A former pharmaceutical executive from Northville has pleaded guilty to bank fraud charges related to falsifying financial documentation to secure loans, according to federal authorities. Theodore Toloff, 65, admitted to the scheme while serving as the CFO of the now-defunct Frank W. Kerr Company, a Novi-based pharmaceutical wholesaler.
Toloff confessed to inflating the company's accounts receivable by $18 million to secure additional borrowing power under a revolving credit agreement with two major financial institutions, an agreement that initially allowed the firm to borrow up to $60 million, the U.S. Attorney's Office of the Eastern District of Michigan detailed the guilty plea on Wednesday, which was reported by The Detroit News.
The investigation, spearheaded by the FBI, unearthed the fraudulent practices that ultimately led to the company's ability to withdraw additional funds based on the manipulated financial records, as revealed in a release from the U.S. Attorney's Office. "The defendant admitted to providing false documents to a financial institution, undermining the law and integrity of our financial systems," said Special Agent in Charge Cheyvoryea Gibson of the FBI in Michigan, as per a statement on the Department of Justice website.
U.S. Attorney Dawn N. Ison emphasized the broader implications of such offenses, telling Patch,"Today’s guilty plea reflects my office’s continued commitment to ensuring that our banking and lending systems are not distorted through false financial information," Toloff has been released on a $10,000 unsecured bond, pending sentencing. Frank W. Kerr Company, fell into Chapter 7 bankruptcy back in 2016, and later closed a Chapter 11 bankruptcy in 2020, leaving numerous creditors including pharmaceutical companies and a law firm with claims totaling over $5.9 million.
The case against Toloff is being prosecuted by Assistant U.S. Attorney Andrew J. Yahkind.
