Santa Ana, CA. — An Orange County Superior Court judge has been federally charged with defrauding California’s workers’ compensation program, according to prosecutors.
Israel Claustro, 50, was charged by information with one count of mail fraud, a felony that carries a statutory maximum sentence of 20 years in federal prison. Federal court records show Claustro has signed a plea agreement in which he agrees to plead guilty to the charge and to resign from his judicial position.
Claustro is expected to make his initial appearance on January 12 in United States District Court.
“Judge Claustro violated the law for his personal financial benefit,” said Bill Essayli, First Assistant United States Attorney. “We will not hesitate to prosecute anyone — judges included — who defraud public benefits intended to help those in need.”
According to the plea agreement, Claustro committed the fraud while serving as an Orange County prosecutor. Prosecutors said he operated Liberty Medical Group Inc., a Rancho Cucamonga-based medical corporation, despite not being a physician or licensed medical professional as required under California law.
One of Liberty’s employees was Kevin Tien Do, 60, of Pasadena, a physician who previously served a one-year federal prison sentence after a 2003 felony health care fraud conviction. Because of that conviction, Do was suspended in October 2018 from participating in California’s workers’ compensation program. Prosecutors said Claustro was aware of both Do’s criminal history and his suspension.
Claustro admitted to defrauding California’s Subsequent Injuries Benefits Trust Fund, a fund within the state’s workers’ compensation system that provides additional compensation to injured workers with preexisting disabilities.
According to court documents, Claustro paid Do more than $300,000 to prepare medical evaluations, record reviews, and med-legal reports after Do’s suspension. Claustro then caused Liberty to mail the reports to the trust fund while concealing that Do prepared them by listing other doctors’ names on billing forms and reports. Based on the fraudulent submissions, Liberty received hundreds of thousands of dollars from the fund.
The loss attributable to Claustro’s role in the scheme is approximately $38,670, representing payments made by the trust fund for reports Claustro knew had been prepared by Do while he was suspended.
In a related case, Do pleaded guilty in January 2025 to one count of conspiracy to commit mail fraud and one count of subscribing to a false tax return. He is expected to be sentenced in the coming months.
The investigation is being conducted by the Federal Bureau of Investigation, IRS Criminal Investigation, and the California Department of Insurance. The case is being prosecuted by former Special Assistant United States Attorney Stephanie Orrick of the Orange County Office.
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