Liberty Bell Bank Suffers $301,000 Loss from Employee Theft

Somebody at Liberty Bell Bank must have walked under a ladder.

For the past six years, Liberty Bell Bank, of Marlton, N.J., has been wrestling with a group of dissident investors led by Michael Kwasnik, a bank co-founder who also served as its first chairman. Since leaving the bank, Kwasnik launched several unsuccessful takeover attempts and been the target of prosecutors.

Now comes word that, at some time during 2011, an employee stole $301,000 from the bank. Because Liberty Bell did not have insurance coverage, the theft took a bite out of the bank's bottom line. Instead of reporting net income of $375,000 for 2011, Liberty Bell's full-year profit was $74,000.

The theft was disclosed in Liberty Bell's 2011 annual report, which was filed with the Federal Deposit Insurance Corp. last month. The $170 million-asset Liberty Bell classified the theft on its books as a fraud loss.

Liberty Bell did not name of the employee, nor the date, location or circumstances of the theft. Liberty Bell President and Chief Executive Kevin Kutcher did not return a call seeking comment. Calls to prosecutors' offices in Burlington and Camden counties were not returned. Liberty Bell's four offices are located in those central New Jersey counties.

It has been a long road for Liberty Bank.

William Dunkelberg, the chief economist at the National Federation of Independent Business, succeeded Kwasnik as the bank's chairman.

Kwasnik was indicted last year by a New Jersey grand jury on charges that he stole $1 million from a 96-year-old woman in Cherry Hill, N.J., after she hired him for legal work. Kwasnik was later charged by the state attorney general with running a Ponzi scheme in which elderly investors lost about $8.5 million.

The New Jersey Department of Banking in 2010 issued a cease-and-desist order against Kwasnik and his affiliated shareholders, to cease acting in concert without authorization to manipulate the bank's operations. Kwasnik's group is appealing the decision and the case remains pending in New Jersey state court, said Marshall McKnight, a spokesman for the state banking department.

Liberty Bell's luck has not been all bad.

Last month, Beneficial Mutual Bancorp (BNCL) disclosed that it had gained a 25.4% stake in the company after Kwasnik had defaulted on a loan backed by common stock. Kwasnik had used the shares to stymie various initiatives by Liberty Bell management and to attempt to take over the company. Beneficial, based in Philadelphia, has said that it has no intention of taking over Liberty Bell.