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 Liberty’s 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. Background

II. Basis for Analysis

III. Analysis

IV. Conclusion

Exhibits

CONFIDENTIAL Page 2

______________________________________________________________________________________ Kwasnik, Rodio, Kanowitz & Buckley, P.C. and Kwasnik, Kanowitz & Associates, P.C.

I. BACKGROUND

A. 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

Liberty’s 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

Master’s Degree in Business Administration with a concentration in Corporate Finance. I

am a Partner with ParenteBeard LLC’s Forensic, Litigation & Valuation Services

department. Attached, as Exhibit A, is my current curriculum vitae and information

concerning my testimony history and publications.

CONFIDENTIAL Page 3


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. ANALYSIS

A. OVERVIEW

The primary objective of my engagement was to ascertain the validity of advances KKA

made on behalf of Liberty and Liberty’s 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

1 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.

CONFIDENTIAL Page 4


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 Advances Reimbursements 2008 $ 361,064 $ 1,168,524 2009 890,245 1,683,988 2010 3,438,060 916,100 2011 4,709,992

3,948,067 $ 9,399,361 $ 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 KRKB’s Commerce/TD Bank account ’8559 and KKA’s 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.

2 The advances and reimbursements include legal fees.

CONFIDENTIAL Page 5


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 KKA’s 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 Page 6


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. CONCLUSION

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.

CONFIDENTIAL Page 7


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, [email protected] 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 (CONT’D): “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 Jurisdiction Type Matter

2011 Court of Common Pleas Trial Charles W. Bushar and Lauretta V. Bushar, husband and wife, Montgomery County d/b/a Swedesford Commons, L.P., f/k/a Continental Business Center, L.P. v. Pepper Hamilton, LLP and Robert Weinberg, Esquire 2010 Court of Common Pleas Mediation Pennridge School District v. Ernest Bock & Sons, Inc., Eastern Bucks County Electric Corporation of New Jersey t/a Ostro, Inc., Guy M. Cooper, Inc., and JBM Mechanical, Inc. f/k/a JBM Plumbing, Inc. 2010 Commonwealth of Massachusetts Trial Consolidated SWINC Estate v. Lloyds Underwriters, et al. Superior Court Department 2010 United States District Court Deposition HCP Laguna Creek CA, LP, HCP Dartmouth MA, LP, HCP Towson Eastern District of Virginia MD, LP, HCP Caramillo CA, LP, and HRA Management Corporation, Alexandria Division and HCP, Inc. v. Sunrise Senior Living Management, Inc. 2010 American Arbitration Association Arbitration Lauren Engineers & Constructors, Inc. v. Bosque Power Dallas, Texas Company, LLC 2010 Commonwealth of Massachusetts Deposition Consolidated SWINC Estate v. Lloyds Underwriters, et al. Superior Court Department 2009 United States District Court Trial National Jockey Club v. Floyd “Chip” Ganassi and Chip Ganassi Northern District of Illinois Group, L.L.C. Eastern Division 2009 Circuit Court of the Tenth Judicial Circuit Trial Paul and Desiree O’Neill v. Jack L. Hamilton (individually), Jack L. In and For Polk County, Florida Hamilton Construction, Inc.; and Jack L. Hamilton Construction of Central Florida, Inc. 2009 Circuit Court of the Tenth Judicial Circuit Deposition Paul and Desiree O’Neill v. Jack L. Hamilton (individually), Jack L. In and For Polk County, Florida Hamilton Construction, Inc.; and Jack L. Hamilton Construction of Central Florida, Inc.


2009 Private Arbitration, Pittsburgh, PA Arbitration The Pittsburgh Presbyterian Foundation v. JCS Management, LLC and Aggregate Partners, L.P. 2009 United States District Court Mediation Lexington Insurance Company v. County of Gloucester, et al. and For the District of New Jersey Sandra King Wilson, et al. v. County of Gloucester, et al. 2009 United States District Court Trial Metavante Corporation v. Emigrant Savings Bank Eastern District of Wisconsin 2009 In the Chancery Court of Shelby Deposition Beale Street Development Corporation v. Performa Entertainment County, Tennessee Real Estate, Inc. For the Thirtieth Judicial District at Memphis 2009 United States District Court Deposition National Jockey Club v. Floyd “Chip” Ganassi and Chip Ganassi Northern District of Illinois Group, L.L.C. Eastern Division 2008 In the Chancery Court of Shelby Testimony Beale Street Development Corporation v. Performa Entertainment County, Tennessee Real Estate, Inc. For the Thirtieth Judicial District at Memphis 2008 American Arbitration Association Arbitration IMS Health Incorporated v. Medco Health Solutions, Inc. Philadelphia, PA 2008 United States District Court Deposition Metavante Corporation v. Emigrant Savings Bank Eastern District of Wisconsin 2008 United States District Court Deposition Mack Trucks, Inc. v. RDK Truck Sales and Service, Inc. and Eastern District of Pennsylvania RDK Municipal Truck Center, Inc. 2008 United States District Court Deposition The Dolan Group, VI v. Fresenius USA Manufacturing, Inc. District of New Jersey


2008 American Arbitration Association Arbitration Metropolitan Regional Counsel of Carpenters v. EDIS Company Philadelphia, PA Inc., et al. 2007 U.S. Bankruptcy Court Deposition Jillian’s Entertainment Holdings, et al. v. Sureshot Redemption Western District of Kentucky (Louisville) 2007 American Arbitration Association Testimony Temple University Health System, Inc. and Hunting Fox TCI III, L.P. Philadelphia, PA

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

http://www.kkalaw.com/

http://www.topix.com/

http://www.bbb.org/

http://www.jerseybusinessleaders.com/Liverty-State-Financial.html

Exhibit 1.0

Privileged & ConfidentialAttorney Work Product 1 of 1

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 Debit CreditCommerce/TD Bank

2008 227,766$ 1,118,581$ 2009 287,697 1,494,188 2010 470,979 835,100 2011 1,221,542 -

Total 2,207,983$ 3,447,869$

Cornerstone Bank2008 4,200$ 49,942$ 2009 335,768 -

Total 339,968$ 49,942$

Sovereign Bank2009 -$ 189,800$ 2010 - 81,000

Total -$ 270,800$

Other Transactions2008 129,098$ -$ 2009 266,781 - 2010 2,967,081 - 2011 3,488,450 3,948,067

6,851,409$ 3,948,067$

Grand Total 9,399,360$ 7,716,679$

Exhibit 2.0



Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp.

