Bay Bancorp in Columbia, Md., is defending itself against claims it should be held responsible for embezzlement that allegedly took place at a bank it recently bought.
Alvin Lapidus, a former chairman at Hopkins Federal Savings Bank in Baltimore, and his wife filed a lawsuit against Bay in late September, based on claims that a former Hopkins Federal employee embezzled at least $1.4 million from personal accounts before Bay bought the bank in July. The lawsuit was filed in the U.S. District Court of Maryland.
The lawsuit alleged that the employee, whom it did not name, transferred funds to the accounts of third parties from April 2013 to last July. The lawsuit also claims that the employee concealed the theft by making false entries into their banking accounts.
The $496 million-asset Bay, by buying Hopkins, should be responsible for anything that took place before the merger, the lawsuit claimed, adding that the company "conducted extensive due diligence" that included the seller's "assets, liabilities, procedures and controls." The couple wants Bay to credit their accounts for the allegedly embezzled funds and pay earned interest along with $75,000 in compensatory damages, costs and prejudgment interest.
Bay, in its response to the lawsuit, said the couple should have reviewed their bank statements to discover any unauthorized payments, noting that they also failed to act before the deal closed. Bay, which identified the bank employee as Melissa Strohman, also claimed that the statute of limitations has passed.
Efforts by American Banker to reach Strohman were unsuccessful. Strohman, though her husband, declined to discuss the matter with the Baltimore Business Journal.