Federal agents executed a sting operation culminating in the arrest of a Los Angeles retail worker suspected of facilitating a multi-million dollar welfare fraud scheme. The operation, targeting the illegal exchange of Supplemental Nutrition Assistance Program (SNAP) benefits, involved the U.S. Department of Agriculture’s Office of Inspector General (OIG) and Homeland Security Investigations.
Agents on Thursday swarmed Escamex Party Supplies in Skid Row, arresting Jesse Cervantes-Gomez, 30, a worker at the store. Cervantes-Gomez was apprehended as he believed he was meeting an individual for another welfare kickback transaction. Instead, he was taken into custody by federal agents. The takedown was one of at least four such raids conducted in Los Angeles on Thursday as part of a broader crackdown on SNAP retailer fraud.
SNAP, commonly known as food stamps, is a federal program designed to provide monthly financial assistance to low-income individuals for the purchase of groceries. Benefits are distributed via Electronic Benefit Transfer (EBT) cards, which function similarly to debit cards at authorized retailers.
However, authorities allege that these benefits are frequently exploited for illegal purposes, including cash kickbacks and the purchase of prohibited items such as alcohol and tobacco. “SNAP benefits are intended to provide monthly food assistance to low-income individuals, not to enrich fraudsters,” said Los Angeles prosecutor Bill Essayli. “We will crack down on and continue arresting those who defraud American taxpayers.”
Following the raids, the USDA issued violation notices to 33 SNAP-authorized retailers across Los Angeles. These notices cited allegations of illegal SNAP benefit exchanges for cash and the sale of restricted products including beer, liquor, and vaping devices. Six stores were specifically charged with selling SNAP benefits in exchange for cash, while 27 others were cited for exchanging benefits for prohibited items.
Investigators identified Escamex Party Supplies as a point of interest after observing its unusually high SNAP transaction volume. From April 2025 to April 2026, the store processed $732,608.26 in SNAP purchases, nearly double that of its nearest competitor. Further analysis revealed significantly higher average purchase amounts per SNAP transaction, suggesting fabricated sales. Court documents indicate that investigators uncovered over $1 million in suspected fraud at the store.
Undercover agents conducted several transactions at Escamex to gather evidence. On May 18, an agent posing as someone seeking to exchange SNAP benefits for cash was directed by Cervantes-Gomez to a back area of the store. Cervantes-Gomez allegedly instructed a clerk to ring up $2,900 in SNAP sales, after which he provided the agent with $1,450 in cash as a kickback. He also reportedly gave the agent his cell number to arrange future deals.
A subsequent undercover operation on June 19 involved a similar transaction where Cervantes-Gomez allegedly processed $3,240 in phony purchases and provided a kickback of $1,740. On July 2, investigators planned another meeting, intending to exchange $2,400 for a kickback of $1,200. However, instead of the undercover agent, uniformed officers arrived to arrest Cervantes-Gomez.
Cervantes-Gomez faces charges of food stamp fraud, a felony offense that carries a potential penalty of up to 20 years in prison and a fine of up to $250,000. He was being held in custody awaiting a bail hearing. Investigations into SNAP retailer fraud are ongoing in the region.