An Orange County Judge Pleads Guilty in Workers’ Comp Fraud Case

Right here in our own backyard, a rare and high-profile workers’ compensation fraud case just went down.

Orange County Superior Court Judge Israel Claustro has agreed to plead guilty to federal mail fraud. This fraud is tied to California’s Subsequent Injuries Benefits Trust Fund (SIBTF). The program provides financial support to injured workers with pre-existing impairments.

Before and during his time on the bench, Claustro operated Liberty Medical Group, a business that arranged medical-legal evaluations for SIBTF cases. Federal prosecutors say Claustro secretly continued using Dr. Kevin Tien Do for report preparation and record review. This occurred even after Do was suspended from the workers’ comp system in 2018. The suspension was due to a prior health-care fraud conviction.

According to federal filings:

• Claustro paid Do over $300,000
• Liberty billed the SIBTF more than $3 million
• Do’s involvement was concealed from regulators

Claustro will resign as part of his plea agreement. While the charge carries up to 20 years in prison, prosecutors are recommending probation and home confinement.

This case stands out for three reasons:

1. Unusual defendant: Cases involving sitting judges are extremely uncommon.
2. Program vulnerability: Medical-legal reporting remains a pressure point in California’s workers’ compensation system.
3. System trust: Fraud drains resources from injured workers and erodes confidence in public benefit programs.

Claimant and provider fraud get most of the attention. However, this case illustrates that workers’ compensation fraud risks exist at every level. It reinforces the need for oversight, credentialing, and compliance throughout the ecosystem. Because at the end of the day, businesses are paying the costs of those that fraud the system!!

-JK