Commerce/TD Bank SummaryJanuary 2008 - June 2011

Month Debit Credit2008

January 6,300$ 152,250$ February 40,980 132,800 March 6,200 87,250 April 1,000 51,500 May - - June 500 - July - - August 12,000 27,000 September 24,600 126,300 October 59,836 190,100 November 50,000 188,474 December 26,350 162,907

Total 227,766$ 1,118,581$

2009January 16,000$ 54,100$ February 38,000 24,500 March 71,360 88,800 April 46,500 209,000 May 29,000 241,000 June 13,820 338,188 July 11,500 216,500 August 13,400 122,500

Exhibit 2.0





Month Debit CreditSeptember 35,150 99,100 October 2,880 52,500 November 9,372 16,000 December 714 32,000

Total 287,697$ 1,494,188$

2010January 18,445$ 162,000$ February 40,005 89,400 March 8,225 78,700 April 16,241 85,500 May 20,853 149,000 June 7,000 31,000 July 3,500 87,000 August 2,000 69,000 September 33,037 52,000 October 121,325 31,500 November 44,000 - December 156,347 -

Total 470,979$ 835,100$

2011January 319,619$ -$ February 124,307 -

Exhibit 2.0





Month Debit CreditMarch 127,890 - April 258,677 - May 59,195 - June 331,854 -

Total 1,221,542$ -$

Grant Total 2,207,983$ 3,447,869$

Exhibit 2.1

Privileged and ConfidentialAttorney Work Product 1 of 6

Kwasnik, Rodio, Kanowitz & Buckley, P.C.Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp.

For Commerce/TD Bank Account xxxxxx8559January 2008 - December 20081

Date2 Description Payor3 Payee3 Debit CreditJanuary

1/2/2008 8231 KRKB LSF 1,500$ -$ 1/3/2008 Deposit KRKB KRKB - 2,000 1/4/2008 Deposit KRKB KRKB - 3,000 1/4/2008 Deposit KRKB KRKB - 8,500 1/4/2008 Deposit LSF KRKB - 83,500 1/10/2008 8305 KRKB LSF 2,500 - 1/14/2008 Deposit LSF KRKB - 4,250 1/17/2008 8352 KRKB LSF 1,000 - 1/23/2008 Deposit LSF KRKB - 13,000 1/23/2008 Deposit LSF KRKB - 31,000 1/28/2008 8331 KRKB LSF 1,300 - 1/31/2008 Deposit KRKB KRKB - 7,000

Total 6,300$ 152,250$ February

2/4/2008 Deposit KRKB KRKB -$ 7,500$ 2/4/2008 Deposit LSF KRKB - 2,000 2/6/2008 Deposit LSF KRKB - 1,800 2/8/2008 8391 KRKB LSF 2,100 - 2/11/2008 Deposit LSF KRKB - 2,500 2/12/2008 Deposit LSF KRKB - 4,000 2/20/2008 Deposit LSF KRKB - 32,000 2/22/2008 Deposit LSF KRKB - 12,000 2/25/2008 8443 KRKB LSF 1,094 - 2/25/2008 8447 KRKB LSF 2,100 - 2/25/2008 8495 KRKB LSF 6,325 - 2/25/2008 8446 KRKB LSF 1,313 -

Exhibit 2.1




Date2 Description Payor3 Payee3 Debit Credit2/25/2008 8449 KRKB LSF 1,801 - 2/25/2008 8450 KRKB LSF 1,385 - 2/25/2008 8451 KRKB LSF 1,330 - 2/25/2008 8452 KRKB LSF 4,665 - 2/25/2008 8496 KRKB LSF 3,000 - 2/25/2008 8448 KRKB LSF 1,867 - 2/26/2008 Deposit LSF KRKB - 1,000 2/29/2008 Deposit LSF KRKB - 70,000

2/26/20084 8490 KRKB Other 14,000 - Total 40,980$ 132,800$

March3/3/2008 8500 KRKB LSF 6,200$ -$ 3/7/2008 Deposit LSF KRKB - 20,000 3/14/2008 Deposit LSF KRKB - 9,000 3/18/2008 Deposit LSF Other - 750 3/18/2008 Deposit LSF KRKB - 11,000 3/21/2008 Deposit LSF KRKB - 10,000 3/24/2008 Deposit LSF Cash - 5,000 3/24/2008 Deposit LSF KRKB - 8,000 3/26/2008 Deposit LSF KRKB - 12,500 3/28/2008 Deposit LSF Cash - 11,000

Total 6,200$ 87,250$

April4/2/2008 Deposit Liberty State Benefits KRKB -$ 500$ 4/8/2008 Deposit LSF KRKB - 9,500

Exhibit 2.1




Date2 Description Payor3 Payee3 Debit Credit4/9/2008 Deposit LSF KRKB - 18,500 4/11/2008 Deposit LSF KRKB - 20,000 4/28/2008 8616 KRKB Other 1,000 - 4/29/2008 Deposit LSF KRKB - 3,000

Total 1,000$ 51,500$

June6/18/2008 8636 KRKB Other 500$ -$

Total 500$ -$

August8/26/2008 Withdrawal KRKB LSF 12,000$ -$ 8/29/2008 Wire LSF KRKB - 27,000

Total 12,000$ 27,000$

September9/3/2008 Wire LSF KRKB -$ 30,000$ 9/5/2008 Wire LSF KRKB - 10,000 9/16/2008 Wire LSF KRKB - 20,000 9/18/2008 8783 KRKB Other 6,000 - 9/19/2008 Wire LSF KRKB - 4,000 9/22/2008 Wire LSF KRKB - 55,000 9/24/2008 8802 KRKB Other 1,600 - 9/24/2008 8800 KRKB LSF 17,000 - 9/26/2008 Wire LSF KRKB - 1,300 9/30/2008 Wire LSF KRKB - 6,000

