DATE: April 24, 2025
CASE: Martha Toro (Case #23FE014369)
PROSECUTOR: Deputy District Attorney John MacKenzie, Insurance Fraud Unit
On April 23, 2025, Martha Toro pled no contest to felony insurance fraud and felony tax evasion. The Honorable David Bonilla sentenced Toro to 270 days county jail and 2 years formal probation for each violation. The judge also ordered Toro to pay restitution, fines and interest totaling $1,454,130, of which $848,370 will go to Markel Insurance and $605,760 will go to the Franchise Tax Board.
In February 2020, the California Department of Insurance (CDI) opened an investigation into Toro, who is the owner of MT Janitorial Services. Markel Insurance provided information showing Toro was committing insurance fraud by under-reporting how many employees she had to illegally lower the amount of her workers’ compensation insurance premiums. The investigation led by CDI and assisted by the Franchise Tax Board (FTB), determined that Toro misrepresented the number of employees working for MT Janitorial Services for each of the audit years between 2013 and 2020. This resulted in the insurance carrier losing over $800,000 in income for coverage of workers’ compensation insurance. The FTB, with the assistance of CDI, also determined that Toro falsified her tax returns to avoid paying the taxes that she owed for tax years 2016 to 2020.
Tax evasion directly impacts Californians by jeopardizing the revenue crucial to sustaining essential services and programs. By identifying and stopping those who choose to operate in the underground economy, we can help close California’s tax gap.
Insurance fraud of this nature puts employees of the company at risk if they are injured on the job. It also illegally reduces costs for the fraudster, allowing them to undercut honest employers on job bids. This results in unfair competition and hurts not only other companies within the industry, but also consumers who have less choices in reputable companies.
