Northville man convicted of defrauding banks to get millions for the Novi company

DETROIT – A Northville man was convicted this week of falsifying financial information to secure millions in loans for a now-defunct Novi pharmaceutical company.

Theodore Toloff, 65, a former pharmaceutical executive, entered a guilty plea in January before U.S. District Judge David Lawson. Toloff was sentenced Oct. 8 to one year and one day in prison, followed by two years of supervised release, for providing a financial institution with false documentation in connection with a bank loan, said U.S. Attorney Dawn N. Ison.

The US Attorney’s Office Eastern District said Toloff was the Chief Financial Officer of the Frank W. Kerr Company, or “Kerr,” a pharmaceutical wholesaler based in Novi.

Kerr had a revolving credit agreement with two major financial institutions, under which the company took out loans of up to $60 million, with borrowing capacity tied to the assets they had available to secure the loans.

Toloff reportedly admitted that he had submitted false documentation to the financial institutions, including $18 million in ineligible accounts receivable, and that Kerr had borrowed additional money after this false documentation was submitted.

The court ruled that Toloff’s criminal conduct caused Kerr’s lenders to suffer a loss of $1.3 million, which Toloff was also required to return to the lenders in restitution.

“Business leaders should be held to the same standard of honesty as anyone else when dealing with credit institutions,” Ison said in a news release. “When individuals lie to lenders, those lies make borrowing more difficult and expensive for honest consumers and businesses. My office is committed to ensuring that those who commit dishonest financial crimes are held accountable.”

Cheyvorea Gibson, Sspecial agent in charge of the FBI Detroit Field Division said anyone with information related to financial crimes is asked to submit tips at 1-800-CALLFBI (1-800-225-5324) or online at tips.fbi .gov.

“The defendant admitted to providing false documents to a financial institution, undermining the laws and the integrity of our financial systems.” said Gibson. “The FBI works tirelessly with our law enforcement partners and regulatory agencies to investigate those who commit financial crimes.”

Contact reporter Laura Colvin at [email protected].

This article originally appeared on Hometownlife.com: Northville man convicted of defrauding banks to get millions for Novi company