Total 24,600$ 126,300$

Exhibit 2.1




Date2 Description Payor3 Payee3 Debit Credit

October10/1/2008 8811 KRKB Other 5,000$ -$ 10/1/2008 Wire LSF KRKB - 100 10/3/2008 Wire LSF KRKB - 10,000 10/10/2008 Wire LSF KRKB - 40,000 10/15/2008 Wire LSF KRKB - 20,000 10/16/2008 8886 KRKB Other 210 - 10/16/2008 8891 KRKB Other 350 - 10/17/2008 8892 KRKB Other 6,000 - 10/17/2008 8893 KRKB Other 6,800 - 10/20/2008 8863 KRKB LSF 1,313 - 10/20/2008 8864 KRKB LSF 796 - 10/20/2008 8865 KRKB LSF 1,801 - 10/20/2008 8866 KRKB LSF 1,385 - 10/20/2008 8867 KRKB LSF 1,108 - 10/20/2008 8868 KRKB LSF 1,056 - 10/20/2008 8869 KRKB LSF 4,665 - 10/20/2008 8871 KRKB LSF 1,400 - 10/20/2008 8872 KRKB LSF 2,952 - 10/20/2008 Wire LSF KRKB - 20,000 10/21/2008 8931 KRKB LSF 17,000 - 10/21/2008 Wire LSF KRKB - 40,000 10/22/2008 8932 KRKB Other 6,000 - 10/24/2008 Wire LSF KRKB - 30,000 10/24/2008 Wire LSF KRKB - 15,000 10/27/2008 8952 KRKB Other 2,000 -

Exhibit 2.1




Date2 Description Payor3 Payee3 Debit Credit10/29/2008 Wire LSF KRKB - 15,000

Total 59,836$ 190,100$

November11/4/2008 8982 KRKB Other 12,500$ -$ 11/3/2008 Wire LSF KRKB - 40,000 11/6/2008 Wire LSF KRKB - 40,000 11/10/2008 8980 KRKB Other 12,500 - 11/10/2008 8979 KRKB Other 12,500 - 11/10/2008 8981 KRKB Other 12,500 - 11/10/2008 Wire LSF KRKB - 10,000 11/10/2008 Wire LSF KRKB - 60,000 11/13/2008 Wire LSF KRKB - 4,212 11/13/2008 Wire LSF KRKB - 13,183 11/18/2008 Wire LSF KRKB - 13,080 11/19/2008 Wire LSF KRKB - 8,000

Total 50,000$ 188,474$

December12/1/2008 Wire KRKB LSF 1,000$ -$ 12/1/2008 Wire LSF KRKB - 61,786 12/1/2008 Wire LSF KRKB - 48,401 12/1/2008 Wire LSF KRKB - 5,396 12/3/2008 Wire LSF KRKB - 37,323 12/11/2008 Wire KRKB LSF 15,000 - 12/12/2008 Wire KRKB LSF 10,000 - 12/17/2008 9135 KRKB Other 350 -

Exhibit 2.1




Date2 Description Payor3 Payee3 Debit Credit12/18/2008 Wire LSF KRKB - 10,000

Total 26,350$ 162,907$

Grand Total 227,766$ 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..

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..

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.

Exhibit 2.2




Date Description Payor2 Payee2 Debit CreditJanuary

1/5/2009 Wire LSF KRKB -$ 1,000$ 1/5/2009 Wire LSF KRKB - 6,000 1/5/2009 Wire LSF KRKB - 7,500 1/12/2009 Wire LSF KRKB - 20,000 1/12/2009 Deposit LSF KRKB - 11,600 1/14/2009 Wire KRKB LSF 8,000 - 1/14/2009 Wire KRKB LSF 5,000 - 1/22/2009 Wire LSF KRKB - 8,000 1/27/2009 Wire KRKB LSF 3,000 -


2/4/2009 Wire LSF KRKB -$ 1,000$ 2/5/2009 Wire LSF KRKB - 5,000 2/9/2009 Wire KRKB LSF 28,000 - 2/11/2009 Wire LSF KRKB - 2,000 2/24/2009 Wire KRKB LSF 10,000 - 2/26/2009 Wire LSF KRKB - 16,500

Total 38,000$ 24,500$ March

3/6/2009 9366 KRKB Other 860$ -$ 3/9/2009 Wire KRKB LSF 35,000 - 3/16/2009 Wire LSF KRKB - 3,800 3/17/2009 Wire LSF KRKB - 5,000 3/23/2009 Wire LSF KRKB - 25,000 3/23/2009 Wire KRKB LSF 28,000 - 3/23/2009 Wire LSF KRKB - 15,000 3/25/2009 Wire KRKB LSF 2,500 - 3/26/2009 Wire KRKB Other 5,000 - 3/27/2009 Wire LSF KRKB - 20,000 3/31/2009 Wire LSF KRKB - 20,000

Total 71,360$ 88,800$

April4/2/2009 Wire LSF KRKB -$ 10,000$ 4/3/2009 Wire LSF KRKB - 10,000

Exhibit 2.2




Date Description Payor2 Payee2 Debit Credit4/6/2009 Wire LSF KRKB - 30,000 4/8/2009 9553 KRKB Other 2,000 - 4/14/2009 Wire LSF KRKB - 15,000 4/15/2009 Wire LSF KRKB - 10,000 4/15/2009 9572 KRKB Other 3,000 - 4/15/2009 9571 KRKB Other 1,500 - 4/16/2009 Wire LSF KRKB - 70,000 4/17/2009 Wire KRKB LSF 40,000 - 4/20/2009 Wire LSF KRKB - 12,000 4/20/2009 Wire LSF KRKB - 30,000 4/22/2009 Wire LSF KRKB - 20,000 4/29/2009 Wire LSF KRKB - 2,000

Total 46,500$ 209,000$

May5/1/2009 Wire LSF KRKB -$ 50,000$ 5/4/2009 9674 KRKB Other 1,000 - 5/7/2009 Wire KRKB Other 3,000 - 5/8/2009 Wire LSF KRKB - 80,000 5/11/2009 9729 KRKB LSF 8,000 - 5/12/2009 Wire KRKB LSF 17,000 - 5/15/2009 Wire LSF KRKB - 8,000 5/19/2009 Wire LSF KRKB - 20,000 5/21/2009 Wire LSF KRKB - 9,000 5/22/2009 Wire LSF KRKB - 40,000 5/27/2009 Wire LSF KRKB - 10,000 5/28/2009 Wire LSF KRKB - 4,000 5/29/2009 Wire LSF KRKB - 20,000

Total 29,000$ 241,000$

June6/1/2009 Wire LSF KRKB -$ 5,000$ 6/1/2009 Deposit LSF KRKB - 8,000 6/3/2009 Wire LSF KRKB - 1,500 6/4/2009 Wire LSF KRKB - 20,000 6/5/2009 Wire LSF KRKB - 3,000

