While California officials keep fighting the Trump administration over federal funding, federal agents in Los Angeles were working an alleged food-stamp kickback case out of a Skid Row storefront.
Agents with the U.S. Department of Agriculture’s Office of Inspector General and Homeland Security Investigations, backed by LAPD, raided Escamex Party Supplies on Towne Avenue last Thursday. Jesse Cervantes-Gomez, 30, a cashier at the store, was arrested and accused of paying cash kickbacks on fake SNAP transactions.
Investigators said Escamex processed $732,608.26 in SNAP purchases from April 2025 to April 2026. That was nearly twice as much as its closest nearby competitor, even though the store was described as a low-volume grocery business. Court papers cited in the report also pointed to unusually large average purchases and more than $1 million in suspected fraud tied to the location.
Bill Essayli, the top federal prosecutor in Los Angeles, put the responsibility on the state.
"These programs are administered by the state, and the state have not done a good enough job to weed out the fraudsters."
Essayli also warned that welfare fraud defendants are now looking at federal prison exposure.
On May 18, an undercover agent allegedly asked Cervantes-Gomez for cash back on SNAP benefits. Cervantes-Gomez allegedly had a clerk run $2,900 in SNAP sales and then handed the agent $1,450 in cash, along with his cell number for future deals.
Investigators say the agent returned a month later. That time, the alleged fake purchases totaled $3,240, and the cash kickback allegedly came to $1,740.
On July 2, officers showed up instead of another buyer.
The Skid Row arrest was part of a broader federal action in Los Angeles. USDA issued violation notices to 33 SNAP-authorized retailers after the raids. Six stores were accused of exchanging benefits for cash. Twenty-seven were accused of exchanging benefits for prohibited items, including alcohol, tobacco, and vapes.
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California’s SNAP program totals $12.5 billion and serves roughly 5.5 million people, making it the largest in the country. About 11 percent of payments go out in error, often because of false or incomplete household information or administrative mistakes, California’s nonpartisan fiscal adviser found.
Gov. Gavin Newsom and Attorney General Rob Bonta have spent months suing the Trump administration over federal funding fights. That same state government oversaw an Employment Development Department that acknowledged $31 billion in unemployment benefits may have been stolen during COVID-era claims. The Justice Department also announced a guilty plea in a separate case involving nearly $270 million in fraudulent Medi-Cal claims.
The Administration for Children and Families (TANF) released numbers on immigration-related child-only welfare cases. The report found that roughly $617.5 million in cash assistance went to California households through those cases in fiscal year 2024. That was more than 81 percent of nationwide spending under the program’s immigration-related, child-only category.
The report states:
Although the benefit is formally paid on behalf of the child, it still supports a household that includes an immigration-status-ineligible parent.
Nearly 60,000 California households fell into this category in fiscal year 2024. Nationwide, there were about 85,000 such households. California accounted for roughly seven out of every 10 immigration-related child-only TANF cases in America.
The Los Angeles raid leaves California with the largest SNAP program in the country, dozens of retailer violations in one city, and a Skid Row store accused of turning food-stamp benefits into cash.
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