California judge steps down, pleads guilty in multimillion-dollar workers’ comp fraud

An elected Orange County Superior Court judge pleaded guilty on Monday, Jan. 12, to his role in a multimillion-dollar scheme to defraud a state workers’ compensation program.

Israel Claustro, a 50-year-old former county prosecutor, agreed to resign from his position as a judge after signing a plea deal admitting to one count of mail fraud.

Claustro, during a brief Monday hearing before Magistrate Judge Douglas F. McCormick at the federal courthouse in Santa Ana, made his first appearance as a criminal defendant before being ordered released on his own recognizance.

“Do you understand what the government alleges you did?” McCormick asked Claustro.

“Yes, I do,” Claustro said.

Claustro, sitting between his two defense attorneys, briefly responded to questions from McCormick. Neither he nor his attorneys spoke directly about the allegations. Paul Meyer, one of Claustro’s attorneys, in a statement wrote that Claustro “deeply regretted” taking part in the business venture that led to the federal fraud charges.

Hours later, Claustro appeared before U.S. District Judge John W. Holcomb in another courtroom at the same courthouse to formally plead guilty. The now-former state court judge repeatedly answered, “Yes, sir” and “yes” when asked by Holcomb if he understood the rights he was giving up by accepting a plea deal and the potential punishment he is facing.

“Do you still want to plead guilty?” Holcomb asked.

“Yes,” Claustro answered.

A sentencing hearing was scheduled for June 26.

Federal prosecutors are recommending Claustro serve time in home confinement, rather than prison, along with probation. The charge carries a maximum prison sentence of 20 years.

But Judge Holcomb will ultimately decide Claustro’s sentence.

A federal investigation and subsequent charges marked an abrupt fall for Claustro, an experienced trial attorney in the Orange County District Attorney’s Office before successfully campaigning for a judicial seat.

Claustro, during his judicial campaign, spoke about growing up poor in Pomona. Since his 2022 judicial election, Claustro had served in family court.

He submitted his letter of resignation to the Orange County Superior Court on Jan. 7, officials said, after having been on leave since Jan. 1.

As part of his plea deal, Claustro admitted to operating Liberty Medical Group, a Rancho Cucamonga-based medical corporation.

Among the medical group’s employees was Dr. Kevin Tien Do, a physician with a practice in Tustin. Do previously served a year in federal prison for a 2003 felony healthcare-fraud conviction.

The fraud Claustro and Do admitted to taking part in centered around the Workers’ Compensation Subsequent Injuries Benefits Trust Fund, a state program meant to help injured workers.

Claustro violated a law requiring that a medical company such as Liberty Medical Group be run by a physician or other medical professional. He was a deputy district attorney at the time.

Orange County District Attorney Todd Spitzer has said that Claustro also violated his office’s policy requiring approval for outside employment, a safeguard against conflicts of interest.

Dr. Do, due to his previous conviction, was barred from evaluating applicants to the state workers’ comp fund.

Claustro, during his change of plea hearing, explicitly admitted that he continued to use Do to author medical evaluations despite knowing about the suspension, which he got around by submitting them to the fund under the names of other doctors.

The state sent more than $3 million to Liberty Medical Group, according to the plea deal.

Do was paid $306,000. Another $1.5 million was moved to a management company owned by Claustro. It is unclear where the rest of the money went, or if any of it was used on legitimate medical claims.

In this case, Do has pleaded guilty to conspiracy to commit mail fraud and filing a false tax return. He is awaiting sentencing.

Federal prosecutors at the time that Do’s charges became public acknowledged he had conspired with a former prosecutor turned judge. A Southern California News Group investigation in December 2024 identified Claustro as that jurist. Federal prosecutors did not name Claustro until they announced his plea deal last week.