Federal agents busted an alleged SNAP fraud ring in LA in dramatic fashion, taking down a cashier accused of paying kickbacks to welfare recipients for bogus purchases.
The California Post was on the scene as federal agents in armored vests, backed by uniformed LAPD officers, swarmed Escamex Party Supplies in Skid Row on Thursday. Squad cars shut down Towne Avenue as investigators moved in on the warehouse-style storefront.
Agents surrounded and cuffed Jesse Cervantes-Gomez, 30, as the Los Angeles resident exited the Escamex bodega in Skid Row where he works. Cervantes-Gomez thought he was meeting a fraudster for another welfare kickback, but instead he was headed to jail.
Jesse Cervantes-Gomez was busted in a welfare fraud sting in LA Thursday. CA Post
California’s $12.5 billion SNAP program is the largest in the country. About 11% of the program’s payments are issued in error, according to California Legislature’s Nonpartisan Fiscal and Policy Advisor.
“These programs are administered by the state, and the state have not done a good enough job to weed out the fraudsters,” Los Angeles’ top federal prosecutor Bill Essayli told The California Post.
Federal officials said the true size of SNAP fraud in the state remains unknown, although it is estimated to be in the tens of millions of dollars. The federal government is now taking a closer look at the program as part of the White House Task Force to Eliminate Fraud, officials said.
“The days of defrauding government benefit programs are over,” said Essayli. “We’re talking federal prison sentences, not state misdemeanor charges.”
Agents counted case at Escamex Party Supplies. CA Post
Thursday’s takedown was just one of at least four such raids conducted in LA Thursday by the U.S. Department of Agriculture’s Office of Inspector General (OIG) and Homeland Security Investigations (HSI) in a crackdown on Supplemental Nutrition Assistance Program retailer fraud.
Also known as food stamps, SNAP is a federal program that provides monthly funding to help low-income residents buy groceries. Benefits are issued on an Electronic Benefit Transfer card, which functions like a debit card at authorized retailers.
Essaylli said such welfare benefits are too often used for illegal fraud kickbacks, or for the purchase of prohibited products such as alcohol and tobacco.
The Skid Row store is the alleged site of more than $1 million in welfare fraud. CA Post
“SNAP benefits are intended to provide monthly food assistance to low-income individuals, not to enrich fraudsters,” said Essayli. “We will crack down on and continue arresting those who defraud American taxpayers.”
Following Thursday’s raids, the USDA issued violation notices to 33 SNAP-authorized retailers across the city for the illegal exchange of SNAP benefits for cash and the sale of prohibited items such as alcohol and tobacco.
Republican gubernatorial candidate Steve Hilton said the program is rife with waste.
“We’re the richest state in America but we have the highest poverty rate,” he told The Post. “We pay the highest taxes but get the worst results.”
That’s because “epic levels of fraud that have been allowed to go undetected and unpunished,” Hilton said.
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Six stores were charged with selling SNAP benefits in exchange for cash while 27 stores were charged with exchanging SNAP benefits for a range of prohibited items including beer, hard seltzer, bottles of liquor, and a vape device.
Federal investigators identified Escamex as a potential target for fraud after noticing that the low-volume grocery store was processed $732,608.26 in SNAP purchases from April 2025 to April 2026, nearly twice the amount of its closest nearby competitor.
Top LA Prosecutor Bill Essayli vowed to tackle welfare ripoffs. Carlin Stiehl for CA Post
Cops closed the block for Thursday’s sting. CA Post
Investigators also determined that the store also had far bigger average purchase amounts for each SNAP transaction, in another a sign of phony purchases. In all, investigators discovered more than a $1 million in suspected fraud at the store, court papers charge.
That was enough for the feds to send undercover agents to the store posing as fraudsters.
On May 18, an undercover agent posing as a ripoff artist walked into Escamex and asked if they could receive cash back on their SNAP benefits. Cervantes-Gomez told the agent to meet him in the back of the store and instructed a clerk to ring SNAP sales for $2,900.
Once the SNAP purchase went through, Cervantes-Gomez gave the undercover agent $1,450 in cash and his cell number to set up more deals, court papers charge.
Agents surrounded the storefront. CA Post
An undercover agent allegedly got kickbacks worth thousands. CA Post
A month later the undercover agent came back and conducted a similar deal with Cervantes-Gomez, this time charging $3,240 in phony purchases and receiving a kickback of $1,740.
On July 2, investigators made another plan to meet Cervantes-Gomez, telling the allegedy crooked store worker that they had $2,400 for bogus purchases that, in theory, would’ve warranted a kickback of $1,200.
Agents searched Escomex after arresting Cervantes-Gomez. CA Post
But instead of the undercover agent showing up, uniformed officers came and took Cervantes-Gomez into custody.
The alleged fraudster is charged with food stamp fraud, a felony punishable by up to 20 years in prison, a fine of up to $250,000, or both. Cervantes-Gomez was being held in custody and was due to appear for a bail hearing Monday.
About 5.5 million Californians receive SNAP benefits, all of it federally funded, with an average monthly benefit of about $192 per person, according to the Fiscal and Policy Advisor.
SNAP EBT cards have long been a target of thieves in the Golden State, who steal their value from legitimate benefit recipients primarily through a process called card skimming, at a rate of approximately $3.6 million per month, according to Governor Gavin Newsom’s office.
The USDA’s Food and Nutrition Administration polices SNAP-authorized stores for fraud by carrying out nearly 50,000 undercover compliance visits each year and analyzing receipts from tens of thousands of retailers.
If the FNA finds evidence of fraud, investigators and agents are brought in to pursue criminal charges.
FNA Acting Administrator Shiela Corley said the USDA is “rooting out bad actors” who exploit the SNAP assistance program.
“Fraud of any kind is a direct attack on American taxpayers and the vulnerable families who rely on SNAP,” she said.