Exhibit 2.2




Date Description Payor2 Payee2 Debit Credit6/5/2009 Wire LSF KRKB - 2,000 6/12/2009 Wire LSF KRKB - 12,000 6/15/2009 9906 KRKB Other 1,172 - 6/15/2009 9908 KRKB Other 958 - 6/15/2009 9909 KRKB Other 1,283 - 6/15/2009 Deposit LSF KRKB - 35,000 6/16/2009 9904 KRKB Other 1,284 - 6/17/2009 Deposit LSF KRKB - 500 6/17/2009 Deposit LSF KRKB - 4,800 6/18/2009 9905 KRKB Other 103 - 6/18/2009 9907 KRKB Other 1,587 - 6/18/2009 Deposit LSF KRKB - 20,000 6/18/2009 Deposit LSF KRKB - 5,000 6/18/2009 9916 KRKB Other 2,000 - 6/19/2009 Deposit LSF KRKB - 40,000 6/22/2009 Wire LSF KRKB - 40,000 6/24/2009 Wire LSF KRKB - 60,000 6/24/2009 Deposit Other KRKB - 1,172 6/24/2009 Deposit Other KRKB - 103 6/24/2009 Deposit Other KRKB - 1,284 6/24/2009 Deposit Other KRKB - 1,283 6/24/2009 Deposit Other KRKB - 958 6/24/2009 Deposit Other KRKB - 1,587 6/24/2009 Wire KRKB LSF 500 - 6/24/2009 Wire KRKB Other 1,000 - 6/24/2009 Wire KRKB LSF 3,932 - 6/25/2009 Wire LSF KRKB - 40,000 6/26/2009 Wire LSF KRKB - 10,000 6/30/2009 Wire LSF KRKB - 25,000

Total 13,820$ 338,188$

July7/2/2009 Wire LSF KRKB -$ 10,000$ 7/6/2009 Wire LSF KRKB - 4,000 7/7/2009 Wire LSF KRKB - 10,000 7/8/2009 Wire LSF KRKB - 5,000

Exhibit 2.2




Date Description Payor2 Payee2 Debit Credit7/9/2009 Wire KRKB LSF 1,500 - 7/13/2009 Wire KRKB Other 10,000 - 7/13/2009 Wire LSF KRKB - 50,000 7/14/2009 Deposit LSF KRKB - 22,000 7/16/2009 Deposit LSF KRKB - 20,000 7/23/2009 Deposit LSF KRKB - 21,500 7/24/2009 Deposit LSF KRKB - 12,500 7/24/2009 Deposit LSF KRKB - 10,000 7/27/2009 Deposit LSF KRKB - 1,500 7/31/2009 Wire LSF KRKB - 50,000

Total 11,500$ 216,500$

August8/5/2009 Wire LSF KRKB -$ 20,000$ 8/6/2009 Deposit LSF KRKB - 18,000 8/6/2009 Deposit LSF KRKB - 1,000 8/10/2009 Wire KRKB LSF 1,100 - 8/13/2009 Deposit LSF KRKB - 15,000 8/14/2009 Deposit LSF KRKB - 15,000 8/19/2009 Deposit LSF KRKB - 13,500 8/21/2009 Deposit LSF KRKB - 5,000 8/26/2009 Deposit LSF KRKB - 10,000 8/27/2009 Deposit LSF KRKB - 15,000 8/28/2009 Wire KRKB LSF 12,300 - 8/31/2009 Deposit LSF KRKB - 10,000

Total 13,400$ 122,500$

September9/2/2009 10247 KRKB LSF 4,000$ -$ 9/3/2009 Deposit LSF KRKB - 1,000 9/4/2009 Deposit LSF KRKB - 4,000 9/4/2009 Deposit LSF KRKB - 8,500 9/9/2009 Wire KRKB LSF 17,000 - 9/10/2009 10279 KRKB LSF 3,500 - 9/10/2009 10280 KRKB LSF 1,850 - 9/10/2009 10285 KRKB Other 3,000 -

Exhibit 2.2




Date Description Payor2 Payee2 Debit Credit9/10/2009 10286 KRKB Other 2,000 - 9/10/2009 10288 KRKB Other 3,000 - 9/10/2009 10276 KRKB Other 800 - 9/10/2009 Deposit LSF KRKB - 4,000 9/10/2009 Deposit LSF KRKB - 1,000 9/14/2009 Deposit LSF KRKB - 15,000 9/14/2009 Deposit LSF KRKB - 5,000 9/16/2009 Deposit LSF KRKB - 30,000 9/17/2009 Deposit LSF KRKB - 5,600 9/24/2009 Deposit LSF KRKB - 5,000 9/25/2009 Deposit LSF KRKB - 5,000

9/29/20093 Deposit LSF KRKB - 15,000 Total 35,150$ 99,100$

October10/2/2009 Deposit LSF KRKB -$ 5,000$ 10/5/2009 Deposit LSF KRKB - 20,000 10/9/2009 Deposit LSF KRKB - 5,000 10/13/2009 Deposit LSF KRKB - 15,000 10/15/2009 Wire KRKB LSF 350 - 10/15/2009 10454 KRKB Other 1,000 - 10/16/2009 10460 KRKB Other 530 - 10/21/2009 10471 KRKB Other 1,000 - 10/21/2009 Wire LSF KRKB - 6,000 10/23/2009 Wire LSF KRKB - 1,500

Total 2,880$ 52,500$

November11/3/2009 10498 KRKB Other 714$ -$ 11/6/2009 Deposit LSF KRKB - 10,000 11/9/2009 10499 KRKB Other 600 - 11/9/2009 10520 KRKB Other 179 - 11/10/2009 10493 KRKB Other 1,521 - 11/10/2009 10501 KRKB Other 259 - 11/10/2009 10503 KRKB Other 100 - 11/13/2009 Wire KRKB Other 5,000 -

Exhibit 2.2




Date Description Payor2 Payee2 Debit Credit11/23/2009 10568 KRKB Other 1,000 - 11/25/2009 Wire LSF KRKB - 6,000

Total 9,372$ 16,000$

December12/2/2009 Wire LSF KRKB -$ 3,000$ 12/3/2009 10587 KRKB Other 714 - 12/18/2009 Wire LSF KRKB - 29,000

Total 714$ 32,000$

Grand Total 287,697$ 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.

