US Atty Bill Essayli holds a press conference in Los Angeles, CA (Screenshot @USAttyEssayli)
Undercover LA Raid Exposes California’s Multi-Million Dollar Welfare Fraud
California receives 80% of the federal funding for illegal immigrant families
By Katy Grimes, July 7, 2026 12:00 pm
Federal agents conducted an undercover raid in Los Angeles on Thursday July 3, 2026 targeting SNAP food stamp benefits fraud at a Skid Row store, the California Post exclusively reported. The raid is part of a broader federal crackdown on retailer fraud in California’s large welfare programs.
Agents from the U.S. Department of Agriculture’s Office of Inspector General and Homeland Security Investigations, backed by LAPD, swarmed Escamex Party Supplies, a bodega warehouse-style store on Towne Avenue in Skid Row. They arrested Jesse Cervantes-Gomez, 30, a cashier.
The store allegedly processed over $1 million in suspicious SNAP food stamp transactions. Investigators flagged it due to unusually high SNAP food stamp volume of $732k+ in one year, which is nearly double nearby competitors, as well as large average transaction sizes, which investigators say are clear signs of phony purchases.
“California’s $12.5 billion SNAP program is the largest in the country. About 11% of the program’s payments are issued in error — most commonly through false or incomplete household information provided by recipients or through administrative errors — according to California Legislature’s Nonpartisan Fiscal and Policy Advisor,” the California Post reported.
Undercover agents posed as fraudsters seeking cash kickbacks. In May and June, and a planned July 2 deal, Cervantes-Gomez allegedly rang up fake SNAP purchases and handed over roughly 50% in cash.
Cervantes-Gomez was arrested when officers showed up instead of the undercover buyer. He faces federal food stamp fraud charges, which could result in felony charges, up to 20 years in prison and/or a $250,000 fine.
This was one of six raids that day.
“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,” the Post reported.
The USDA also issued violation notices to 33 SNAP-authorized retailers in LA: six for cash-for-benefits exchanges and 27 for selling prohibited items alcohol, tobacco, vapes.
“These programs are administered by the state, and the state have not done a good enough job to weed out the fraudsters,” First Assistant U.S. Attorney for the Central District of California, and former state Assemblyman Bill Essayli told the California Post. “The days of defrauding government benefit programs are over. We’re talking federal prison sentences, not state misdemeanor charges.”
Essayli emphasized that SNAP benefits are meant for food assistance for the needy, not cash kickbacks or prohibited purchases, and vowed continued enforcement as part of federal efforts, including the White House Task Force to Eliminate Fraud led by Vice President JD Vance.
California’s SNAP program is the nation’s largest at $12.5 billion, serving 5.5 million people, and has faced scrutiny for more than 11% improper payments and retailer abuse.
EBT skimming is another issue with $3.6M per month stolen.
First Assistant U.S. Attorney Essayli has been vocal about cracking down on several California fraud schemes involving healthcare, homelessness funds, and food stamps, and has criticized lax state oversight.
This SNAP food stamp fraud case aligns with ongoing federal scrutiny of welfare programs, and highlights serious operational fraud at the retailer level in high-poverty areas, alongside broader debates about program integrity, state administration, and taxpayer costs in California.
In June a federal report by the U.S. Department of Health and Human Services Administration for Children and Families revealed that California received 80% of the federal funding for illegal immigrant families, the Globe reported.
More than $617 million in taxpayer-funded cash welfare went to California households headed by illegal immigrant parents last year.
In 2024, Temporary Assistance for Needy Families basic assistance was provided to more than 85,000 child-only households headed by a parent excluded from the assistance unit because of immigration status, and California was the primary driver of the national total, accounting for about 59,600 households and about $617.5 million, or roughly 81% of nationwide spending on these cases.
And, almost 4 in 5 federal dollars projected to flow through California’s state budget in 2025-26 — $136.6 billion — support health and human services for millions of Californians, including children, seniors, and families with low incomes.
One-third of California’s state budget is made up of federal funding, which is why Gavin Newsom is losing his mind over federal funding cuts, and why he at California Attorney General Rob Bonta continue suing the Trump administration.
A California native and Navy mom, Katy lives in Sacramento, CA.
RELATED ARTICLES
-
April 20, 2022 -
April 29, 2025 -
October 20, 2025
I’ve been hit up for half price groceries via food stamp fraud, never accepted it. While it’s certainly done with one shopping basket, if you see two baskets paid for separately with the same ebt card chances are it’s the 50% off ebt scam. The scammers want some booze and drug money. In the meantime, the welfare people can plug up a grocery line by trying to haggle with the clerk, sending the bagger at least once to exchange items or get forgotten items instead of voiding the purchase and going back themselves so the shoppers behind them have a chance to cash out. Some will purposely slow walk a purchase – a couple of times I left product on the counter belt when the cashier didn’t hurry them on and went to another store. I think that instead of an ebt card, there should be a special line set up just for food stamps and coupon clippers (they can clog a line too), and that it should be obviously evident to everyone around that someone is accessing welfare benefits. While there are people who are poor through no fault of their own, ebt users can be among the most obnoxious, presumptive, demanding, pushy jerks on earth.
Where is Gov. Fraud? The California Commucrats are probably dreaming up a new law that prohibits any undercover activities for uncovering EBT fraud, with threats of putting agents in jail.
Thank you Commucrats for supporting fraud.
I want reparations, for all the taxes we have paid going to criminals.
The Biden 4 years were a preview of corruption to come if he or Kamala were elected in 2024. California is a microcosm of what the country under forever Dem/commie would have turned into and still might.