A former Orange County Superior Court judge and local prosecutor was sentenced on Thursday, Aug. 27 to a year of probation for his role in a multimillion-dollar scheme to defraud a state workers’ compensation program.
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Israel Claustro, 50, was also ordered to pay a $5,000 fine, as the prosecution and defense both noted he has already resigned from his position as a judge, has taken a public blow to his reputation and faces the likely loss of his law license.
“Both sides recognize that significant punishment has taken place before sentencing,” said Paul Meyer, one of the attorney’s representing Claustro.
U.S. District Court Judge John W. Holcomb during Claustro’s sentencing hearing at the federal courthouse in Santa Ana noted that the probation and pretrial services department — which routinely writes reports about defendants that include sentencing recommendations to judges — suggested a six-month home confinement and three years of probation.
Both the prosecution and the defense denied that Claustro was receiving special treatment. They agreed that Claustro’s criminal actions took place before he was a judge and were unrelated to his duties as a prosecutor. Judge Holcomb ultimately agreed that the case did not constitute public corruption and that confinement for Claustro — whether at home or in prison — was not necessary.
“I believe it is just and appropriate in this circumstance,” Holcomb said of the sentence of probation and a fine.
In brief comments to the court, Claustro offered an apology, as group of supporters watched from the gallery.
“I’m incredibly remorseful and sorry for everything that happened and I take full responsibility,” Claustro said.
While still working for the Orange County District Attorney’s Office, Claustro operated Liberty Medical Group, a Rancho-Cucamonga-based medical corporation.
Among the medical group’s employees was Dr. Kevin Tien Do, who had previously served a year in federal prison for a 2003 health-care fraud conviction. That conviction meant Dr. Do was barred from evaluating applicants to the state workers’ compensation fund.
But Claustro, as part of his plea deal, admitted that he used Do to author medical evaluations for applicants to the state fund, despite knowing about his suspension. Claustro got around Dr. Do’s suspension by submitting applications to the fund that Do had crafted under the names of other doctors, according to his plea deal.
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.
Claustro, in a personal letter to the court, attributed his actions to “the feeling of financial insecurity I had known since childhood.” He described growing up in a “poverty level” family of seven children in Pomona, where his immigrant parents “worked hard to support us all” but were “always struggling to meet the bills and put food on our table.”
Spending his childhood years in a community “riddled with gang activity,” Claustro says he was driven to go to law school and join the Orange County District Attorney’s Office, were he prosecuted gangs, violent crimes and police misconduct.” But Claustro described being taxed emotionally and financially when his father was seriously injured in a car crash in 2008, leaving him in a coma that lasted nine years until his death.
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Claustro wrote that in 2015 a trusted friend and fellow attorney informed him of a “business opportunity” in “assisting severely injured workers with preexisting conditions to obtain workers compensation benefits.” A medical management company was needed to coordinate medical examinations of the workers from multiple medical providers, Claustro wrote, due to the severity of their injuries and the complexity of the claims process. Claustro felt it was “a business I could operate remotely in my off-hours.”
Claustro described meeting and becoming friends with Dr. Do, who he believed was “a licensed medical doctor with many years of conducting medical evaluations for injured workers.” Claustro admitted failing to look into Dr. Do’s background, and said it wasn’t until 2018 when he learned that Do was suspended from conducting workers compensation medical evaluations due to his felony condition for health care fraud.
Dr. Do said he had turned his life around after the conviction, Claustro wrote, and claimed other doctors could conduct the medical evaluations during his suspension.
“My financial insecurity and belief in a friendship outweighed my better judgement, and I agreed,” Claustro wrote.
Claustro wrote that in late-2021 he learned Dr. Do was “doing the major part of the evaluations and preparations of reports. But Claustro — who was planning to get out of the medical management business in preparation for seeking a judgeship in 2022 — admitted that he kept billing the state for the evaluations and reports that Dr. Do should not have been conducting.
“I knew at the time it was wrong but rationed that my deceit was not a major issue because the workers had sustained serious injuries, Dr. Do was a competent doctor, and the medical reports accurately documented the workers’ injuries,” Claustro wrote. “As a trained lawyer, I knew at the time that the state law that led to Dr. Do’s suspension in participating int he workers’ compensation program was enacted to ensure public trust in the workers’ compensation program. Yet, I deceived the people of the State of California so I could continue to earn extra income…
“My conduct was wrong and I realize that it contributed to ever-increasing public cynicism about government institutions, Claustro wrote.
During his time on the bench, Claustro served as a family law judge.
After his guilty plea and decision to step down from the bench, the California Commission on Judicial Performance publicly censured Claustro and barred him from ever serving as a California judge again. The commission found that even though the misconduct occurred before he was a judge, it still represented a crime of moral turpitude that violated the Code of Judicial Ethics. Claustro agreed to the state discipline, which marked the strongest sanction that could be imposed on a judge who had already resigned from public office.
“We appreciate the careful evaluation by the government and the fair sentence by the Court,” Meyer, Claustro’s attorney, said in a statement released after the sentence in the criminal case was announced. “This was a just result.”
Had Claustro been convicted of the mail fraud charge he was facing — rather than accept a plea deal — he could have faced up to 20 years in prison.
Assistant United States Attorney Jennifer Waier also told Judge Holcomb during the sentencing hearing that Claustro “did help the government move the case along,” an apparent reference to the criminal charges against Dr. Do. A sentencing hearing for Do is currently scheduled for mid-September.
Claustro was allowed to practice law leading up to his sentencing. He reactivated his state law license two days before formally pleading guilty earlier this year. But, now that the criminal case had ended, he faces a likely disciplinary investigation from the state bar.
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Staff writer Tony Saavedra contributed to this report.