Jael Watts of New Jersey and Luis Pino-Copete have been convicted.
UTICA, NY – October 3, 2026 (STL.News) A federal jury has convicted a New Jersey woman and her Colombian husband in a sprawling, multiyear fraud scheme that prosecutors say targeted government programs intended to transport elderly and disabled Americans and assist people experiencing homelessness.
Jael Watts, 45, of Alloway, New Jersey, and Luis Pino-Copete, 42, of Bogotá, Colombia, were convicted following a multi-week trial in U.S. District Court for the Northern District of New York. The jury found the defendants guilty on every charge contained in a third superseding indictment filed Sept. 10.
The case centers on Pearl Transit Corp., a New Jersey nonprofit organization that represented itself to government agencies as a provider of transportation, homeless outreach and charitable dental services.
Federal prosecutors proved at trial that Pearl Transit did not employ the nationwide network of drivers it claimed to employ and did not provide the transportation services underlying numerous reimbursement claims.
The scale of the fraud requires an important distinction.
Prosecutors said Watts and Pino-Copete sought more than $13 million in federal reimbursements through false claims and submissions between July 2019 and October 2025. They did not receive $13 million.
Trial evidence showed the scheme obtained more than $1.6 million in federal funds, according to the Justice Department.
Those payments included:
- $529,500 in Community Development Block Grant funds administered by Gwinnett County, Georgia;
- $429,885 in Federal Transit Administration Section 5310 funds administered by the Los Angeles County Metropolitan Transportation Authority;
- $283,000 in Emergency Solutions Grant funds administered by Kern County, California; and
- $379,149 in Section 5310 funds administered through Raleigh, North Carolina.
The four amounts identified by prosecutors total approximately $1.62 million.
The money originated with federal programs administered by the U.S. Department of Transportation and Department of Housing and Urban Development but passed through state and local agencies responsible for approving projects and reimbursements.
Some of the money involved pandemic-era funding provided through the CARES Act.
Fake drivers, fake passengers and stolen identities
The fraud relied in part on records purporting to document people working for Pearl Transit or receiving services from it.
According to evidence presented at trial, Watts and Pino-Copete used personal identifying information belonging to real people to create employment and client records.
Some supposed Pearl Transit passengers were already dead on the dates when company records claimed they received rides.
Other people were listed as drivers despite not possessing driver’s licenses. Prosecutors said some had never driven a vehicle, while one supposed driver had only a learner’s permit during the period Pearl Transit claimed that person was providing transportation.
The Sept. 10 third superseding indictment provides considerably more detail about how prosecutors said the records were manufactured.
It says Watts and Pino-Copete obtained names, addresses, dates of birth, and driver’s license numbers belonging to other people and used the information to create records falsely identifying those people as Pearl Transit employees or customers.
The scheme eventually encountered a much more aggressive verification process in New York.
That appears to have been the beginning of its collapse.
New York auditors stopped more than $1.2 million
Pearl Transit applied in March 2022 for funding through the Federal Transit Administration’s Section 5310 Enhanced Mobility of Seniors and Individuals with Disabilities program.
Section 5310 funding is intended to help meet transportation needs of older adults and people with disabilities when adequate transportation is unavailable or insufficient.
The third superseding indictment charged — and the jury convicted — Watts of making a false statement in connection with that application. Prosecutors said the application falsely carried an attorney’s affirmation even though the attorney had neither reviewed nor signed it. Watts was also convicted of aggravated identity theft arising from the unauthorized use of the attorney’s identity.
Pearl Transit subsequently obtained a New York transportation contract covering services in Suffolk, Putnam, Rockland and Westchester counties.
New York’s public contract database shows a Pearl Transit Department of Transportation grant with an original contract amount of $745,322 and $0 paid. Separately, the criminal case describes reimbursement requests totaling $1,275,550. Those figures describe different aspects of the New York grant and reimbursement process and should not be treated as interchangeable.
New York State Comptroller Thomas DiNapoli’s office said Pearl Transit submitted three false invoices totaling $1,275,550 beginning in October 2024 for trips that investigators determined never occurred.
The state did not pay them.
