New Jersey Woman, Colombian Lover Convicted in $13 Million Federal Program Fraud Scheme

Note: View Indictment Here.

Jael Watts, 45, of Alloway, New Jersey, and Luis Pino-Copete, 42, of Bogota, Colombia, were convicted by a jury of orchestrating a sweeping nationwide scheme to steal millions of dollars in federal program funds administered by the U.S. Department of Transportation ("DOT") and the U.S. Department of Housing and Urban Development ("HUD"), designed to benefit elderly, disabled, and homeless Americans. First Assistant U.S. Attorney John A. Sarcone III, New York State Comptroller Thomas P. DiNapoli, Brian Gallagher, Special Agent-in-Charge, U.S. DOT - Office of Inspector General ("OIG"), Northeastern Region, and Shawn Rice, Special Agent-in-Charge, HUD-OIG, Northeast Region, made the announcement. This action is a part of the Trump Administration's Task Force to Eliminate Fraud.

As proven at trial, Watts and Pino-Copete operated a shell company called Pearl Transit Corporation, headquartered in New Jersey, which purported to employ drivers all over the United States who gave rides to the elderly and disabled and engaged in street outreach for homeless Americans. In reality, Pearl Transit employed no such drivers and performed no such services. Rather, over the time-period of July 2019 through October 2025, Watts devised and executed a scheme to defraud numerous state and local administrators of federal pass-through funds designed to help the needy, including the Federal Transit Administration ("FTA")'s Section 5310 Program and HUD's Community Development Block Grant ("CDBG") and Emergency Solutions Grant ("ESG"), some of which were funded during the COVID pandemic by the CARES Act, by submitting false employment and customer information using stolen identities of real people, purporting to establish that Pearl Transit had provided rides to the elderly, disabled, and homeless. Some of the individuals listed as Pearl Transit's recipients were deceased at the times they purportedly received rides from Pearl Transit, and some of the purported drivers were individuals who did not have driver licenses and have never driven a car in their life (one had a learner's permit at the time the defendants claimed she drove for Pearl Transit). Over the relevant period, the defendants sought reimbursement of over $13 million in federal funds through false claims and submissions. Proof at trial established that the defendants lived a lavish lifestyle off of the over $1.6 million in federal funds they fraudulently obtained as part of the scheme:

• $529,500 in CDBG funds from Gwinnett County, Georgia;
• $429,885 in Section 5310 funds from the Los Angeles County Metropolitan Transportation Authority;
• $283,000 in ESG funds from Kern County, California; and
• $379,149 in Section 5310 funds from the City of Raleigh, North Carolina.

Watts married Pino-Copete in Colombia in 2023, and Pino-Copete joined the fraud scheme shortly thereafter in January 2024. In January 2025, he entered the United States on a visa issued in December 2024, and his role in the crimes progressed after Watts was initially charged by complaint with wire fraud in connection with the scheme in July 2025. The defendants are pictured below conspiring to submit false documents in an effort to obtain $50,000 in federal funds from the City of San Bernadino, California while Watts was detained on the wire fraud complaint at the Albany County Correctional Facility in September 2025.

The investigation was spearheaded jointly by federal and state investigators. It began in late 2024 when Watts submitted claims for reimbursement of nearly $750,000 through the Section 5310 Program to the New York State DOT on behalf of Pearl Transit. The Office of the New York State Comptroller ("OSC") found the invoices suspicious and initiated an audit. In response to the audit, Watts and Pino-Copete generated numerous false documents using stolen identities of real people in an effort to convince New York State that Pearl Transit had actually performed the services it sought reimbursement for. OSC quickly brought in DOT-OIG, which swiftly referred the case to the U.S. Attorney's Office in 2025. The resulting joint federal and state investigation, joined by HUD-OIG, uncovered a multi-year nationwide scheme perpetrated by Watts to steal federal program funds perpetrated against administrators of these federal programs all over the country (including Georgia, North Carolina, California, and New York). Following Watts' arrest in July 2025 and the search of her cell phone and computer, investigators uncovered Pino-Copete's role in the crimes and he was initially charged for his role in the scheme in December 2025 and detained pending trial.

Searches of the defendants' cell phones uncovered scores of communications between the defendants about creating fake documentation to respond to OSC's audit requests. Watts declared, "one has to be committed to this type of work . . . and I am committed," and boasted, "they are not smart . . . we are much smarter." An exhaustive review of the defendants' numerous bank accounts showed that the over $1.5 million they fraudulently obtained just from Georgia, North Carolina, and California was spent entirely on a lavish lifestyle, including over $100,000 spent on Porsche rentals, over $100,000 spent at Loro Piana in Manhattan (an Italian luxury clothing brand where women's jackets can cost $9,500 and purses can cost $4,500), and a nearly year-long travel spree in 2024 that ranged from Colombia, to Aruba, and four months in Europe. Selfies the defendants took while spending fraud proceeds in Europe at a Tuscan spa and touring the BMW plant that were offered at trial are pictured below.

