Federal agents sprang a dramatic sting, arresting a Los Angeles shop worker accused of paying kickbacks to welfare recipients who made bogus purchases at his store, according to court papers detailing a fraud scheme that allegedly cost taxpayers millions.
The 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.
The 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 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.
But LA’s top prosecutor Bill 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.
“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.
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.
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.
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.
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.