As part of New York’s pre-payment auditing process, DiNapoli’s office examined Pearl Transit’s invoices, identified inconsistencies, and began demanding supporting documentation.
Instead of abandoning the claims, prosecutors proved that Watts and Pino-Copete manufactured more evidence.
Fake background-check company created
The indictment describes an unusually elaborate attempt to overcome the New York audit.
On Jan. 10, 2025, according to the indictment, Watts forwarded Pino-Copete an auditor’s request seeking driver’s licenses for people Pearl Transit claimed to have employed and applications from people the company claimed to have transported.
Four days later, prosecutors said Pino-Copete created a user account with TransUnion Risk and Alternative Data Solutions under a pre-existing Pearl Transit contract and used it to obtain individuals’ dates of birth.
Watts had also obtained driver’s license information.
On Jan. 15, she sent the Comptroller’s Office purported driver and passenger records using the identities, even though the people identified in the records had not worked for Pearl Transit or received rides from the organization, according to the indictment.
Auditors kept asking questions.
When they requested the name of the third-party company Pearl Transit supposedly used to verify driving records, prosecutors said the defendants created one.
According to the indictment, Watts told Pino-Copete she would make up both a report and a provider. Pino-Copete agreed to let her use his credit card to establish the operation.
Watts then used a third-party freelancer to create an internet domain, logo, and voicemail system for a fictitious company called Actual Check, prosecutors said.
On Feb. 12, 2025, Watts submitted four purported Actual Check motor-vehicle reports to the Comptroller’s Office.
The indictment says the company and reports were fake.
Colombian records allegedly altered
New York auditors still wanted more.
During a Feb. 18 call, they requested bank records showing Pearl Transit actually paid its supposed drivers and insurance records demonstrating coverage for vehicles used in the transportation program.
According to the indictment, Pino-Copete subsequently sent Watts a January 2025 Bancolombia bank statement from an account in his name and a Colombian insurance policy dating from 2015.
Prosecutors said Watts used those documents as source material to manufacture fake records.
The resulting records purported to show Pearl Transit paying New York drivers from a Bancolombia account and maintaining insurance on a Mercedes Sprinter van in Colombia.
According to the indictment, Watts submitted those records to New York auditors in March 2025.
The effort failed.
DiNapoli’s office brought the U.S. Department of Transportation Office of Inspector General into the investigation. DOT-OIG then referred the matter to federal prosecutors.
Investigation uncovered a nationwide operation
What began as scrutiny of a New York transportation reimbursement claim expanded into an investigation involving DOT-OIG, HUD-OIG, the New York State Comptroller’s Office and federal prosecutors.
Watts was arrested July 21, 2025, after initially being charged by criminal complaint with wire fraud.
A federal magistrate judge ordered her detained on Aug. 19, 2025. Watts challenged her detention, but the district court upheld it, and the U.S. Court of Appeals for the Second Circuit also rejected her challenge.
Watts eventually chose to represent herself, with the court appointing standby counsel. She unsuccessfully sought to separate her case from Pino-Copete’s and filed several requests for release and other relief before trial.
Searches of Watts’ cellphone and computer following her arrest helped investigators identify Pino-Copete’s involvement, according to DOJ.
The couple had married in Colombia in 2023. Prosecutors said Pino-Copete joined the fraud in January 2024.
He entered the United States in January 2025 using a visa issued the previous month. Prosecutors arrested him in New Jersey in December 2025 and detained him pending trial.
Fraud allegedly continued after Watts was jailed
Watts’ detention did not immediately stop the effort to obtain government money.
The third superseding indictment describes communications between Watts, while incarcerated at the Albany County Correctional Facility, and Pino-Copete concerning funding from San Bernardino, California.
On Sept. 16, 2025, prosecutors said Watts instructed Pino-Copete to conceal that she had been charged with wire fraud and jailed.
Pino-Copete then allegedly sent an email to San Bernardino pretending to be Watts and explaining her delayed response by falsely claiming an immediate family member had died.
Then, on Oct. 3, 2025, according to the indictment, Watts instructed Pino-Copete to digitally sign her name on a CDBG funding contract with San Bernardino. He did so and submitted it to the city.
