Ex-police officer convicted for insurance fraud scheme

Ex-police officer convicted for insurance fraud scheme | Insurance Business America

Ex-police officer convicted for insurance fraud scheme

A retired police officer from San Jose, CA has been convicted for his role in an elaborate money laundering and insurance fraud scheme, which involved a private security firm that he ran without his former police department’s knowledge.

Robert Foster, 48, owned and operated Atlas Private Security. Together with his wife, Foster conspired to embezzle millions of dollars by paying their employees off the books, underreporting worker injuries to avoid insurance costs, failing to pay for employee overtime, and misrepresenting employee payroll. In addition, the couple deterred employees from reporting wage-theft violations and their workplace injuries, prosecutors said.

According to prosecutors, there was one case wherein an off-the-books security guard was charged a $1 million medical bill after being severely injured in a collision while driving a company vehicle. Foster told his company’s insurer, Everest National Insurance, that the individual was not an Atlas employee – but investigators later found that the guard had been driving an Atlas vehicle and wearing an Atlas uniform during the crash.

Prosecutors also said that Foster and his wife used a subcontractor to pay employees in an attempt to avoid paying millions of dollars in taxes, despite the subcontractor being unaware of employees’ exact work hours and wages.

“Exploitation takes a massive toll on workers," Santa Clara County district attorney Jeff Rosen said in a release. "Our office does not tolerate the victimization of workers and will prosecute those responsible — no matter who they are.”

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

Foster and his wife have pleaded no contest to fraud charges. Foster will be sentenced to three years in county jail and two years of mandatory supervision, Los Angeles Times reported. Meanwhile, his wife faces one year in county jail and five years of probation. Foster will also repay over $1 million to Everest National Insurance, and to the California Employee Development Department, on top of a general order of restitution to repay his employees.