Ex-SJPD cop sentenced to three years for exploiting employees of his private security firm [Bay Area News Group]

San Jose Mercury News (CA)

SAN JOSE – An ex-San Jose police officer who ran a private security company has been sentenced to three years in Santa Clara County jail for his part in a scheme that exploited employees and hid millions of dollars from state employment and other taxes.

In January, Robert Foster, 48, of Morgan Hill, pleaded no contest to felony charges including 173 acts of conspiring to commit $1.13 million in insurance fraud and $18 million in money laundering to cover it up, according to the Santa Clara County District Attorney’s Office.

“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 Tuesday.

In addition to the jail sentence, Foster will serve two years of mandatory supervision.

Foster, along with his wife Mikaila Foster, 46, owned Atlas Private Security without the knowledge of the San Jose Police Department.

According to the district attorney’s office, the Fosters illegally reduced their workers’ compensation insurance premiums and taxes by reporting false and inaccurate payroll, underreporting headcount, paying workers off the books and underreporting worker injuries. The couple also did not pay employees overtime and dissuaded them from accurately reporting on-the-job injuries and wage-theft violations.

A six-month investigation spearheaded by the district attorney’s office also found that the Fosters hid millions of dollars of payroll through a complex subcontractor masking scheme. Prosecutors said APS employees were paid by a different security company, Defense Protection Group, which had no knowledge of their hours, wages or schedules. Instead, DPG moved money from APS so that the Fosters could avoid paying their fair share of taxes, workers’ compensation insurance and overtime wages.

Prior to his sentencing, Robert Foster paid $1.13 million in restitution to Everest National Insurance and the Employment Development Department, according to the district attorney’s office.

Mikaila Foster also pleaded no contest to the same felony charges. Prosecutors said she will be sentenced to one year in county jail and five years of probation on April 29.