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In January 2022, Robert Foster, of Morgan Hill, a retired San Jose Police officer with a side security business was convicted of $1.13 million in insurance fraud, $18 million in money laundering to cover it up, tax evasion, and worker exploitation.

Foster pleaded no contest to a series of felony fraud charges and will be sentenced to three years in county jail and two years of mandatory supervision. Foster will repay $1.13 million to Everest National Insurance and the Employment Development Department.

Foster owns Atlas Private Security (now Genesis Private Security) with his wife, Mikaila Foster, who also pleaded no contest to a variety of related fraud charges

In one instance, an “off-the-books” security guard suffered severe injuries during a crash while driving an Atlas security vehicle. Robert Foster responded to the guard’s $1 million medical bill by telling the insurance company that the guard was not an Atlas employee. Investigators found records showing that the guard was driving an Atlas vehicle and wearing an Atlas uniform at the time of the collision.

The probe also uncovered that the Fosters allegedly hid millions of dollars of payroll through a complex subcontractor masking scheme. Employees were paid by a different security company, which had no knowledge of the employees’ hours, wages, or schedules. Instead, the other company simply moved money from the Fosters’ firm to the employees so that the Fosters could avoid paying their fair share of taxes, workers’ compensation insurance, and overtime wages.

And this month, a 52-year-old San Jose man has pleaded no contest to felony insurance fraud after he used his company to hide payroll for the security company run by the Fosters.

Nam Le operated Defense Protection Group to launder millions of dollars in payroll for Atlas Private Security. For operating an under-the-table subcontractor scheme, Le was paid $0.50 to $1 per hour of payroll he helped hide.

Le will be sentenced next year for the fraud charges and faces prison if he fails to pay more than $100,000 in restitution.

After the Department of Labor questioned Le about the subcontractor scheme, he met with Robert Foster, and Richard McDiarmid, 62, Vice President of Operations for Atlas and former Emeryville police officer, at the Matrix Casino and asked to leave the conspiracy. Instead, the trio decided to expand the scam.

In all, Le helped launder approximately $18 million for Atlas Security. He is ordered to pay approximately $109,000 in restitution and penalties, including $60,000 back to the State of California Department of Insurance. If all restitution is paid by sentencing, he will serve six years of formal probation and one year in county jail. If he has not paid all restitution by sentencing, he will be sentenced to four years in state prison.

The six-month investigation was spearheaded by the Santa Clara County District Attorney’s Bureau of Investigation in collaboration with the California Department of Insurance, Employment Development Department, CA Department of Justice Division of Medi-Cal Fraud and Elder Abuse, and United States Department of Labor. This case paralleled the formation of the DA’s Workforce Exploitation Task Force.