Exhibit 2.3




Date Description Payor2 Payee2 Debit CreditJanuary

1/5/2010 1005 KRKB Other 2,500$ -$ 1/6/2010 Wire LSF KRKB - 80,000 1/11/2010 2036 KRKB Other 714 - 1/11/2010 2082 KRKB Other 714 - 1/11/2010 Wire LSF KRKB - 45,000 1/13/2010 2046 KRKB Other 2,000 - 1/13/2010 Wire LSF KRKB - 11,000 1/20/2010 Wire KRKB LSF 5,000 - 1/20/2010 Wire KRKB Other 1,000 - 1/21/2010 10716 KRKB Other 1,813 - 1/22/2010 Deposit LSF KRKB - 10,000 1/25/2010 10721 KRKB Other 4,704 - 1/28/2010 Wire LSF KRKB - 16,000


2/5/2010 Wire KRKB LSF 1,500$ -$ 2/5/2010 10727 KRKB LSF 18,000 - 2/5/2010 10728 KRKB LSF 16,000 - 2/5/2010 10732 KRKB Other 1,000 - 2/5/2010 2121 KRKB Other 1,500 - 2/8/2010 Wire LSF KRKB - 1,000 2/17/2010 Wire LSF KRKB - 6,000 2/17/2010 Wire LSF KRKB - 2,400 2/19/2010 Wire LSF KRKB - 30,000 2/19/2010 2150 KRKB Other 780 - 2/19/2010 2153 KRKB Other 1,225 - 2/23/2010 Wire LSF KRKB - 50,000

Total 40,005$ 89,400$ March

3/1/2010 10761 KRKB Other 1,200$ -$

Exhibit 2.3




Date Description Payor2 Payee2 Debit Credit3/8/2010 Wire LSF KRKB - 10,000 3/12/2010 Deposit LSF KRKB - 6,000 3/16/2010 Wire LSF KRKB - 8,000 3/19/2010 Deposit LSF KRKB - 5,000 3/22/2010 Deposit LSF KRKB - 13,000 3/25/2010 Deposit LSF KRKB - 26,000 3/29/2010 Deposit LSF KRKB - 10,700 3/29/2010 Wire KRKB Other 2,000 - 3/29/2010 10784 KRKB Other 1,025 - 3/30/2010 Wire KRKB LSF 3,000 - 3/30/2010 10785 KRKB LSF 1,000 -

Total 8,225$ 78,700$

April4/1/2010 10770 KRKB Other 2,000$ -$ 4/5/2010 10771 KRKB LSF 1,500 - 4/5/2010 10801 KRKB Other 1,000 - 4/8/2010 Deposit LSF KRKB - 7,000 4/13/2010 Deposit LSF KRKB - 20,000 4/15/2010 Deposit LSF KRKB - 10,000 4/16/2010 10820 KRKB Other 1,000 - 4/20/2010 Wire KRKB Other 1,500 - 4/21/2010 2270 KRKB Other 1,500 - 4/22/2010 2267 KRKB Other 259 - 4/22/2010 2268 KRKB Other 1,415 - 4/22/2010 Deposit LSF KRKB - 19,000 4/23/2010 2269 KRKB Other 162 - 4/23/2010 2274 KRKB Other 4,180 - 4/23/2010 2275 KRKB Other 70 - 4/26/2010 Deposit LSF KRKB - 10,000

Exhibit 2.3




Date Description Payor2 Payee2 Debit Credit4/27/2010 Wire KRKB Other 1,655 - 4/29/2010 Deposit LSF KRKB - 6,500 4/30/2010 Deposit LSF KRKB - 13,000

Total 16,241$ 85,500$

May5/4/2010 Wire KRKB Other 5,000$ -$ 5/5/2010 2279 KRKB Other 1,528 - 5/10/2010 Deposit LSF KRKB - 5,000 5/11/2010 Deposit LSF KRKB - 25,000 5/11/2010 Deposit LSF KRKB - 10,000 5/11/2010 Wire KRKB Other 1,000 - 5/14/2010 10852 KRKB Other 2,000 - 5/19/2010 Deposit LSF KRKB - 48,000 5/24/2010 Deposit LSF KRKB - 8,000 5/26/2010 Deposit LSF KRKB - 20,000 5/27/2010 Deposit LSF KRKB - 10,000 5/27/2010 Wire KRKB Other 2,000 - 5/28/2010 2381 KRKB Other 9,325 - 5/28/2010 Deposit LSF KRKB - 10,000 5/28/2010 Deposit LSF KRKB - 13,000

Total 20,853$ 149,000$

June6/3/2010 Deposit LSF KRKB -$ 10,000$ 6/4/2010 Deposit LSF KRKB - 8,000 6/4/2010 Wire KRKB Other 5,000 - 6/7/2010 Deposit LSF KRKB - 10,000 6/15/2010 Deposit LSF KRKB - 3,000 6/18/2010 Wire KRKB Other 1,000 -

Exhibit 2.3




Date Description Payor2 Payee2 Debit Credit6/23/2010 Wire KRKB LSF 1,000 -

Total 7,000$ 31,000$

July7/1/2010 Deposit LSF KRKB -$ 17,000$ 7/7/2010 Wire KRKB Other 1,500 - 7/13/2010 Deposit LSF KRKB - 5,000 7/23/2010 2499 KRKB Other 2,000 - 7/29/2010 Deposit LSF KRKB - 10,000 7/29/2010 Deposit LSF KRKB - 55,000

Total 3,500$ 87,000$

August8/12/2010 Deposit LSF KRKB -$ 50,000$ 8/23/2010 Deposit LSF KRKB - 4,000 8/23/2010 10875 KRKB Other 2,000 - 8/27/2010 Deposit LSF KRKB - 15,000

Total 2,000$ 69,000$

September9/1/2010 Deposit LSF KRKB -$ 5,000$ 9/2/2010 2636 KRKB Other 6,000 - 9/2/2010 2635 KRKB Other 6,000 - 9/7/2010 Deposit LSF KRKB - 27,000 9/9/2010 Deposit LSF KRKB - 20,000 9/14/2010 2673 KRKB Other 100 - 9/14/2010 2674 KRKB Other 50 - 9/14/2010 2676 KRKB Other 50 - 9/15/2010 10892 KRKB Other 1,000 - 9/17/2010 2681 KRKB Other 1,200 - 9/22/2010 2714 KRKB Other 5,000 -

