Ex-San Jose cop pleads no contest to worker exploitation with his side security business

SAN JOSE >> A former San Jose police officer who ran a private security business will spend the next few years in jail after he pleaded no contest to an array of charges accusing him of running a complex fraud scheme that exploited mostly minority workers and methodically hid millions of dollars from state unemployment and other taxes.

One of the charges accused Robert Foster’s business, Atlas Private Security, of telling its insurance carrier that an employee injured in a vehicle crash on the job didn’t work for them, despite the employee being in uniform and driving a marked company car. That ruse diverted $1 million in medical costs to taxpayers via Medi-Cal.

Foster, 48, of Morgan Hill reached an agreement with prosecutors in which he pleaded to an assortment of fraud-related charges in exchange for a three-year county jail sentence followed by two years of supervised release.

His wife, Mikaila, 46, also pleaded no contest to multiple fraud-related charges and is expected to serve a one-year jail sentence followed by five years of probation.

Under the agreement, Foster will also be made to repay $1.13 million to his former business’s insurance carrier and the state Employment Development Department, and pay unspecified restitution.

“Our office does not tolerate the victimization of workers and will prosecute those responsible — no matter who they are,” District Attorney Jeff Rosen said in a statement Friday.

Ronald Richards, Foster’s attorney, said the resolution of the case was a reflection of his client taking responsibility for “a series of bad business decisions exacerbated by others,” and that the plea agreement “puts his matter in his rear view mirror.”

“He is a class act who has lived a life of good deeds with no prior record,” Richards said. “This one mistake is over and he will continue to succeed in life as he makes good decisions.”

Foster reportedly ran Atlas — which has since become Genesis Private Security — without authorization of the San Jose Police Department, from which he retired after the criminal charges were filed in July 2020. If he had disclosed the business, it would have likely triggered an internal police review of possible conflicts of interest.

But Foster did not try hard to conceal his association with SJPD or his business.

He even appeared on an Aug. 25, 2019, episode of the ABC celebrity game show “To Tell The Truth,” in which he told host Anthony Anderson: “My name is Robert Foster, I’m a polygraph examiner, a police officer, and I own Atlas Private Security.”

The charges capped an investigation that began in January 2020 after an Atlas employee complained to the U.S. Department of Labor about being exploited. The labor investigation confirmed the allegations, and the department alerted the district attorney’s office to investigate.

The ensuing probe found that Foster partnered with people already being investigated for workers’ compensation fraud, and entered into a subcontracting arrangement that allowed Atlas to funnel millions of dollars in payroll through another security business, even though employees were wearing Atlas uniforms.

“I don’t care what people think,” Foster wrote to an employee, according to the criminal complaint. “I just want my wallet filled with cash at the end of the day.”

An insurance-fraud allegation in the case contends that when the aforementioned employee was injured on the job, the company persuaded her to claim Medi-Cal and not claim to be an Atlas employee. Prosecutors alleged that at one point someone at the company told the employee “she needed to stop speaking to lawyers or he would speak to Federal authorities and have her deported.”

Eight other Atlas employees and associates were charged in Foster’s case, which asserts that starting in 2015, when Foster incorporated Atlas, they conspired to not report about $8 million “in off-the-books payroll” to the EDD, saving Atlas $578,000 in payroll taxes. They also allegedly falsified hiring dates and under-counting employee totals — estimated to be about 400 — to get out of $560,000 worth of insurance premium payments.

The other defendants’ cases are still pending.

The business also laundered $18.2 million between 2017 and 2020 through subcontracting arrangements and a secret bank account that was kept separate from the account they disclosed for auditing, according to the investigation.

By the time Foster and the other defendants were charged, Atlas had established a notable footprint, with its security guards working at prominent businesses like the grocery store chain Mi Pueblo and Cardenas Market. The Atlas website once boasted doing security work for companies including Supermicro, Bay Alarm, Embassy Suites, and Applebee’s, and for public entities including the Fremont Unified School District and the Santa Clara County Office of Emergency Services.