A San Jose man pleaded no contest Monday to charges that he laundered millions of dollars in payroll for two security companies, one of them run by an ex-SJPD officer currently in jail for exploiting his employees and hiding money from state authorities.
Nam Le, 52, laundered millions of dollars in payroll for San Jose-based security firms Atlas Private Security and VP Security as part of a fraud and tax evasion scheme, the Santa Clara County DA’s office said in an announcement Monday.
Authorities said Le got paid 50 cents on the dollar for every hour of payroll he helped hide as part of the fraud ring, which was run in part by Atlas owner Robert Foster, a former officer who was sentenced to three years in Santa Clara County jail last year after pleading no contest to insurance fraud, money laundering and worker exploitation.
Le will be sentenced next year. Prosecutors said that he was also ordered to pay some $109,000 in restitution, including $60,000 to the state Department of Insurance. If he has paid the full amount by the time of sentencing, he could be sentenced to a year in county jail and six years of probation; if some of the money remains unpaid, he could face four years in prison.
“The criminal organization here was a security company run by a police officer and others,” Santa Clara County District Attorney Jeff Rosen said. “It is deeply disappointing that a group that is supposed to be dedicated to protecting people instead decided to scam them.”
The San Mateo businessman’s plea is the latest conviction to result from the District Attorney’s six-month investigation into fraud at the security firms.
In January 2022, Foster — the former police officer who owned Atlas Private Security — also pleaded no contest to an array of charges accusing him of running the complex fraud scheme, which reportedly exploited mostly minority workers and methodically hid about $18 million from state unemployment and other taxes with the goal of a $1.13 million cashout for the conspirators.
Le helped hide the millions and made sure he got half of what he was laundering, according to the DA’s office. But after the Department of Labor questioned Le about the subcontractor scheme, Le wanted out, according to authorities.
He met with Foster and Richard McDiarmid — then Vice President for Atlas and a former Emeryville police officer — at the Matrix Casino and asked to leave the conspiracy. But the three instead decided to expand the scam, prosecutors said.
Foster, who retired from SJPD in July 2020, illegally reduced his workers’ compensation insurance premiums and taxes by reporting false and inaccurate payroll, underreporting headcount, paying workers off the books and underreporting worker injuries, according to the district attorney’s office. He and his wife and Atlas co-owner Mikaila Foster, 46, also did not pay employees overtime and dissuaded them from accurately reporting on-the-job injuries and wage-theft violations.
Prosecutors said Atlas employees were paid by Le’s company, Defense Protection Group, which had no knowledge of their hours, wages or schedules. Instead, Le’s company moved money from Atlas so that the Fosters could avoid paying taxes, workers’ compensation insurance and overtime wages.
Robert Foster paid $1.13 million in restitution to Everest National Insurance and the Employment Development Department prior to his sentencing last year.
Source: www.mercurynews.com