Retired San Jose police officer with secondary security firm uncontested $1.13m in insurance fraud, $18m in money laundering to cover him, escape taxation and labor exploitation.

Robert Foster, 48, of Morgan Hill, did not contest a series of criminal fraud charges on January 14 and will be sentenced to three years in prison and two years of mandatory supervision. Foster will reimburse $1.13 million to Everest National Insurance and the Department of Employment Development.

“Exploitation takes a heavy toll on workers,” District Attorney Jeff Rosen said. “Our office does not condone the victimization of workers and will prosecute whoever is responsible.”

According to a press release from the district attorney, Foster owns Atlas Private Security (now Genesis Private Security) with his wife, Mikaila Foster, 46, who also pleaded no contest to various related fraud charges. She will be sentenced to one year in prison and five years probation.

The investigation found that the Fosters were illegally reducing their insurance premiums and taxes by reporting false and inaccurate payrolls, underreporting headcount, paying “off-the-books” employees, and underreporting employee injuries. employees.

Additionally, the Fosters failed to pay employees overtime and discouraged those employees from accurately reporting workplace injuries and wage theft violations.

The former officer owned the business without the knowledge of the San Jose Police Department, according to Rosen’s statement.

Robert Foster is due to be sentenced on February 25. Mikaila Foster is due to be sentenced on April 29.

The six-month investigation was conducted by the Santa Clara County District Attorney’s Office of Investigation, working closely with the California Department of Insurance, Department of Employment Development, Department of Justice and the Ministry of Labor.

The Fosters illegally reduced their insurance premiums and taxes by reporting false and inaccurate payrolls, underreporting the workforce, paying employees informally, and underreporting employee injuries. The Fosters failed to pay employees overtime and discouraged those employees from accurately reporting workplace injuries and wage theft violations.

In one case, an “official” security officer was seriously injured in an accident while driving an Atlas security vehicle, the press release said. Robert Foster responded to the guard’s $1 million medical bill by telling the insurance company that the guard was not an Atlas employee. Investigators found documents showing the guard was driving an Atlas vehicle and wearing an Atlas uniform at the time of the collision.

The investigation also revealed that the Fosters allegedly hid millions of dollars in payroll through a complex system of hiding contractors. The employees were paid by a different security company, which had no knowledge of the employees’ hours, wages or schedules. Instead, the other company simply transferred money from the Fosters’ business to the employees so the Fosters could avoid paying their fair share of taxes, workers’ compensation insurance, and wages. overtime.

Bay City News contributed to this report.