A retired San Jose police officer was convicted Friday of committing more than $1 million in insurance fraud and $18 million in money laundering after exploiting workers at a private security company he operated without the Police Department's knowledge, prosecutors said.
Robert Foster, 48, and his wife owned Atlas Private Security and conspired to pocket millions of dollars by paying employees off the books, underreporting employee injuries, failing to pay employees for overtime and reporting false payroll.
Through those schemes and several others, Foster and his wife reduced the business' insurance premiums and taxes. Both pleaded no contest to a series of fraud charges.
The couple also dissuaded employees from reporting wage-theft violations and injuries they suffered on the job.
In one case, prosecutors said, an off-the-books security guard faced a $1-million medical bill after being severely injured in a crash while driving a company vehicle, and Foster told the insurance company that he was not an Atlas employee.
Investigators later found that the guard had been driving an Atlas vehicle and wearing an Atlas uniform at the time of the crash.
Foster and his wife also used a subcontractor masking scheme to avoid paying millions of dollars in taxes, workers' compensation insurance and overtime, prosecutors said. Their employees were paid by a separate company that had no knowledge of the workers' hours or wages but simply moved money from the Fosters' company to the employees.
“Exploitation takes a massive toll on workers," Santa Clara County Dist. Atty. Jeff Rosen said in a news release. "Our office does not tolerate the victimization of workers and will prosecute those responsible — no matter who they are.”
Foster will be sentenced to three years in county jail and two years of mandatory supervision, prosecutors said; his wife faces one year in county jail and five years of probation. Foster will repay more than $1 million to the insurance company, Everest National Insurance, and to the state's Employee Development Department. He also faces a general order of restitution to repay the affected employees.
This story originally appeared in Los Angeles Times.