An Orange County Superior Court judge, Israel Claustro, has been federally charged with mail fraud in connection to a scheme involving California’s workers’ compensation program. According to court documents filed Tuesday, Claustro, 50, agreed to plead guilty and resign from his judicial position.
Claustro is expected to make his initial appearance on January 12 in United States District Court in Santa Ana. The charge of mail fraud carries a maximum sentence of 20 years in federal prison.
“Judge Claustro violated the law for his personal financial benefit,” said First Assistant United States Attorney Bill Essayli. “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 operated Liberty Medical Group Inc., a medical corporation based in Rancho Cucamonga, while he was an Orange County prosecutor. He was neither a physician nor a licensed medical professional as required by state law.
The plea states that one of Liberty’s employees was Dr. Kevin Tien Do, 60, of Pasadena. Do had previously served time for felony health care fraud and was suspended from participating in California’s workers’ compensation program after his conviction. Despite knowing about Do's suspension and prior conviction, Claustro paid him over $300,000 for preparing medical evaluations and reports after the suspension took effect.
Claustro admitted that he concealed Do’s involvement by listing other doctors' names on billing forms and reports sent by mail to California’s Subsequent Injuries Benefits Trust Fund (SIBTF). As a result of these actions, Liberty Medical Group received hundreds of thousands of dollars from SIBTF based on fraudulent submissions. The loss attributed directly to Claustro is approximately $38,670—the amount SIBTF paid out based on reports he knew were drafted by Do after the suspension.
Dr. Do pleaded guilty last year to conspiracy to commit mail fraud and subscribing to a false tax return; sentencing is pending.
The investigation into this matter involved the FBI, IRS Criminal Investigation Division, and the California Department of Insurance. Former Special Assistant United States Attorney Stephanie Orrick prosecuted the case out of the Orange County Office.
The U.S. Attorney's Office for the Central District of California serves more than 19 million residents across seven counties through offices located in Los Angeles, Santa Ana, and Riverside (official website). This office enforces federal laws through criminal prosecutions and civil representations (official website), focusing on both prosecution of criminal cases and handling civil matters for the government (official website). It works with various law enforcement partners at all levels (official website) and supports community outreach programs aimed at victim assistance and public education (official website). E. Martin Estrada serves as United States Attorney for this district (official website).