In another aspect of the scheme, the defendants sought CDBG reimbursements by claiming they provided free dental prostheses to homeless individuals. In reality, the defendants printed dentures at their home with an unsanitary 3-D printer and charged homeless individuals fees for scanning their mouths and fitting the dentures. Pino-Copete is pictured below showing off cash he obtained from a homeless dental client at a flea market in Maryland to Jael Watts on a video call while she was incarcerated at the Albany County Correctional Facility.

Following a multi-week jury trial in Utica, the jury found Watts and Pino-Copete guilty of all crimes charged in a third superseding indictment handed up earlier this month: Watts was convicted of one count of false statement, one count of aggravated identity theft, five counts of wire fraud; and Watts and Pino-Copete were convicted of one count of wire fraud conspiracy, one count of false document, and one count of aggravated identity theft.

At sentencing before U.S. District Judge Anthony J. Brindisi currently scheduled for January 21, 2027, Watts and Pino-Copete face a mandatory minimum of two years in prison, a maximum of twenty years in prison, fines of up to $250,000, and supervised release terms of up to three years. Watts and Pino-Copete also face a restitution order of at least $1.9 million. In addition, Pino-Copete, who is not a U.S. citizen, faces removal and deportation following completion of any term of imprisonment.

"These two defendants traded their Tuscan spa robes for his and hers orange jumpsuits," First Assistant U.S. Attorney Sarcone said. "I commend the hawkish work of OSC and our federal partners and thank my Assistant U.S. Attorneys for their tireless work in delivering these fraudsters justice. Had they been referred to state or local authorities for prosecution due to the irresponsible no bail laws here in NYS these two could have fled to Colombia."

"These convictions send a clear message that those who exploit federal programs for personal gain will be held fully accountable," said Assistant Attorney General Colin M. McDonald of the Department of Justice's National Fraud Enforcement Division. "The defendants fabricated payrolls and client lists, even using the identities of deceased individuals, to siphon millions meant for the most vulnerable Americans. I commend the U.S. Attorney's Office for the Northern District of New York and our federal and state partners for their relentless pursuit of justice in this case."

"When criminals use funds meant for our most vulnerable on lavish lifestyles, they must face the consequences," said Ronnie Kurtz, HUD Assistant Secretary for Community Planning and Development. "Fraudsters have been stealing funds from Georgia to California, but thanks to the work of the White House Task Force to Eliminate Fraud, we are standing up for taxpayer dollars and creating real accountability. At HUD, we are putting an end to the status quo to stop the fraud before it happens. If you receive even one tax dollar, we expect results."

New York State Comptroller Thomas P. DiNapoli stated, "Watts and Pino orchestrated a nationwide scheme to defraud the public. Thanks to the vigilance of my office and our work with our federal law enforcement partners, they will be held accountable for their crimes. I thank the United States Attorney's Office and federal Department of Transportation Inspector General's office for their partnership and excellent work allowing justice be served."

"Fraudsters who target federal transportation programs steal directly from the vulnerable communities these funds are meant to serve," said Brian C. Gallagher, Special Agent-in-Charge, Department of Transportation Office of Inspector General, Northeastern Region. "The convictions demonstrate that together with our law enforcement and prosecutorial partners we will move swiftly and decisively to protect taxpayer dollars and hold accountable anyone who attempts to exploit these critical transportation resources."

"Jael Watts and Luis Pino-Copete's selfish actions diverted more than $1.5 million in federal funds to support their lavish lifestyle while depriving elderly, disabled, and homeless Americans of resources intended to benefit them. Those entrusted with overseeing HUD funds have a responsibility to protect those resources and ensure they reach the vulnerable communities they were intended to serve," said Special Agent in Charge Shawn A. Rice with the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG). "This is not a victimless crime. Every dollar they stole could have been used to help vulnerable Americans. HUD OIG will continue to work with the U.S. Attorney's Office and our law enforcement partners to hold accountable those who abuse positions of trust and jeopardize critical federal programs."

DOT-OIG, HUD-OIG, and the OSC are investigating the case.

Assistant U.S. Attorneys Benjamin S. Clark, Joshua R. Rosenthal, and Michael J. Whalen are prosecuting the case.

On April 7, 2026, the Department of Justice announced the creation of the National Fraud Enforcement Division ('Fraud Division'). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.