Nashua's HUD Grant Problem: Missing Liens, Fraudulent Time Charges, and a Mayor Who Didn't Ask Permission
Dear Public Integrity Unit:
I am writing to file an urgent formal complaint with the New Hampshire Attorney General's Public Integrity Unit concerning serious misconduct by officials of the City of Nashua's Community Development Department. The matters described herein involve the potential misuse of federal HUD grant funds, fraudulent charging of public employee time, failure to comply with federal grant lien requirements in connection with an imminent property transaction, retaliation against public employees who raised concerns, and the unauthorized execution of a public contract by the Mayor without required legislative approval.
A critical vote by the Nashua Board of Aldermen is scheduled for Wednesday, April 22, 2026, and the property closing is scheduled for April 30, 2026. I respectfully request that this complaint be treated as urgent and that the Attorney General's Office take immediate steps to protect the public interest before these actions are finalized.
I. PARTIES AND SUBJECTS OF THIS COMPLAINT
The following City of Nashua officials are implicated in the conduct described in this complaint:
1. Matt Sullivan – Director, Nashua Community Development Department. Responsible for overall oversight and management of HUD-funded programs, including lead abatement grants.
2. Michael Junger – Manager of HUD Programs, Nashua Community Development Department. Directly responsible for administration of HUD lead abatement grants and day-to-day program compliance.
3. Mayor James Donchess – Mayor of the City of Nashua. Signatory on a Purchase and Sales Agreement for 14 Mulberry Street executed without required Board of Aldermen approval.
4. Members of the Nashua Budget Committee – Voted in favor of the 14 Mulberry Street purchase on April 15, 2026, following a public hearing, potentially without full knowledge of the HUD compliance violations associated with the property.
II. MISUSE OF FEDERAL HUD LEAD ABATEMENT GRANT FUNDS – 14 MULBERRY STREET
The City of Nashua's Community Development Department administers HUD lead abatement grant funds subject to federal requirements, including a mandatory 3-year lien period during which grant-assisted properties may not be sold without triggering recapture obligations.
The property at 14 Mulberry Street, Nashua received a $75,000 HUD lead abatement grant, with work completed on or about May 5, 2024. In September 2024, the City filed a lead abatement certificate with the Hillsborough County Registry of Deeds. However, the City failed to file a HUD-required lien on the property. Without this lien, the 3-year federal recapture requirement was not properly recorded or enforced.
On March 28, 2026, less than two years after the lead abatement work was completed, and well within the mandatory 3-year compliance period, Mayor Donchess signed a Purchase and Sales Agreement to purchase 14 Mulberry Street on behalf of the City. The closing is scheduled for April 30, 2026. The sale of this property without a properly recorded HUD lien may constitute a violation of federal grant requirements and could expose the City to recapture liability.
I am further concerned that this failure to record required HUD liens may not be isolated to 14 Mulberry Street, and that other properties receiving lead abatement grant funding under Director Sullivan and Mr. Junger's administration may similarly lack required federal liens. This would represent a systemic compliance failure in the administration of federal grant funds.
III. FRAUDULENT CHARGING OF PUBLIC EMPLOYEE TIME TO FEDERAL GRANT FUNDS
It is my understanding that Michael Junger, during the period when the 14 Mulberry Street lead abatement project was active, charged his salary to the HUD lead abatement grant program while not performing work attributable to or required by that program. This practice reportedly continued for an extended period of time.
Fraudulently charging an employee's time to a federal grant program constitutes a misuse of federal funds and may violate RSA 641:3 (falsifying public records), RSA 638:1 (fraud), and applicable federal statutes governing the use of HUD Community Development Block Grant funds. I urge the Attorney General's Office to investigate the time and payroll records associated with Mr. Junger's charges to HUD-funded programs for the period 2023 to present.
