San Jose cop charged with exploiting workers in side security business
SAN JOSE CA Aug 1 2020 A veteran San Jose police officer is the subject of dozens of criminal charges that allege a multi-layered conspiracy in which he ran a private security business that exploited and underpaid mostly minority workers, and aggressively hid millions of dollars in revenues from state unemployment and other taxes.
In an exhaustive 43-count criminal complaint born from a six-month investigation, Robert Foster and nine other business partners and associates — including his wife — are charged with wage theft and an array of other crimes centered around under-reporting payroll through shell subcontractors and a shadow bank account that shielded the true earnings of Atlas Private Security, Inc. from auditors and tax collectors.
Prosecutors further allege that to keep the scheme secret, Foster and several of his co-defendants discouraged overworked employees — some of them believed to be working 24-hour shifts at times for slightly above minimum wage with no overtime pay — from identifying themselves as Atlas employees when seeking medical care for on-the-job injuries, or from seeking workers’ compensation benefits.
In some instances when an employee strayed from those directives, executives or supervisors threatened to report the employee to immigration authorities for deportation, according to the criminal complaint.
“A person who holds an important position of trust within our community used his position to defraud others to enrich himself,” Santa Clara County Deputy District Attorney Mattia Corsiglia said. “The Santa Clara DA’s Office takes white collar crime and the exploitation of all workers, regardless of status, very seriously.”
Foster, a 47-year-old Morgan Hill resident, self-surrendered Thursday and was booked at the Main Jail before being released on his own recognizance, according to authorities. Messages left with a listed phone number and email address for Foster, as well as for his attorney, were not returned Thursday.
The charges also accuse Foster of subcontracting $1 million in business with Troy Carson, despite knowing that Carson was, and still is, being prosecuted for alleged workers’ compensation fraud. Carson is not charged in Foster’s case.
According to correspondence obtained by the DA and included in the complaint, Foster was unapologetic to an employee about profits from the deal despite Carson being under criminal suspicion.
“Thank you sir … And I don’t care what people think,” Foster wrote, according to the complaint. “I just want my wallet filled with cash at the end of the day.”
All of this happened as Foster openly traded on his status as a 23-year San Jose police officer and certified lie detection expert. But he is alleged to have kept his ownership of Atlas obscured from the police department, seemingly to avoid scrutiny for conflicts that would have violated the agency’s secondary employment policies.
The police department referred inquiries to the district attorney’s office, but confirmed Foster has not been on active duty since March 25.
“Once the police department was made aware of the investigation, he was placed on administrative leave,” spokesperson Sgt. Enrique Garcia said.
Public records suggest that if Foster was actively hiding his role in Atlas from SJPD, it would not have been hard to sniff out. Filings with the California Secretary of State clearly identify Foster as the company’s CEO in 2018 and 2019.
And well before Atlas, filings show that in 2002, Foster founded a firm called Security Code 3, which he sold in 2008. Prosecutors say Carson helped Foster conduct the sale, later started a firm using the same name, and then sold that firm to Atlas.
If that wasn’t enough, Foster appeared on an Aug. 25, 2019 episode of the ABC celebrity game show “To Tell The Truth,” where after a segment about polygraph examiners, 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 filed over the past week capped an investigation that began in January after an Atlas employee formally complained to the U.S. Department of Labor that he was being exploited. The labor investigation confirmed the employee’s allegations, and the department alerted the district attorney’s office to investigate the potential criminal conduct.
In the lead-up to the charges, DA investigators served a search warrant at an Atlas office on East Hedding Street earlier this month, during which they were seen carrying several boxes of files out of the one-story building just a block or so from where the DA’s office is located.
All told, the defendants are implicated in a conspiracy that began in the fall of 2015 — when Foster incorporated Atlas — and failed to report about $8 million “in off-the-books payroll” to the the California Employment Development Department, saving Atlas $578,000 in payroll taxes in the past five years. They are also accused of falsifying hiring dates and under-counting employee totals — estimated to be about 400 — to get out of $560,000 worth of insurance premium payments.
Several of the defendants are also accused of laundering $18.2 million since 2017 through subcontracting arrangements and a secret bank account that was kept separate from the account they disclosed for auditing.
Much of the activity that spurred the criminal investigation was in plain sight. Employees were working security guard shifts at businesses like the grocery store chain Mi Pueblo and Cardenas Market, and the Atlas website 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 the Santa Clara County Office of Emergency Services.
Prosecutors say another subcontracting arrangement allowed Atlas to funnel millions of dollars in payroll through Defense Protection Group, despite employees wearing Atlas uniforms. That issue previously emerged about two years ago when, according to the criminal complaint, an employee was injured while working at one of the grocery stores.
At the hospital, the company tried to dissuade the employee from identifying herself as an Atlas employee — despite being in uniform when the injury occurred — and to claim her treatment with Medi-Cal, according to the complaint. Someone at the company allegedly told the employee “she needed to stop speaking to lawyers or he would speak to Federal authorities and have her deported.”
Atlas lied to its insurance carriers about another employee injury that resulted in more than $1 million in treatment costs being passed on to Medi-Cal, according to the complaint.
DA investigator Lt. Michael Whittington said the case is a prime example of the type of investigations that will be the focus of the office’s new Worker Exploitation Task Force, unveiled last week as part of host of reforms pledged by District Attorney Jeff Rosen.
“This is a case that is demonstrating our commitment to individuals in communities who are typically marginalized,” Whittington said. “That profit on the backs of our marginalized community, that’s what we as an agency want to expose.”
