Watts, 45, of Alloway, New Jersey, and Pino-Copete, 42, a Colombian national, were convicted of orchestrating a multi-year, multi-state fraud scheme that sought over $13 million in federal funds through a shell company called Pearl Transit Corporation, according to a press release from the U.S. Attorney’s Office for the Northern District of New York.
“These two defendants traded their Tuscan spa robes for his and hers orange jumpsuits,” First Assistant U.S. Attorney John A. Sarcone III said at the announcement.
How the scheme worked
Pearl Transit was incorporated as a nonprofit transportation company, allegedly employing drivers across the country to transport elderly and disabled passengers and conduct street outreach for homeless Americans.
According to the Department of Transportation (DOT) Office of Inspector General, the company applied for grant funding under the Federal Transit Administration’s Section 5310 Enhanced Mobility of Seniors and Individuals with Disabilities program — which provides funding targeting transportation services for elderly and disabled riders — and submitted fraudulent vouchers for reimbursement. In reality, Pearl Transit employed no drivers and provided no services.
To support the fraudulent claims, Watts and Pino-Copete used stolen identities of real people to fabricate payrolls and client records. Some people listed as having received rides from Pearl Transit were deceased. One purported driver had only a learner’s permit, and others had no license and had never driven a car.
What was stolen
The scheme targeted federal pass-through funds (money distributed to local governments or organizations via intermediaries like state governments) administered across multiple programs and states:
- $529,500 in Community Development Block Grant funds from Gwinnett County, Georgia
- $429,885 in Section 5310 funds from Los Angeles County
- $283,000 in Emergency Solutions Grant funds from Kern County, California
- $379,149 in Section 5310 funds from the City of Raleigh, North Carolina
Total funds fraudulently obtained exceeded $1.62 million.
And the fraud even extended to homeless dental care. The couple requested reimbursements by claiming they gave free dental prostheses to homeless people. But they actually 3-D printed dentures at home on an unsanitary printer and charged clients fees for fittings.
How it unraveled and continued
The investigation began in late 2024 when Watts submitted claims for almost $750,000 through the Section 5310 program to the New York State DOT.
When the Office of the New York State Comptroller (OSC) flagged suspicious invoices and initiated an audit, the defendants responded by generating more false documents using stolen identities — a move that accelerated their downfall as the OSC brought in the DOT Office of Inspector General, which referred the case to the U.S. Attorney’s Office.