IV. UNAUTHORIZED EXECUTION OF PUBLIC CONTRACT WITHOUT LEGISLATIVE APPROVAL
The Purchase and Sales Agreement for 14 Mulberry Street was signed by Mayor Donchess on March 28, 2026, without prior approval from the Nashua Board of Aldermen, as required by the City Charter and applicable law. The Board of Aldermen was not informed of this agreement under a week after the signature. A public hearing was held on April 15, 2026, after the contract had already been signed.
Furthermore, the Nashua Planning Board voted 3-2 against this purchase on April 14, 2026, explicitly citing the City's failure to conduct adequate due diligence and fiscal oversight. Despite this, the Budget Committee voted in favor following the public hearing on April 15, 2026.
A special Board of Aldermen meeting has been scheduled for April 22, 2026, to vote on the purchase. Public comment will not be permitted. It is my concern that the Board will vote without being informed of the HUD compliance violations associated with this property, and that the City intends to proceed to closing on April 30, 2026, regardless.
The execution of a significant public contract without legislative approval, and the apparent concealment of material compliance issues from the legislative body asked to ratify it, raise serious questions of public integrity and may constitute violations of RSA 47 (municipal powers) and RSA 91-A (Right-to-Know Law) obligations of transparency.
V. RETALIATION AGAINST PUBLIC EMPLOYEES
The Nashua Community Development Department has experienced severe and persistent employee turnover since 2021. The department, with approximately 16 employees, has lost a disproportionate number of staff, including most recently Ms. Rodriguez, the HUD intake specialist, who separated from the City approximately one month ago.
I have reason to believe that employees who identified and reported grant compliance discrepancies have been mistreated and subjected to retaliation by department management. Retaliation against public employees who report misconduct involving public funds may violate RSA 98-E (Public Employee Freedom of Expression) and implicate whistleblower protections under both state and federal law.
I respectfully request that the Attorney General's Office interview former and current department employees as part of any investigation into this matter.
VI. STEPS TAKEN TO DATE
On April 16, 2026, I filed a Right-to-Know request under RSA 91-A with Mayor Donchess, Director Sullivan, and Director Cummings to obtain records related to these matters and to formally place the City on notice. A copy of this request is attached.
I have also filed a concurrent complaint with the U.S. Department of Housing and Urban Development (HUD), Office of Community Planning and Development – Compliance Division, requesting expedited federal review.
VII. REQUESTED ACTION
In light of the urgency of this matter, I respectfully request that the Attorney General's Public Integrity Unit:
Immediately open an investigation into the misuse of HUD lead abatement grant funds administered by the Nashua Community Development Department for the period 2023 to present;
Investigate the fraudulent charging of Michael Junger's salary to HUD grant programs without corresponding program performance;
Investigate Mayor Donchess's execution of the 14 Mulberry Street Purchase and Sales Agreement without Board of Aldermen authorization;
Take immediate legal steps, if warranted, to delay or enjoin the April 30, 2026, closing on 14 Mulberry Street pending resolution of the HUD compliance issues associated with the property;
Notify the Nashua Board of Aldermen of this complaint prior to the April 22, 2026, special meeting so that its members may vote with full knowledge of the compliance and legal issues at stake;
Investigate the pattern of employee retaliation within the Community Development Department; and
Conduct a broader audit of all properties receiving HUD lead abatement grants under the City of Nashua's administration to determine whether required federal liens have been properly recorded.
I am fully prepared to cooperate with any investigation, provide additional documentation, and identify additional witnesses. The attached documents support the allegations set forth herein.
Thank you for your prompt attention to this urgent matter.
Respectfully submitted,
Laurie Ortolano
Nashua, New Hampshire
Attachments:
1. Nashua Community Development Department – Employee Turnover Spreadsheet
2. Nashua Community Development Department – Current Employees
3. Purchase and Sales Agreement – 14 Mulberry Street (signed by Mayor Donchess, March 28, 2026)
4. Screenshot – Hillsborough County Registry of Deeds (Lead Abatement Certificate; No HUD Lien on File, as of April 16, 2026)
5. Right-to-Know Request Filed April 16, 2026