Owner pleads no contest to felony insurance fraud and tax evasion

“Workers’ comp insurance fraud puts employees at risk and often allows a business owner to bid lower for jobs than a competitor who is honest in its reporting for insurance coverage.  In addition, tax evasion hurts all Californians and the services that California can provide.”

CSLEA President Alan Barcelona

SACRAMENTO – On April 23, 2025, Martha Toro pled no contest to felony insurance fraud and felony tax evasion and was sentenced to 270 days county jail and two years formal probation for each violation, according to the Sacramento County District Attorney’s Office. 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 in order 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 more than $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.