Exhibit 2.3




Date Description Payor2 Payee2 Debit Credit9/23/2010 10885 KRKB Other 1,700 - 9/24/2010 2691 KRKB Other 3,727 - 9/29/2010 2720 KRKB Other 4 - 9/29/2010 2717 KRKB Other 4,264 - 9/29/2010 2718 KRKB Other 4 - 9/29/2010 2723 KRKB Other 3,938 -

Total 33,037$ 52,000$

October10/1/2010 Deposit LSF KRKB -$ 31,500$ 10/15/2010 2790 KRKB Other 6,000 - 10/18/2010 2797 KRKB Other 1,325 - 10/18/2010 2798 KRKB Other 2,000 - 10/25/2010 11136 KRKB LSF 73,000 - 10/29/2010 11178 KRKB LSF 39,000 -

Total 121,325$ 31,500$

November11/3/2010 2828 KRKB LSF 17,000$ -$ 11/8/2010 Wire KRKB LSF 12,000 - 11/9/2010 11207 KRKB LSF 15,000 -

Total 44,000$ -$

December12/28/2010 Wire KRKB Other 6,397$ -$ 12/6/2010 Wire KRKB LSF 20,000 - 12/7/2010 11296 KRKB Other 2,000 - 12/15/2010 2929 KRKB LSF 20,000 - 12/17/2010 Wire KRKB LSF 20,000 - 12/17/2010 2947 KRKF LSF 12,000 -

Exhibit 2.3




Date Description Payor2 Payee2 Debit Credit12/23/2010 2988 KRKB LSF 15,000 - 12/24/2010 Debit KRKB Other 4,000 - 12/28/2010 Wire KRKB LSF 20,000 - 12/28/2010 Wire KRKB LSF 31,000 - 12/28/2010 Wire KRKB Other 1,400 - 12/28/2010 Wire KRKB Other 700 - 12/28/2010 Wire KRKB Other 600 - 12/30/2010 Wire KRKB Other 1,900 - 12/30/2010 Wire KRKB Other 1,350 -

Total 156,347$ -$

Grand Total 470,979$ 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..

Exhibit 2.4



For Commerce/TD Bank Account xxxxxx8559January 2011 - May 20111


1/3/2011 3009 KRKB LSF 30,000$ -$ 1/13/2011 3075 KRKB LSF 70,000 - 1/14/2011 3093 KRKB LSF 28,000 - 1/14/2011 WIRE KRKB Other 2,347 - 1/17/2011 3103 KRKB Other 8 - 1/18/2011 3104 KRKB Other 9,703 - 1/18/2011 3105 KRKB Other 6,561 - 1/21/2011 3131 KRKB LSF 30,000 - 1/25/2011 3158 KRKB LSF 143,000 -

Total 319,619$ -$ February

2/4/2011 WIRE KRKB Other 1,000$ -$ 2/11/2011 3201 KRKB Other 15,000 - 2/14/2011 3226 KRKB Other 1,000 - 2/15/2011 3225 KRKB Other 1,000 - 2/15/2011 3223 KRKB Other 454 - 2/15/2011 3240 KRKB Other 2,000 - 2/17/2011 3273 KRKB LSF 30,000 - 2/17/2011 3278 KRKB Other 2,000 - 2/18/2011 WIRE KRKB Other 2,000 - 2/22/2011 3283 KRKB LSF 14,000 - 2/23/2011 3296 KRKB LSF 42,000 - 2/25/2011 3358 KRKB Other 4,142 - 2/28/2011 3356 KRKB Other 8 -

Exhibit 2.4




Date2 Description Payor3 Payee3 Debit Credit2/28/2011 3357 KRKB Other 9,703 -

Total 124,307$ -$ March

3/4/2011 Wire KRKB Other 2,000$ -$ 3/9/2011 3439 KRKB Other 2,000 - 3/15/2011 3470 KRKB Other 1,000 - 3/15/2011 3469 KRKB Other 1,000 - 3/15/2011 Debit KRKB Other 253 - 3/15/2011 3472 KRKB Other 2,500 - 3/16/2011 Wire KRKB Other 2,000 - 3/16/2011 3477 KRKB Other 1,500 - 3/16/2011 3474 KRKB Other 21,500 - 3/16/2011 Debit KRKB Other 568 - 3/25/2011 3510 KRKB Other 69,677 - 3/25/2011 3509 KRKB Other 212 - 3/25/2011 3504 KRKB Other 16,142 - 3/25/2011 3505 KRKB Other 6,325 - 3/25/2011 3506 KRKB Other 20 - 3/31/2011 324 KRKB Other 1,193 -

Total 127,890$ -$

April4/15/2011 Wire KRKB Other 50,000$ -$ 4/15/2011 Wire KRKB Other 200,000 - 4/15/2011 3548 KRKB Other 1,000 -

Exhibit 2.4




Date2 Description Payor3 Payee3 Debit Credit4/15/2011 3547 KRKB Other 1,000 - 4/21/2011 3566 KRKB Other 2,000 - 4/21/2011 3567 KRKB Other 1,500 -

Total 255,500$ -$

Grand Total 827,316$ -$

Notes:

2 - I received bank statement for January 2008 - May 11, 2011 for this account. I did not note any relevant transactions in May 2011.

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..

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..

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-xxx7653February 2011 - June 20111

Date2 Description Payor3 Payee3 Debit CreditApril

4/29/2011 1293 KRKB Other 1,677$ -$ 4/28/2011 1288 KKA Other 1,500 -

Total 3,177$ -$

May5/4/2011 1302 KKA Other 1,500$ -$ 5/4/2011 1322 KKA Other 6,927 - 5/4/2011 1329 KKA Other 1,500 - 5/4/2011 1327 KKA Other 2,150 - 5/4/2011 1325 KKA Other 1,000 - 5/9/2011 1370 KKA Other 4,964 - 5/9/2011 1369 KKA Other 2,000 - 5/9/2011 1368 KKA Other 3,000 - 5/9/2011 1367 KKA Other 1,761 - 5/9/2011 1366 KKA Other 3,000 - 5/9/2011 1365 KKA Other 2,000 - 5/10/2011 1384 KKA Other 15,932 - 5/10/2011 1376 KKA Other 1,500 - 5/12/2011 1372 KKA Other 5,000 - 5/13/2011 1371 KKA Other 5,000 - 5/13/2011 1364 KKA Other 600 - 5/18/2011 1406 KKA Other 1,361 -

