Former Pharmaceutical Executive Sentenced for Falsifying Financial Documentation

DETROIT - A Northville man was sentenced Tuesday 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, announced United States Attorney Dawn N. Ison.

Ison was joined in the announcement by Special Agent in Charge Cheyvoryea Gibson, Federal Bureau of Investigation, Detroit Field Division

Theodore Toloff, 65, entered his guilty plea in January before United States District Judge David M. Lawson.

According to court records, Toloff served as the Chief Financial Officer of the Frank W. Kerr Company ("Kerr"), a now-defunct pharmaceutical wholesaler that was based in Novi, Michigan. Kerr had a revolving credit agreement with two large financial institutions under which the company borrowed funds up to $60 million pursuant to a calculation dependent on the company's eligible accounts receivable and inventory. Toloff admitted that he submitted false documentation to the financial institutions that included $18 million in ineligible accounts receivable and that Kerr borrowed additional funds after this false documentation was submitted. The Court found that Toloff's criminal conduct caused Kerr's lenders to sustain a loss of $1.3 million, which Toloff was also ordered to pay back to the lenders as restitution.

"Corporate executives should be held to the same standard of honesty as anyone else when they interact with lending institutions," stated United States Attorney Dawn N. Ison. "When individuals lie to lenders, those lies cause loans to become more difficult and more expensive for honest consumers and businesses to access. My office is committed to ensuring that those who engage in dishonest financial crimes are held accountable."

"The defendant admitted to providing false documents to a financial institution, undermining the laws and integrity of our financial systems, said Special Agent in Charge Cheyvoryea Gibson of the FBI in Michigan. "The FBI works tirelessly with our law enforcement partners and regulatory agencies to investigate those who commit financial crimes. If you believe you have information related to financial crimes, I urge the public to submit tips on alleged crimes such as those detailed in this case to 1-800-CALLFBI (1-800-225-5324) or online at tips.fbi.gov."

The case was prosecuted by Assistant U.S. Attorney Andrew J. Yahkind. The investigation was conducted by the Federal Bureau of investigation.