South Bay Cop Charged In Alleged $18M Money Laundering Scheme: DA

SANTA CLARA COUNTY, CA — A San Jose police officer has been charged with using his private security company to commit insurance fraud, tax evasion, wage theft, and about $18 million in money laundering, the Santa Clara County District Attorney’s Office announced in a news release Friday.

Robert Foster, 47, the Morgan Hill owner of Atlas Private Security, self-surrendered and will be arraigned Nov. 30 on felony charges, prosecutors said.

Foster’s wife and eight other company employees are being charged with four counts of felony conspiracy to commit insurance fraud, unemployment insurance fraud, money laundering, and wage theft, and 39 additional felonies, including extortion and a white-collar crime enhancement, prosecutors said. They face prison time, if convicted.

The officer and his co-defendants allegedly reduced insurance premiums and taxes by reporting false and inaccurate payroll, underreporting headcount, paying employees off-the-books, and underreporting employee injuries, prosecutors said. In one case, an employee was allegedly threatened with deportation if she continued to speak attorneys about her rights under worker’s compensation laws after suffering a workplace injury.

The arrest comes just days after District Attorney Jeff Rosen announced a series of social justice reforms that included creating a Workers Exploitation Task Force that will investigate cases such as this one.

“This Office will root out and prosecute anyone – whether they wear a badge or not - taking criminal advantage of workers,” Rosen said.

“Our new task force will protect and heal the victims of labor trafficking, wage theft and illegal exploitation and raise awareness about how these insidious crimes are attacks on our communities of color.”

The six-month investigation was led by the Santa Clara County District Attorney’s Office Bureau of Investigation in close collaboration with the California Department of Insurance, Employment Development Department, California Department of Justice Bureau of Medical Fraud and Elder Abuse and United States Department of Labor.

The probe showed that Foster allegedly hid approximately $8.09 million in payroll over three years, avoided approximately $578,716.56 in tax liability and $560,293.15 in insurance premiums, prosecutors said.

To advance their fraud scheme, the Atlas officials allegedly laundered approximately $18.20 million.

The co-conspirators used and traded on Foster’s position as an active-duty San Jose Police Officer and self-described expert in lie detection to further their business interests. Foster allegedly failed to disclose to the San Jose Police Department that he owned and operated Atlas or that such ownership could result in ethical conflicts.