Robert Foster, age 48, from Morgan Hill, a retired San Jose police officer with a side private security business, pleaded no contest on January 14th to a string of fraud and felony charges. The charges include a $1.13 million insurance fraud, workers’ compensation fraud, and worker exploitation charges. Foster will reportedly serve three years in county jail and two years of mandatory supervision along with his wife and business partner, Mikaila Foster, 46, who also pleaded no contest. He will serve one year in prison and five years on probation.
Findings From the Investigation
The probe into the retired San Jose police officer’s security business was led by the Santa Clara County District Attorney’s Office in close cooperation with the California Department of Insurance. Investigators discovered that the Fosters had illegally decreased their insurance premiums and avoided paying taxes by reporting false and inaccurate payroll, paying employees under the table, and underreporting employee injuries. Additionally, the Fosters failed to compensate employees for overtime and discouraged them from reporting occupational injuries and wage-theft violations. In one example, an under-the-table security guard was involved in a severe car accident suffering severe personal injuries while driving an Atlas security company vehicle. Investigators uncovered evidence that the guard was operating an Atlas vehicle and wearing their company uniform when the crash occurred. The retired police officer and company owner Foster responded to the guard’s $1 million medical bill by informing their workers’ compensation insurance company that the guard was not an Atlas security employee. The probe into the private security company also revealed that the Fosters attempted to hide millions of dollars of employee payroll through a complex subcontractor masking scheme. An entirely different company paid employees of the security company. The other company transferred money from the Fosters’ firm to the employees to avoid accurately reporting their payroll and headcount.
Employer Workers’ Compensation Fraud
Workers’ compensation insurance fraud occurs when business owners falsify accident records or underreport employee injuries. Businesses usually commit this fraud to lower their workers’ compensation insurance premiums. Companies fraudulently avoid paying their insurance premiums by underreporting employee headcount and employee injuries or discouraging employees from reporting their injuries. This leaves these injured workers without medical or financial assistance for their injuries. During 2017-2018, California’s insurance fraud division reported 4,106 suspected workers’ compensation fraud cases totaling potential losses amounting to $273,249,723.
Who Does Workers’ Compensation Fraud Harm?
Workers’ compensation fraud harms everyone, but in most cases, employees and law-abiding businesses are affected most by this type of insurance fraud. When a company commits workers’ compensation fraud, it indicates that these businesses are attempting to illegally evade paying their fair share into the state’s workers’ compensation fund. By omitting employee injuries and failing to contribute their fair share of insurance premiums, this fraud leaves other law-abiding businesses on the hook to pick up the costs and adjustments to their insurance premiums. Most of all, this form of fraud leaves injured workers without accountability from their employer or access to the medical and financial benefits offered by the workers’ compensation system.
Suppose you have acquired a severe personal injury or illness from your job, and your employer has denied your right to file a workers’ compensation claim. In that case, you should seek expert help from our qualified workers’ compensation attorneys at Sacramento Workers’ Compensation Attorneys P.C. Our dedicated attorneys know how complex the workers’ compensation system can be. With over 100 years of combined experience handling workers’ compensation cases, our team of Sacramento attorneys provides the best representation to injured workers and their families.
If you would like to speak with an attorney and take advantage of your FREE no-obligation consultation today, you can pick up the phone and call us at (916) 288-9193 or visit our contact page to chat directly with a workers comp attorney.