/25/2011 5/11/2011 5/15/20115
Description Guarantee Guarantee Advance Credit
Payor3 KRKB/MWK Other KKA KRKB
Payee3 Other KRKB/MWK Other LSF Total Grand Total
Debit 400,000 10,000 $ 3,488,450 $ 6,851,409
Credit 400,000 298,067 $ 3,948,067 $ 3,948,067
Notes: 1 - This schedule includes transactions that were not found in the activity and related support for KRKB/KKA's Commerce/TD, Cornerstone or Sovereign Bank accounts that were in scope for this analysis. 2 - I did not note any relevant transactions in June 2011. 3 -In certain instances, transactions may have the Payor or Payee as a person or an entity other than Liberty State Financial Holdings, Corp. or KRKB. I understand that KRKB performed these transactions with third parties for the benefit of Liberty State Financial Holdings, Corp.. 4 - I understand that Michael Kwasnik personally guaranteed a transaction on behalf of Liberty State Financial Holdings, Corp. I further understand that in a letter dated January 13, 2011, Michael Kwasnik learned that he was released from this obligation because as of June 22, 2009, Liberty State Financial Holdings, Corp. had fulfilled their debt obligation to Financial Pacific Leasing, LLC. 5 - I understand that there was a Beneficial Bank Loan of which LSFs responsibility was 1/6. I further understand that throughout the years of payments, LSF has over paid. The purpose of this transaction is to credit Liberty State Financial Holdings, Corp. for its overpayments.
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Article 3 - Michael Kwasnik

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Article 3 - Michael Kwasnik

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FORENSIC, LITIGATION & VALUATION SERVICES

Expert Report By Paul Pocalyko, CPA/CFF, CFE, MBA September 9, 2011

BASIS FOR ANALYSIS

The advances and reimbursements include legal fees.

DOCUMENTS REVIEWED AND ANALYZED

Paul Pocalyko September 9, 2011

PAUL W. POCALYKO, CPA

Paul W. Pocalyko, CPA

Court of Common Pleas Bucks County

Paul W. Pocalyko, CPA

United States District Court

For the District of New Jersey

Sandra King Wilson, et al. v. County of Gloucester, et al.

Beale Street Development Corporation v. Performa Entertainment Real Estate, Inc.

Beale Street Development Corporation v. Performa Entertainment Real Estate, Inc.

IMS Health Incorporated v. Medco Health Solutions, Inc.

Metavante Corporation v. Emigrant Savings Bank

Paul W. Pocalyko, CPA

Privileged & Confidential Attorney Work Product

Debit 227,766 287,697 470,979 1,221,542 2,207,983 $

Credit 1,118,581 1,494,188 835,100 3,447,869

4,200 335,768 339,968

189,800 81,000 270,800

Other Transactions 2008 2009 2010 2011

129,098 266,781 2,967,081 3,488,450 6,851,409 9,399,360

3,948,067 3,948,067 7,716,679 1 of 1

Privileged & Confidential Attorney Work Product

16,000 38,000 71,360 46,500 29,000 13,820 11,500 13,400

54,100 24,500 88,800 209,000 241,000 338,188 216,500 122,500 1 of 3

Privileged & Confidential Attorney Work Product

Debit 35,150 2,880 9,372 714 287,697

Credit 99,100 52,500 16,000 32,000 1,494,188

Privileged & Confidential Attorney Work Product

Month March April May June Total $ Grant Total $

Debit 127,890 258,677 59,195 331,854 1,221,542 2,207,983

Privileged & Confidential Attorney Work Product

Privileged and Confidential Attorney Work Product

Total $ April 4/2/2008 4/8/2008

Liberty State Benefits LSF

Privileged and Confidential Attorney Work Product

Date2 4/9/2008 4/11/2008 4/28/2008 4/29/2008

Description Deposit Deposit 8616 Deposit

Payor3 LSF LSF KRKB LSF

Payee3 KRKB KRKB Other KRKB Total $

Debit 1,000 1,000

Credit 18,500 20,000 3,000 $ 51,500

August 8/26/2008 8/29/2008

Total $ Privileged and Confidential Attorney Work Product

6,000 1,600 17,000 24,600

30,000 10,000 20,000 4,000 55,000 1,300 6,000 126,300 3 of 6

100 10,000 40,000 20,000 20,000 40,000 30,000 15,000 4 of 6

Privileged and Confidential Attorney Work Product

Payee3 KRKB Total $

Credit 15,000 $ 190,100

12,500 12,500 12,500 12,500 50,000

40,000 40,000 10,000 60,000 4,212 13,183 13,080 8,000 188,474

Wire Wire Wire Wire Wire Wire Wire 9135

KRKB LSF LSF LSF LSF KRKB KRKB KRKB

LSF KRKB KRKB KRKB KRKB LSF LSF Other

1,000 15,000 10,000 350

61,786 48,401 5,396 37,323 5 of 6

Privileged and Confidential Attorney Work Product

Payee3 KRKB Total $ Grand Total $