SAN JOSE (CBS SF) – A retired officer with the San Jose Police Department was convicted Friday in a multi-million dollar fraud involving a private security business he was running without the department’s knowledge, prosecutors said.
According to the Santa Clara County District Attorney’s Office, 48-year-old Robert Foster pleaded no contest to $1.13 million in insurance fraud, $18 million in money laundering, along with tax evasion and worker exploitation.
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Prosecutors said the Morgan Hill resident ran Atlas Private Security (now called Genesis Private Security) with his wife, 46-year-old Mikaila Foster, who also pleaded no contest to fraud charges in the case.
“Our Office does not tolerate the victimization of workers and will prosecute those responsible – no matter who they are,” District Attorney Jeff Rosen said in a statement.
The pair were charged following a six-month investigation which determined they illegally reduced their insurance premiums and taxes through a variety of methods, including through reporting false and inaccurate payroll, underreporting headcount, paying workers “off-the-books”, and underreporting injuries.
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According to the DA’s office, one example involved a security guard who was off-the-books being severely injured in a crash in a company vehicle. Robert Foster responded to the guard’s $1 million medical bill by denying that the guard worked for him, even though the investigation determined the guard was in a company vehicle and wearing an Atlas uniform at the time of the crash.
Prosecutors also said the Fosters failed to pay employees overtime and dissuaded them from accurately reporting on-the-job injuries and wage-theft violations.
Robert Foster will be sentenced to three years in county jail and two years of mandatory supervision, the DA’s office said. He will also be ordered to pay $1.13 million to Everest National Insurance and the state’s Employment Development Department, along with restitution.
The former officer is scheduled to be sentenced on February 25.
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Meanwhile, Mikalia Foster will be sentenced to one year in county jail and five years of probation. Prosecutors said her sentencing date is on April 29.