Total 59,195$ -$

June6/16/2011 1449 KKA Other 1,570$ -$ 6/13/2010 1547 KKA Other 1,500 - 6/9/2011 1443 KKA Other 2,000 - 6/10/2011 1467 KKA Other 2,500 - 6/10/2011 Wire KKA Other 250,000 - 6/13/2011 1540 KKA Other 1,000 - 6/13/2011 1548 KKA Other 1,500 - 6/13/2011 1546 KKA Other 5,000 -

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-xxx7653February 2011 - June 20111

Date2 Description Payor3 Payee3 Debit Credit6/13/2011 1539 KKA Other 1,000 - 6/13/2011 1513 KKA Other 3,000 - 6/14/2011 1542 KKA Other 9,605 - 6/14/2011 1468 KKA Other 20,000 - 6/15/2011 1438 KKA Other 30,000 - 6/16/2011 1448 KKA Other 1,570 - 6/16/2011 1507 KKA Other 1,000 - 6/16/2011 1506 KKA Other 103 - 6/17/2011 1510 KKA Other 214 - 6/17/2011 1509 KKA Other 138 - 6/20/2011 1508 KKA Other 154 -

Total 331,854$ -$


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..

Exhibit 3.0


Kwasnik, Rodio, Kanowitz & Buckley, P.C.Analysis of Advances to and Reimbursementsfrom Liberty State Financial Holdings, Corp.

Cornerstone Bank SummaryJanuary 2008 - June 2009


January -$ -$ February - - March - - April 2,200 - May 1,000 - June 1,000 39,500 July - - August - 4,500 September - - October - - November - 5,942 December - -

Total 4,200$ 49,942$

2009January 700$ -$ February 335,068 - March - - April - - May - - June - -

Total 335,768$ -$

Grant Total 339,968$ 49,942$

Exhibit 3.1



For Cornerstone Bank Account xxx-xxxx7874April 2008 - December 20081

Date2 Description Payor3 Payee3 Debit CreditApril

4/21/2008 1053 KRKB Other 2,200$ -$ Total 2,200$ -$

May5/30/2008 1184 KRKB LSF 1,000$ -$

Total 1,000$ -$

June6/2/2008 1180 KRKB LSF 1,000$ -$ 6/5/2008 Deposit LSF KRKB - 5,000 6/19/2008 Deposit LSF KRKB - 34,500

Total 1,000$ 39,500$

August8/13/2008 Deposit LSF Other -$ 4,500$

Total -$ 4,500$

November11/6/2008 Deposit LSF KRKB -$ 5,942$

Total -$ 5,942$

Grand Total 4,200$ 49,942$


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.


Exhibit 3.2



For Cornerstone Bank Account xxx-xxxx7874January 2009 - June 20091


1/9/2009 1383 KRKB LSF 700$ -$ Total 700$ -$

February2/13/2009 1386 KRKB LSF 20,000$ -$ 2/13/2009 1395 KRKB Other 1,500 - 2/13/2009 1396 KRKB LSF 33,000 - 2/17/2009 1401 KRKB Other 500 - 2/17/2009 1393 KRKB Other 1,500 - 2/17/2009 1394 KRKB Other 2,500 - 2/18/2009 1404 KRKB LSF 10,000 - 2/18/2009 1392 KRKB Other 1,500 - 2/19/2009 Wire KRKB LSF 25,000 - 2/20/2009 1407 KRKB LSF 15,000 - 2/23/2009 1436 KRKB Other 562 - 2/23/2009 1437 KRKB Other 2,307 - 2/24/2009 1424 KRKB LSF 105,000 - 2/24/2009 1426 KRKB Other 1,777 - 2/24/2009 1427 KRKB Other 1,369 - 2/24/2009 1428 KRKB Other 1,097 - 2/24/2009 1429 KRKB Other 1,046 - 2/24/2009 1430 KRKB Other 4,586 - 2/24/2009 1431 KRKB Other 1,130 - 2/24/2009 1433 KRKB Other 1,410 - 2/24/2009 1434 KRKB Other 2,962 -

Exhibit 3.2



For Cornerstone Bank Account xxx-xxxx7874January 2009 - June 20091

Date2 Description Payor3 Payee3 Debit Credit2/24/2009 1435 KRKB Other 1,323 - 2/24/2009 Wire KRKB LSF 100,000 -

Total 335,068$ -$


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.


Exhibit 4.0



Sovereign Bank SummaryMarch 2009 - February 2010


March - - April - 35,000 May - 44,000 June - - July - 43,000 August - - September - - October - 31,100 November - 18,000 December - 18,700

Total -$ 189,800$

2010January -$ 61,000$ February - 20,000

Total -$ 81,000$

Grand Total -$ 270,800$

Exhibit 4.1



For Sovereign Bank Account xxxxxx6250March 2009 - December 20091

Date2 Description Payor Payee Debit CreditApril

4/13/2009 WIRE LSF KRKB -$ 15,000$ 4/23/2009 WIRE LSF KRKB - 20,000

Total -$ 35,000$

May5/1/2009 WIRE LSF KRKB -$ 5,000$ 5/7/2009 WIRE LSF KRKB - 15,000 5/22/2009 WIRE LSF KRKB - 24,000

Total -$ 44,000$

July7/1/2009 Wire LSF KRKB -$ 18,000$ 7/31/2009 Wire LSF KRKB - 25,000

Total -$ 43,000$

October10/9/2009 Deposit LSF KRKB - 4,000 10/9/2009 Deposit LSF KRKB - 4,100 10/9/2009 Deposit LSF KRKB - 4,000 10/9/2009 Deposit LSF KRKB - 4,000 10/22/2009 Wire LSF KRKB -$ 12,000$ 10/23/2009 Wire LSF KRKB - 3,000

Total -$ 31,100$

Exhibit 4.1



For Sovereign Bank Account xxxxxx6250March 2009 - December 20091

Date2 Description Payor Payee Debit CreditNovember

11/20/2009 Wire LSF KRKB -$ 18,000$ Total -$ 18,000$

December12/18/2009 Wire LSF KRKB -$ 18,700$

Total -$ 18,700$



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.

