Ex-police officer convicted for insurance coverage fraud scheme

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A retired San Jose, California police officer has been convicted of his role in an elaborate money laundering and insurance fraud scheme involving a private security firm that he ran unbeknownst to his former police department.

Robert Foster, 48, owned and operated Atlas Private Security. Along with his wife, Foster conspired to embezzle millions of dollars by paying his employees off the books, by not reporting worker injuries to avoid insurance costs, by not paying overtime, and by misrepresenting employees’ payroll records. In addition, the couple discouraged employees from reporting wage-theft violations and their workplace injuries, according to prosecutors.

According to prosecutors, there was one case in which an unobtrusive security guard was billed a $1 million medical bill after he was seriously injured in a collision with a company vehicle. Foster told his company’s insurer, Everest National Insurance, that the person was not an Atlas employee – but investigators later found the security guard had been driving an Atlas vehicle and was wearing an Atlas uniform during the accident.

Prosecutors also said that Foster and his wife used a subcontractor to pay employees to avoid paying millions of dollars in taxes, although the subcontractor did not know the employees’ exact hours and wages.

“Exploitation takes a massive toll on workers,” Santa Clara County District Attorney Jeff Rosen said in a press release. “Our office will not tolerate harassment of workers and will prosecute those responsible — no matter who they are.”

The couple was also convicted of $18 million in money laundering.

Foster and his wife have not contested allegations of cheating. Foster is sentenced to three years in county jail and two years of custody, the Los Angeles Times reported. Meanwhile, his wife faces a year in prison and five years probation. Foster will also pay back over $1 million to Everest National Insurance and the California Employee Development Department, in addition to a general refund order to pay back his employees.