Case Explained:This article breaks down the legal background, charges, and implications of Case Explained: OC Judge Likely to Plead Guilty in Fraud Case – Legal Perspective
Orange County Superior Court Judge Israel Claustro is expected to plead guilty Monday to workers’ compensation fraud.
Claustro, 50, signed his plea agreement Wednesday and is expected to enter the guilty plea Monday afternoon, according to the U.S. Attorney’s Office. He was also charged with one count of mail fraud and has agreed to resign as a judge, authorities said.
Claustro allegedly engaged in the fraud scheme with Dr. Kevin Tien Do, 60, of Pasadena, while he was a prosecutor with the Orange County District Attorney’s Office. Do, 60, of Pasadena, pleaded guilty Jan. 3 of last year to single counts each of conspiracy to commit mail fraud and subscribing to a false tax return.
“Judge Claustro violated the law for his personal financial benefit,” First Assistant U.S. Attorney Bill Essayli said. “We will not hesitate to prosecute anyone — judges included — who defraud public benefits intended to help those in need.”
Claustro’s attorney, Paul Meyer, said 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 is prohibited from making a statement due to the ethical rules of court. Claustro has served in the Family Law court since his election and has been on leave since the beginning of this year, Kalaitzidis said.
According to Claustro’s plea agreement, prosecutors will recommend probation or up to six months in home confinement. They will not seek charges related to taxes, according to Claustro’s plea agreement. But federal prosecutors are still free to go after Claustro in the future “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 he was not a doctor or medical professional, which is required under state law, prosecutors said.
When Do was charged in 2024, prosecutors alluded to Claustro as an unnamed co-conspirator. In his plea agreement, Do acknowledged Claustro was the actual owner and that Do was also unable to do the work because he had been suspended due to 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 allege that 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 that appeal in October 2018, prosecutors said in Claustro’s plea agreement.
In Claustro’s plea agreement, he admitted to defrauding the state’s Subsequent Injuries Benefits Trust Fund, which is part of the state’s workers’ compensation program that helps injured workers who already have a disability due to work.
Claustro paid Do to prepare medical reports, prosecutors said. The fraud scheme involved using other doctors’ names on the billing forms and reports, they added. Prosecutors pegged the loss at about $38,670, and said the state paid more than $3 million of the company’s billings.
Do hired a medical professional to do patient evaluations, and that person died in December 2021 of natural causes, prosecutors said. After that, Claustro allegedly continued to pay Do for medical evaluations, medical record reviews and preparation of med-legal reports.
The $38,670 in 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 he failed to report $66,227 in income on his 2021 tax return. That was income he received that was paid to an entity he controlled rather than in his name to cover up the fraud, prosecutors said.
Do was previously convicted in August 2003 for aiding and abetting health care fraud, according to the Medical Board of California. Do was sentenced to a year in federal prison in October 2003 and ordered to pay $366,031.24 in restitution, according to the medical board.
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 deal that from October 2018 through February of 2024, he participated in a scheme to defraud the state out of millions of dollars in health care funds through workers’ compensation, prosecutors said.
Do drafted workers’ compensation-related medical reports that he would then bill 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 could not do so, prosecutors said. Do admitted in the plea agreement that Liberty received more than $3 million by the state for the reports after his 2018 suspension.
According to Do’s plea agreement, about $1.5 million went to the company’s owner and his wife.