KTLA

San Jose police officer charged in multimillion-dollar fraud scheme

A judge's gavel is shown in a file photo. (Credit: iStock / Getty Images Plus)

San Jose police officer Robert Foster has been charged with using his off-duty private security company to commit insurance fraud, tax evasion, wage theft and illegally laundering about $18 million, prosecutors announced Friday.

The Santa Clara County District Attorney’s Office said the 47-year-old owner of Morgan Hill-based Atlas Private Security self-surrendered and will be arraigned on Nov. 30.

Foster’s wife and eight other company employees were also being charged with four counts of felony conspiracy to commit insurance fraud, unemployment insurance fraud, money laundering, wage theft and 39 additional felonies including extortion and a white-collar crime enhancement.

They all face prison time if convicted.

Prosecutors said Foster 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.

In one case, prosecutors said, an employee was allegedly threatened with deportation if she continued to speak to 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 reforms that included creating a Workers Exploitation Task Force that will investigate this case.

“This Office will root out and prosecute anyone – whether they wear a badge or not – taking criminal advantage of workers,” Rosen said in a press release. “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 probe revealed 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 carry on their fraud scheme, the Atlas officials allegedly laundered approximately $18.20 million.

The co-conspirators also allegedly 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. Yet, Foster allegedly failed to disclose to SJPD that he owned and operated Atlas or that such ownership could result in ethical conflicts.