The Los Angeles Police Department called the long-term investigation and bust "Operation Protecting the Dream." Two dozen suspected gang members were arrested.
Police say the raid will change a neighborhood plagued by gang violence and extortion for decades to come.
"Criminal street gangs make their living extorting the weak, extorting those that have no voice, extorting people that are hard-working men and women just trying to provide for their families," said LAPD Chief Charlie Beck.
More than two dozen suspected MS-13 gang members were arrested for allegedly charging taxes and rent to food truck operators in the southeast Hollywood corridor area. Police say they charged vendors as much as $100 a week and demanded free food.
"They considered that area their land and if they did not cooperate, they would either be harmed, killed, something could happen to their employees or something could happen to their family members," said LAPD Officer Eddie Guerra.
One woman who has run a food truck in the so-called MS-13 territory for more than a decade knows that fear well. She says she's been approached by gang members, but she's never paid.
"We come from El Salvador, which is a country where this kind of thing is normal," she said. "So we don't want to come to another country and face the same thing, more extortion."
One man who asked to remain unidentified lives near one of the apartment buildings that was raided. He said paying taxes to gangs and living in fear is part of life in this neighborhood.
"There's rules," he said. "It happens in bigger stores too. Nothing really you can do about it."
But now police are here to tell the community there is something they can do about it: As one of the victims they call a hero did by working with police to get the people extorting him off the street.
"He came to this country with a dream, and he says that even though his face will not be known and no one will actually know who he is at some point, but he knows that through his efforts the entire community is going to be better for it," said Guerra.
There were more than a dozen victims in the investigation, police said. Eight children were placed in protective custody as a result of the bust, including a 5-year-old who had to be hospitalized due to what investigators called neglect issues.