Exhibit 4.2



For Sovereign Bank Account xxxxxx62501

January 2010 - February 20101

Date Description Payor Payee Debit CreditJanuary

1/5/2010 WIRE LSF KRKB -$ 21,000$ 1/12/2010 WIRE LSF KRKB - 20,000 1/28/2010 Wire LSF KRKB - 20,000

Total -$ 61,000$ February

2/17/2010 Wire KRKB LSF -$ 20,000$ Total -$ 20,000$



Exhibit 5.0



Analysis of Advances to and Reimbursements from Liberty State Financial Holdings, Corp.Other Transactions


Date2 Description Payor3 Payee3 Debit Credit2008

1/1/2008 Corporate Counsel Fee N/A N/A 5,000$ -$ 2/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 3/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 4/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 5/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 5/6/2008 Invoices N/A N/A 1 - 6/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 7/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 8/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 9/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 10/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 11/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 11/6/2008 Invoices N/A N/A 128 - 11/6/2008 Invoices N/A N/A 377 - 11/6/2008 Invoices N/A N/A 5,627 - 11/13/2008 Invoices N/A N/A 301 - 11/13/2008 Invoices N/A N/A 61,786 - 12/1/2008 Corporate Counsel Fee N/A N/A 5,000 - 12/4/2008 Invoices N/A N/A 878 -

Total 129,098$ -$ 2009

1/1/2009 Corporate Counsel Fee N/A N/A 5,000$ -$ 2/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 2/16/2009 Purchase Agreement N/A N/A 200,000 - 3/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 4/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 5/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 6/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 7/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 8/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 9/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 10/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 11/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 12/1/2009 Corporate Counsel Fee N/A N/A 5,000 - 12/31/2009 Invoices N/A N/A 6,781 -

Total 266,781$ -$

Exhibit 5.0





Date2 Description Payor3 Payee3 Debit Credit2010

1/1/2010 Corporate Counsel Fee N/A N/A 5,000$ -$ 2/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 3/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 4/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 4/28/2010 Advance KRKB Other 1,244 - 5/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 6/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 7/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 7/8/2010 Invoices N/A N/A 301 - 7/8/2010 Invoices N/A N/A 1,300 - 7/9/2010 KRKB/MWK Other 2,900,000 - 8/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 8/16/2010 Credit Card KRKB/MWK Other 629 - 8/16/2010 Credit Card KRKB/MWK Other 359 - 9/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 10/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 10/20/2010 Credit Card KRKB/MWK Other 352 - 10/20/2010 Credit Card KRKB/MWK Other 25 - 10/20/2010 Credit Card KRKB/MWK Other 10 - 11/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 11/8/2010 Credit Card KRKB/MWK Other 50 - 11/9/2010 Credit Card KRKB/MWK Other 38 - 11/12/2010 Credit Card KRKB/MWK Other 19 - 11/15/2010 Credit Card KRKB/MWK Other 765 - 11/15/2010 Credit Card KRKB/MWK Other 93 11/15/2010 Credit Card KRKB/MWK Other 50 - 11/16/2010 Credit Card KRKB/MWK Other 150 - 11/22/2010 Credit Card KRKB/MWK Other 513 - 12/1/2010 Corporate Counsel Fee N/A N/A 5,000 - 12/7/2010 Credit Card KRKB/MWK Other 113 - 12/20/2010 Credit Card KRKB/MWK Other 57 - 12/20/2010 Credit Card KRKB/MWK Other 1,013 -

Total 2,967,081$ -$

20111/1/2011 Corporate Counsel Fee N/A N/A 5,000$ -$

Exhibit 5.0





Date2 Description Payor3 Payee3 Debit Credit1/6/2011 Credit Card KRKB/MWK Other 525 - 1/6/2011 Credit Card KRKB/MWK Other 146 - 1/10/2011 Credit Card KRKB/MWK Other 455 - 1/10/2011 Credit Card KRKB/MWK Other 405 - 1/11/2011 Credit Card KRKB/MWK Other 1,624 - 1/11/2011 Credit Card KRKB/MWK Other 488 -

1/13/20114 Guarantee MWK Other - 100,000 1/17/2011 Credit Card KRKB/MWK Other 29 - 1/18/2011 Credit Card KRKB/MWK Other 35 - 1/18/2011 Credit Card KRKB/MWK Other 2 - 1/19/2011 Credit Card KRKB/MWK Other 104 - 1/19/2011 Credit Card KRKB/MWK Other 33 - 1/19/2011 Credit Card KRKB/MWK Other 597 - 1/20/2011 Credit Card KRKB/MWK Other 179 - 1/20/2011 Credit Card KRKB/MWK Other 50 - 2/1/2011 Corporate Counsel Fee N/A N/A 5,000 - 2/22/2011 Credit Card KRKB/MWK Other 335 - 2/25/2011 Credit Card KRKB/MWK Other 922 - 2/28/2011 Credit Card KRKB/MWK Other 1,382 - 2/28/2011 Credit Card KRKB/MWK Other 361 - 2/28/2011 Credit Card KRKB/MWK Other 238 - 2/28/2011 Credit Card KRKB/MWK Other 39 - 3/1/2011 Credit Card KRKB/MWK Other 694 - 3/1/2011 Credit Card KRKB/MWK Other 156 - 3/1/2011 Credit Card KRKB/MWK Other 150 - 3/1/2011 Credit Card KRKB/MWK Other 118 - 3/1/2011 Credit Card KRKB/MWK Other 60 - 3/1/2011 Credit Card KRKB/MWK Other 25 - 3/28/2011 Credit Card KRKB/MWK Other 378 - 3/29/2011 Credit Card KRKB/MWK Other 34 - 3/29/2011 Credit Card KRKB/MWK Other 20 - 3/29/2011 Credit Card KRKB/MWK Other 17 - 3/30/2011 Credit Card KRKB/MWK Other 450 - 3/30/2011 Credit Card KRKB/MWK Other 398 - 4/15/2011 Guarantee KRKB/MWK Other 3,058,000 - 4/15/2011 Guarantee Other KRKB/MWK - 2,900,000 4/15/2011 Guarantee Other KRKB/MWK 250,000

Exhibit 5.0





Date2 Description Payor3 Payee3 Debit Credit4/25/2011 Guarantee KRKB/MWK Other 400,000 - 4/25/2011 Guarantee Other KRKB/MWK - 400,000 5/11/2011 Advance KKA Other 10,000 -

5/15/20115 Credit KRKB LSF - 298,067 Total 3,488,450$ 3,948,067$

Grand Total 6,851,409$ 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 LSF’s 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.

Article 3 - Michael Kwasnik

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