A New York state audit of nearly $750,000 in transportation reimbursement claims helped expose a nationwide fraud scheme in which two people sought more than $13 million and obtained more than $1.6 million from programs meant to serve older adults, people with disabilities and people experiencing homelessness, federal prosecutors said. A jury in Utica convicted Jael Watts of New Jersey and Luis Pino-Copete of Colombia after a multiweek trial, according to the U.S. Attorney's Office for the Northern District of New York.
The pair operated Pearl Transit Corp., a New Jersey-based company that claimed to employ drivers and provide transportation and homeless-outreach services across the country. Trial evidence showed it had no such drivers and provided no such services, prosecutors said.
Between July 2019 and October 2025, Watts submitted false payroll, customer and service records to state and local administrators of federal grants, according to the Justice Department. Some supposed riders had died before the reported trips; some listed drivers had never held driver's licenses. The records used stolen identities to support claims under Federal Transit Administration and U.S. Department of Housing and Urban Development programs.
State review uncovered false claims
The investigation began after Watts submitted nearly $750,000 in claims to the New York State Department of Transportation in late 2024 under a federal program for transportation services for older adults and people with disabilities. The state comptroller's office found the invoices suspicious and started an audit. Prosecutors said Watts and Pino-Copete then created more false documents to answer the auditors' questions.
The comptroller's office brought in the federal transportation inspector general, and the case was referred to prosecutors in 2025. HUD investigators joined the inquiry, which traced claims in Georgia, California, North Carolina and New York. The Justice Department did not say the disputed New York claims were paid.
Although the defendants sought more than $13 million, trial evidence showed they actually obtained more than $1.6 million. Prosecutors itemized $529,500 from a Georgia county community-development program, $429,885 from Los Angeles-area transportation funds, $283,000 from a California county homelessness grant and $379,149 from a North Carolina transportation program.
Prosecutors said bank records showed more than $100,000 spent on Porsche rentals and more than $100,000 at a luxury clothing store, along with extensive travel in 2024. They also described a separate effort to claim reimbursement for free dental prostheses for homeless people: instead, the defendants made dentures at home with a 3-D printer and charged clients for scanning and fitting, according to the trial account.
Jury verdict and sentencing
Watts was first charged in July 2025. Pino-Copete, whom prosecutors said joined the scheme in January 2024, was charged in December 2025 after investigators examined communications and devices. The pair were convicted after a trial in Utica, where the jury heard evidence of fabricated records and messages about responding to the New York audit.
The jury convicted Watts of a false statement, aggravated identity theft and five wire-fraud counts. Both defendants were convicted of wire-fraud conspiracy, a false-document count and aggravated identity theft, the Justice Department said.
Sentencing before U.S. District Judge Anthony Brindisi is scheduled for Jan. 21, 2027. Prosecutors said the convictions carry a mandatory minimum of two years and a maximum of 20 years in prison, potential fines of up to $250,000 and supervised release of up to three years. They said restitution could total at least $1.9 million. Pino-Copete also faces possible removal from the United States after any prison term.
New York State Comptroller Thomas DiNapoli credited his office's audit and the work of federal investigators for uncovering the scheme. The transportation and housing inspectors general and the comptroller's office investigated the case.
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