Federal agents have arrested a suspect in Los Angeles accused of operating a scheme that allegedly defrauded the Supplemental Nutrition Assistance Program (SNAP) of over $1 million. The suspect, Jesse Cervantes-Gomez, is accused of using the Escamex Party Supplies bodega to facilitate the fraud by processing fake purchases on recipients' Electronic Benefit Transfer (EBT) cards and returning a portion of the funds in cash.
Law enforcement claims that the bodega processed approximately $732,608 in SNAP benefits within a single year, a figure nearly double that of its nearest competitor, with unusually large average transactions. Undercover agents conducted sting operations, posing as individuals seeking to convert benefits to cash. In one sting, agents allegedly facilitated $3,240 in phony sales, yielding $1,740 in cash for the participants.
The operation allegedly allowed recipients to receive cash for their food benefits, while the store profited from transaction fees. Trafficking benefits for cash and filing false claims for nonexistent groceries are explicitly prohibited under the Food and Nutrition Act. Cervantes-Gomez faces up to 20 years in prison and a $250,000 fine.
This bust is part of a larger crackdown on SNAP fraud in Los Angeles. On the same day as the Escamex raid, the U.S. Department of Agriculture (USDA) issued violation notices to 33 SNAP-authorized retailers across the city. Six of these retailers were cited for direct cash trafficking, while 27 others were flagged for allowing benefits to be used for prohibited items such as alcohol and vaping products.
Nationally, studies from previous years have estimated SNAP trafficking to account for 1-2% of total benefits, totaling $1-1.3 billion annually, with an involvement of 12-14% of retailers. Broader improper payments within SNAP have lingered around 10-11% in recent fiscal years, costing over $10 billion, although not all of this amount is attributed to outright fraud.
USDA Secretary Brooke L. Rollins, confirmed in early 2025, has implemented measures to combat SNAP fraud, including enhanced data sharing with states and the establishment of a dedicated SNAP Program Integrity Data Team. Federal prosecutors in Los Angeles, such as Bill Essayli, have been working with investigators to use data analytics to identify and pursue cases of fraud.
Authorities emphasize that this operation highlights the mechanics of retailer-driven SNAP fraud, the potential for detection when thoroughly investigated, and the impact of prioritizing enforcement against such schemes.