The jury’s conspiracy conviction encompassed the scheme described in the third superseding indictment.
San Bernardino’s own planning documents show Pearl Transit was included in the city’s fiscal 2025-26 CDBG plans for a program involving 3-D-printed dentures, aligners, and bite guards for low-income or homeless people.
Dentures became another part of the scheme
Transportation was not the only service Pearl Transit marketed to local governments.
The organization also sought public funding for dental prostheses.
Pearl Transit told governments that it would provide free dentures to low-income and homeless clients. Applications elsewhere described a partnership with Oracle Dental Laboratories and mobile digital scanning intended to produce custom dentures.
A Marin County grant application, for example, described a program involving mobile oral scans, digital three-dimensional models and computer-aided manufacture of dentures. Pearl Transit claimed in that application that it had provided more than 7.5 million rides during 2023 and more than 4 million reduced- or no-fare rides. Those were Pearl Transit’s representations in its application, not independently verified service totals.
Trial evidence painted a radically different picture of the dental operation.
According to DOJ, Watts and Pino-Copete sought CDBG reimbursement by claiming to provide free dental prostheses to homeless people.
Prosecutors proved that dentures were instead being printed at the defendants’ home using what DOJ described as an unsanitary 3-D printer, while homeless clients were charged fees for mouth scanning and denture fittings.
DOJ said trial evidence included a video call in which Pino-Copete showed Watts cash he had obtained from a homeless dental client at a Maryland flea market while Watts was incarcerated.
Some local officials had raised concerns
A review of local-government records also shows that questions about Pearl Transit’s proposals arose outside New York before the federal convictions.
In Eastvale, California, city staff reviewing a proposed Pearl Transit dental and homeless-outreach program recommended against funding it. The proposal anticipated supplying at least 1,400 partial and 1,200 full dentures and serving approximately 2,300 people.
City staff wrote that key operational details had not been provided, specific questions went unanswered, and officials could not verify company information supporting certain representations.
That episode does not establish that Eastvale officials knew of the criminal fraud federal investigators later uncovered. It does show that at least one local-government review process had identified verification and operational concerns involving Pearl Transit.
More recently, McHenry County, Illinois, records show Pearl Transit sought $160,000 for an oral-health outreach program for low-income seniors. During a public presentation, commissioners questioned the organization about its existing local presence, relationship with Oracle Dental, and a proposed fringe-benefit expense amounting to 40% of payroll.
In Lewiston, Maine, a grant-review committee disqualified a Pearl Transit application after the organization failed to attend a scheduled presentation despite notice and follow-up contacts. Committee members raised concerns about preparedness, communication, outreach plans, and its relationship with Oracle Dental.
Again, those records should not be interpreted as evidence that those governments knew Pearl Transit was engaged in criminal activity. They show how the organization pursued public funding across numerous jurisdictions and how local review standards varied.
More than $1.6 million obtained
While New York stopped its payment, other jurisdictions had already disbursed substantial sums.
DOJ says the defendants obtained more than $1.6 million from federal programs administered through Georgia, California and North Carolina.
Federal prosecutors said a review of numerous bank accounts established that more than $1.5 million obtained from those jurisdictions was spent on the defendants’ lifestyle.
Trial evidence included more than $100,000 spent on Porsche rentals and another $100,000-plus at Loro Piana, the luxury Italian fashion company.
Prosecutors also documented extensive international travel during 2024, including Colombia, Aruba, and approximately four months in Europe.
Photographs introduced at trial showed the defendants at a Tuscan spa and touring a BMW manufacturing facility in Europe, according to the DOJ.
Pearl Transit reported millions in finances
Pearl Transit’s public nonprofit filings provide another unusual dimension to the case.
IRS Form 990 information compiled by ProPublica’s Nonprofit Explorer shows Pearl Transit, EIN 20-2022387, reported approximately $6.34 million in revenue for 2022, including about $5.41 million reported as contributions. It reported approximately $2.88 million in expenses and $14.15 million in net assets for that year.
The nonprofit database also lists subsequent filings. Those tax-return figures are Pearl Transit’s reported financial information and should not be interpreted as independently verified proof that the underlying contributions, assets, or program activity were legitimate.
