OC Judge Who Conspired With LA Doctor Sentenced For Workers' Comp Fraud

ORANGE COUNTY, CA — Former Orange County Superior Court Judge Israel Claustro was sentenced Thursday to one year of probation for workers' compensation fraud.

Claustro, who was also ordered to pay a $5,000 fine, pleaded guilty Jan. 12 to one count of mail fraud and agreed to resign from the bench. The Commission on Judicial Performance subsequently issued a public censure and barred him from holding future judicial office.

Under federal sentencing guidelines, Claustro initially faced four to 10 months behind bars and a fine ranging from $2,000 to $20,000, but prosecutors recommended a reduction based on his early acceptance of responsibility and agreement to resign.

"We appreciate the careful evaluation by the government and the fair sentence by the court," Claustro's attorney, Paul Meyer, said. "This was a just result."

Claustro engaged in the fraud scheme with Dr. Kevin Tien Do while Claustro was a prosecutor with the Orange County District Attorney's Office. Do pleaded guilty Jan. 3, 2025, to one count each of conspiracy to commit mail fraud and subscribing to a false tax return. Do is awaiting sentencing Sept. 15.

"Judge Claustro violated the law for his personal financial benefit," First Assistant U.S. Attorney Bill Essayli said following Claustro's guilty plea. "We will not hesitate to prosecute anyone -- judges included -- who defraud public benefits intended to help those in need."

Meyer said previously that Claustro "deeply regrets his wrongful 2022 participation in a business venture that did not involve any part of his work as a district attorney and ended before he became a judge. He takes full responsibility for his actions, and cooperated fully in the investigation. In good faith, with sadness, he is voluntarily resigning his judicial office."

Orange County Superior Court spokesman Kostas Kalaitzidis said his office was prohibited from commenting because of court ethics rules. Claustro had served in Family Law court since his election and had been on leave since the beginning of the year before entering his plea, Kalaitzidis said.

According to Claustro's plea agreement, prosecutors agreed to recommend probation or up to six months of home confinement and not to pursue charges related to taxes. Federal prosecutors remain free to prosecute Claustro "for any other unlawful past conduct or any unlawful conduct that occurs after the date of this agreement," according to the deal.

Claustro operated Rancho Cucamonga-based Liberty Medical Group Inc. even though state law requires such businesses to be operated by a doctor or medical professional, prosecutors said.

When Do was charged in 2024, prosecutors referred to Claustro as an unnamed co-conspirator. In his plea agreement, Do acknowledged that Claustro was the actual owner and that Do was unable to perform the work because he had been suspended following a 2003 conviction for felony health care fraud.

"I was paid $306,111 for work I should not have done," Do said in court when he pleaded guilty last year.

Prosecutors said Claustro was aware of Do's prior criminal conviction and inability to work in the program. Do appealed his suspension and informed Claustro when he lost the appeal in October 2018, prosecutors said.

"I knew Dr. Do prepared medical reports after being suspended from the workers' compensation program," Claustro said at his change-of-plea hearing.

In his plea agreement, Claustro admitted defrauding the state's Subsequent Injuries Benefits Trust Fund, part of the workers' compensation system that provides benefits to injured workers with preexisting disabilities.

Claustro paid Do to prepare medical reports, prosecutors said. The scheme involved using other doctors' names on billing forms and reports. Prosecutors pegged the loss at about $38,670 and said the state paid more than $3 million in billings submitted by the company.

Do hired a medical professional to conduct patient evaluations, but that person died of natural causes in December 2021, prosecutors said. Afterward, Claustro continued to pay Do for medical evaluations, medical record reviews and preparation of med-legal reports, according to prosecutors.

The $38,670 loss was determined to be the amount Claustro paid Do "after defendant became aware that co-schemer Do was actually providing the services," prosecutors said in the plea agreement.

Do also admitted failing to report $66,227 in income on his 2021 tax return. The income was paid to an entity he controlled rather than directly to him to conceal the fraud, prosecutors said.

Do was previously convicted in August 2003 of aiding and abetting health care fraud, according to the Medical Board of California. He was sentenced to a year in federal prison in October 2003 and ordered to pay $366,031.24 in restitution.

Do participated in a scheme to defraud Medi-Cal from April 1997 through the end of 1998, according to the medical board.

In his current case, Do admitted in his plea agreement that from October 2018 through February 2024, he participated in a scheme to defraud the state out of millions of dollars in workers' compensation funds, prosecutors said.

Do prepared workers' compensation-related medical reports that were billed to the state's Subsequent Injuries Benefits Trust Fund, prosecutors said.

Do fraudulently listed other doctors' names on billing forms and medical reports because he was prohibited from performing the work, prosecutors said. He admitted in his plea agreement that Liberty received more than $3 million from the state for reports submitted after his 2018 suspension.

According to Do's plea agreement, about $1.5 million went to the company's owner and his wife.