Weekly Real Estate News
A federal jury has convicted two defendants in a nationwide fraud scheme that sought more than $13 million from federal programs, including housing funds intended to assist homeless and vulnerable Americans.
The U.S. Attorney’s Office for the Northern District of New York announced the verdict Oct. 2 against Jael Watts, 45, of Alloway, New Jersey, and Luis Pino-Copete, 42, of Bogotá, Colombia.
The $13 million figure represents reimbursements the defendants sought through false claims and submissions—not the amount they actually received. Evidence at trial established that the scheme obtained more than $1.6 million in federal funds. The defendants face restitution of at least $1.9 million, according to the Justice Department.
HUD programs were among the targets
Prosecutors proved at trial that Watts operated Pearl Transit Corporation as a shell company that claimed to employ drivers providing transportation to elderly and disabled people and street outreach to homeless Americans. The company performed no such services, the government said.
From July 2019 through October 2025, false claims targeted programs including HUD’s Community Development Block Grant and Emergency Solutions Grant programs as well as the Federal Transit Administration’s Section 5310 program. Some claims used stolen identities of real people as purported employees or clients.
The government documented $529,500 in CDBG funds obtained from Gwinnett County, Georgia; $283,000 in ESG funds from Kern County, California; $429,885 in transit funds from Los Angeles County; and $379,149 in transit funds from Raleigh, North Carolina.
Following a multi-week trial, the jury convicted Watts of false statement, aggravated identity theft and five wire-fraud counts. Watts and Pino-Copete were also convicted of wire-fraud conspiracy, false document and aggravated identity theft charges.
Sentencing before U.S. District Judge Anthony J. Brindisi is scheduled for Jan. 21, 2027. The defendants face a mandatory minimum two-year term associated with aggravated identity theft and maximum penalties that include up to 20 years on certain charges; the court will determine the actual sentences.
For housing agencies, the case is a reminder that fraud against pass-through federal housing programs can occur far from the agencies that originally appropriate the money. Local administrators remain a critical control point for verifying vendors, services, clients and reimbursement claims.
