Retired Cop Gets 3 Years for Work Comp Premium and Payroll Fraud

A retired San Jose Police officer was sentenced to three years in jail for cheating insurers and exploiting workers for his side security business, the Santa Clara County District Attorney’s Office said.

Morgan Hill resident Robert Foster, 48, was convicted in January for felony fraud charges, including 173 acts of conspiring to commit $1.13 million in insurance fraud and $18 million in money laundering. The sentence announced by the Santa Clara County Superior Court on Tuesday requires Foster to also serve two years of mandatory supervision when he finishes his jail sentence, the district attorney’s office said.

Foster has already paid complete restitution of $1.13 million to Everest National Insurance and the Employment Development Department. There was also a general order of restitution for the purpose of paying exploited workers, the office said.

“No one is above accountability for illegally trying to make a profit on the backs (and injured bodies) of their workers,” District Attorney Jeff Rosen said in a statement.

Foster founded Atlas Private Security with his wife, Mikaila Foster, 46, without the department’s knowledge, the district attorney’s office said. The company is now called Genesis Private Security.

Prosecutors say the Fosters reduced their workers’ compensation insurance premiums and taxes by reporting inaccurate payroll, underreporting the number of employees, paying employees off the books and failing to report employee injuries, according to the district attorney’s office.

Investigators discovered that the Fosters hid millions of dollars of payroll through a complex subcontractor masking scheme. Employees were paid by a different security company, Defense Protection Group (DPG), which had no knowledge of the employees’ hours, wages, or schedules. Instead, DPG simply moved money from the Fosters’ firm to the employees so that the Fosters could avoid paying their fair share of taxes, workers’ compensation insurance, and overtime wages, the district attorney’s office said.

In one case, an “off-the-books” security guard suffered severe injuries during a crash while driving an Atlas security vehicle. Robert Foster responded to the guard’s $1 million medical bill by telling the insurance company that the guard was not an Atlas employee, the district attorney’s office said. Investigators found records showing that the guard was driving an Atlas vehicle and wearing an Atlas uniform at the time of the collision. Foster retired from the San Jose Police Department after he was charged in July 2020.

Mrs. Foster also pleaded no contest to the same insurance fraud and money laundering charges. She will be sentenced to one year in county jail and five years of probation on April 29, the office said.

The California Department of Insurance, Employment Development Department, Department of Justice, and the Department of Labor assisted in the investigation.

–Claims Journal staff