Almost half of Palm Springs' residents are homosexual men or lesbians and months of controversy followed the police operation. The sign outside Palm Springs proudly welcomes visitors to a "two-time winner of the Best Gay Destination in the World Award", and tourist information leaflets proclaim it "America's Gayest City". But no one told the police chief.
David Dominguez, the top cop in a Californian community where almost 50 per cent of residents are gay or lesbian, has been forced out of his job after instructing officers to mount an undercover sting against visitors taking advantage of the desert climate to have outdoor sex.
His early retirement comes after months of controversy over the operation, in which his officers made dozens of contentious arrests.
The final nail in Dominguez's coffin came when he was caught on tape making an "inappropriate comment", thought to involve the word "faggot".
Supporters and opponents of gay rights, in a state on the front line of the battle over same-sex marriage, have been galvanised by the affair, which began in 2009 when the police chief first ordered male officers to dress flamboyantly and walk the streets late at night, seemingly soliciting sex.
The undercover detectives would approach revellers walking home from bars and clubs in the Warm Sands neighbourhood, home to many gay hotels and resorts, and suggest an amorous liaison. Anyone who agreed was handcuffed and charged with sex offences.
Critics called it unlawful entrapment, motivated by homophobia, since no similar "sting" was mounted against heterosexuals. They noted only one of the city's 99 police officers was openly gay.
"What would happen, in a typical scenario, was that three or four of the officers would dress up in tight T-shirts. They would then approach a man, grab his crotch, and say something like 'What you got?"' said Roger Tansey, a lawyer for six victims of the sting.
"They would flirt for as long as it took to persuade the target to undress and then handcuff him."
Two dozen of the arrested men are being prosecuted under a section of the California Penal Code, which will require them, if convicted, to register as sex offenders and spend their lives on a public database intended to allow concerned parents to identify local paedophiles.
"I've never heard of a more discriminatory prosecution," said Tansey. "My clients aren't the sort of people who do this normally. They were talked into it."
Adding to the criticism, video footage emerged of one arrest in which detectives laughed at a suspect they referred to in crude terms. After the tape emerged, Dominguez ordered an inquiry, but it didn't save his job.
Palm Springs, about 160km east of Los Angeles, has become reliant on the pink dollar. It is feared the controversy may hurt the economy.
Today, it is one of America's most liberal cities, with a gay mayor and several gay council members.
Although the occasional excesses of homosexual tourists have led to complaints, the gay community's clout was evident at the last election, when Rod Pacheco, a district attorney who aggressively prosecuted men snared in the controversial "sting", was voted out.