Orange County judge agrees to plead guilty to workers' comp fraud charges

Orange County Superior Court Judge Israel Claustro was charged by federal prosecutors Wednesday with defrauding California's workers' compensation system through a scheme involving a physician previously convicted of health care fraud.

Claustro, 50, is charged with one count of mail fraud, which carries a maximum sentence of 20 years in federal prison. U.S.A. v. Claustro, 8:26-cr-00001-FWS, (C.D. Cal., filed Jan. 07,2026).

In a statement, the U.S. attorney's office for the Central District of California said Claustro has signed a plea agreement and is expected to plead guilty at his initial appearance Jan. 12 in U.S. District Court. Authorities said he has agreed to resign from the bench.

"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 is represented by Paul S. Meyer, who said his client deeply regrets his wrongful 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," Meyer said. "In good faith, with sadness, he is voluntarily resigning his judicial office."

Orange County Superior Court spokesperson Kostas Kalaitzidis said ethical rules prevented him from discussing the matter but confirmed the court has received Claustro's letter of resignation.

Claustro was elected to the bench in 2024 and served on the Family Law Panel of the Court. He has been on leave since the beginning of the year, Kalaitzidis added.

Orange County District Attorney Todd Spitzer said his office fully cooperated with federal investigators probing former prosecutor Israel Claustro's illicit activities, providing all requested documentation.

"Claustro did not follow established OCDA office policy which requires approval of any outside employment, a procedure which is intended to safeguard against potential conflicts of interest," Spitzer said in a statement. "He betrayed his position of trust as a public servant in the most deceitful way by stealing public benefits from those who needed them the most, and he did so while masquerading as a warrior for truth and justice on behalf of the People of California."

According to court documents, Claustro operated Liberty Medical Group Inc., a Rancho Cucamonga medical corporation, while serving as an Orange County prosecutor, despite lacking any medical credentials. California law requires such entities to be owned and operated by physicians or other licensed medical professionals.

Liberty employed Dr. Kevin Tien Do, 60, of Pasadena, who previously served a year in federal prison following a 2003 health care fraud conviction. That conviction led to Do's suspension from California's workers' compensation program in October 2018. Prosecutors said Claustro knew of both the conviction and the suspension.

The scheme centered on the Subsequent Injuries Benefits Trust Fund, which provides additional compensation to workers with pre-existing disabilities who later suffer workplace injuries.

After Do's suspension, prosecutors said Claustro paid him more than $300,000 to prepare medical evaluations and reports, then caused Liberty to submit those reports to the trust fund using other physicians' names on billing forms to conceal Do's involvement. The fraud generated hundreds of thousands of dollars for Liberty, authorities said.

The investigation drew additional scrutiny after psychologist Nhung Phan sued Liberty Medical Group in 2024, seeking about $100,000 in unpaid bills for workers' compensation reports. Court records show Phan notified the medical group of 84 unpaid reports prepared between August 2016 and January 2017. She said she received an initial email from Claustro stating the bills had been paid, but later communications went unanswered. Nhung Phan v. Liberty Medical Group, 30-2024-01433743-CU-BC-CJC, (O.C. Super., Ct., filed Oct. 21, 2024).

Do pleaded guilty in January 2025 to conspiracy to commit mail fraud and subscribing to a false tax return. His sentencing is pending. U.S.A. v. Do, 8:24-CR-00137, (C.D. Cal., filed Dec. 06, 2024)