The federal criminal case raises obvious questions about the accuracy and origin of Pearl Transit’s broader historical financial reporting, but DOJ’s Oct. 2 announcement does not state that every dollar the nonprofit reported was fraudulent.
Federal government suspended Pearl Transit
The Federal Transit Administration moved to bar the organization and its operators from federal transactions as the criminal case developed.
FTA suspended Pearl Transit and Watts from federal procurement and non-procurement transactions on Dec. 3, 2025.
Pino-Copete was suspended Feb. 17, 2026.
DOT-OIG said the New York vouchers involved in the investigation sought payments totaling $1,275,550.
The suspensions were administrative actions separate from the criminal prosecution.
Jury convicts both defendants
After a multi-week trial in Utica, jurors convicted Watts and Pino-Copete on all charges.
Watts was convicted of:
- one count of making a false statement;
- two counts of aggravated identity theft;
- five counts of wire fraud;
- one count of conspiracy to commit wire fraud; and
- one count involving use of a false document.
Pino-Copete was convicted of:
- one count of conspiracy to commit wire fraud;
- one count involving use of a false document; and
- one count of aggravated identity theft.
The third superseding indictment is United States v. Jael Watts and Luis Pino-Copete, Case No. 1:25-cr-00411-AJB, in the U.S. District Court for the Northern District of New York.
Assistant U.S. Attorneys Benjamin S. Clark, Joshua R. Rosenthal, and Michael J. Whalen prosecuted the case.
The investigation involved DOT-OIG, HUD-OIG and the New York State Comptroller’s Office. Earlier phases also involved the New Jersey Attorney General’s Office.
Sentencing set for January
U.S. District Judge Anthony J. Brindisi is currently scheduled to sentence Watts and Pino-Copete on Jan. 21, 2027.
DOJ says the defendants face a mandatory minimum sentence of two years in federal prison and statutory exposure of up to 20 years, along with fines of up to $250,000 and up to three years of supervised release. The judge will determine the actual sentences after considering the convictions, applicable statutes, federal sentencing guidelines, and other factors.
The defendants also face at least $1.9 million in restitution, prosecutors say.
Because Pino-Copete is not a U.S. citizen, DOJ says he also faces removal from the United States after completing any prison sentence.
The case has moved beyond the allegation stage: a jury convicted both defendants. Their sentences, restitution orders and any additional consequences, however, have not yet been finalized.
Case exposes weaknesses in pass-through funding
The Pearl Transit case illustrates a vulnerability inherent in federal pass-through funding.
Washington supplies billions of dollars through programs whose grants and reimbursements state agencies, counties, cities, and regional authorities administer. Those local administrators often confirm that nonprofit organizations and contractors actually provided the services for which they seek reimbursement.
In this case, prosecutors proved that Pearl Transit obtained more than $1.6 million from multiple jurisdictions before New York’s pre-payment review identified inconsistencies and demanded increasingly detailed documentation.
The New York audit did more than prevent another payment.
It became the entry point into a federal investigation that ultimately traced Pearl Transit’s activities across several states, examined electronic communications and bank accounts, exposed the use of stolen identities, and resulted in convictions after a federal jury trial.
And the difference between what happened in New York and what happened elsewhere may ultimately be one of the most consequential aspects of the case.
New York questioned the invoices before releasing the money.
Other jurisdictions had already paid.
The result was a fraud operation that prosecutors proved sought more than $13 million from programs established to serve elderly, disabled, low-income and homeless Americans — and successfully obtained more than $1.6 million before investigators shut it down.
Sources: U.S. Department of Justice Office of Public Affairs; U.S. Attorney’s Office for the Northern District of New York; third superseding indictment in United States v. Watts et al., No. 1:25-cr-00411-AJB; U.S. Department of Transportation Office of Inspector General; New York State Office of the State Comptroller; New York Open Book; federal court records; and public grant and planning records from state and local governments.
Editor’s note: A federal jury convicted Watts and Pino-Copete. Sentencing has not yet occurred, and the sentences ultimately imposed may differ from the statutory maximum penalties prosecutors describe.
