Federal authorities are investigating whether the captain of a boat that capsized near the Statue of Liberty, killing a mother and her five-month-old girl, was running an illegal charter business.

Manuel Hernandez, 46, previously faced 13 state charges of reckless endangerment after Sara Sanchez, 27, and her daughter, five-month-old Antonella Garcia, were killed when the boat flipped in New York Harbor at around 10.30pm on Saturday.

The boat captain had allegedly been operating the 21-foot white Yamaha AR210 while it was dangerously overloaded with 14 people onboard, the New York Police Department said.

Hernandez was transferred to federal custody on Sunday after being treated at a Brooklyn hospital for minor injuries, sources told the New York Post.

His state-level criminal charges are no longer being pursued as a federal investigation into the boat captain moves forward, with new charges expected to be announced as early as Monday.

The federal investigation is centered on whether the 21-foot vessel was carrying more people than allowed and whether Hernandez was running a passenger-for-hire business without proper US Coast Guard credentials, safety equipment or a certificate of inspection.

Captain Doreen McCarthy, of the Coast Guard’s New York Sector, said in a statement: ‘We are committed to holding illegal operators accountable to [the] highest extent of the law to ensure the safety of everyone on our waterways.’

‘We are deeply saddened by the tragic loss of life last night and our thoughts are with the victims’ family and loved ones during this incredibly difficult time,’ McCarthy added.

Zeus Luxury, from which the bowrider Hernandez captained was reportedly chartered, is described online as ‘one of the leading companies in limousine, party bus and yacht rentals in the tri-state area.’

The Daily Mail has reached out to the company for comment.

A source previously told the Post that the boat, with a typical capacity of around ten people, should not have had more than five passengers on board.

‘Recreational boating in New York Harbor is the Wild West,’ the source told the outlet. ‘Uncharted debris, rip rap, bridge abutments, anchorage chains, commercial shipping channels, marine plane traffic.’

Sara Raez, who was on the vessel, told the Post that the group had chartered the boat from Zeus Luxury for her mother Paula Rivera’s surprise 41st birthday party.

Family and friends boarded the boat, which Raez described as ‘kind of like a yacht,’ at around 7pm, passed by the Statue of Liberty and were heading back to shore when tragedy struck.

‘The water got into the boat,’ Raez recounted. ‘The boat went up, and when it went down, it was, in seconds, it flipped over.’

All of the passengers were then left stuck underneath the vessel, she said, before crews rescued them and pulled them from the water.

‘We were just trying to get out. Then, when finally everyone got out, everyone was screaming,’ Raez added.

Sanchez and her five-month-old daughter were airlifted to NYU Langone Hospital in Brooklyn in critical condition but were later pronounced dead.

A dozen others were also taken to a local hospital with minor injuries.

Sanchez and her daughter are survived by their husband and father, Andres, who was also onboard the boat Saturday night and survived, as well as the couple’s other son.

‘He lost his wife and daughter. It’s very sad,’ an employee at the restaurant where Andres works as a waiter, Il Punto Ristorante, told the Daily Mail.

Antonio Russo, a manager at the Italian eatery, also told W42St that Andres had been working there for five years, describing him as a ‘very hardworking guy.’

The couple had just recently welcomed their baby girl, sharing a video at the end of January showing Sanchez’s pregnant belly covered with lavender butterflies and sparkles.

‘We love you Antonella,’ it read.

As Andres now works to rebuild his life with his six-year-old son, Salvador, his employers have created a GoFundMe to cover funeral expenses, daily living expenses, Andres’s time away from work and ‘the many unexpected costs that come with a tragedy of this magnitude,’ the fundraiser page said.

‘This past weekend, what was meant to be a joyful family outing ended in an unimaginable tragedy when a boat carrying Andres and his family capsized,’ Il Punto Ristorante posted to Facebook as it shared the GoFundMe.

‘Our hearts are with Andres and his family as they navigate this tremendous loss. We ask our Il Punto community to please keep them in your thoughts and prayers during this incredibly difficult time.’