RI City is Being Sued by U.S. for Selling Federal Apartments; Flipped for 1,800% Increase

RI City is Being Sued by U.S. for Selling Federal Apartments; Flipped for 1,800% Increase

The federal government is suing a Rhode Island city over the “illegal sale” of an apartment building that has flipped repeatedly. 

In the lawsuit, the U.S. Department of Housing and Urban Development (HUD) alleges that in 2019, Woonsocket illegally sold a residential property belonging to HUD -- on a city tax sale. 

The lawsuit involves players in Rhode Island and from around the country — including individuals who had previously led the defunct Domestic Bank. 

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The sale took place under Woonsocket Mayor Lisa Baldelli-Hunt’s leadership. And, her administration is not answering questions about the federal lawsuit.

 

1,800% Price Increase in Less Than 4 Years

In the 16-page complaint — along with over 60 pages of supporting documents, HUD asserts that a Woonsocket apartment house that was the U.S. government’s property was sold by the city in 2019 to a company linked to one of Rhode Island’s most noted bankers. The sale price by Woonsocket was just over $27,000 for unpaid real estate taxes.

The buyers — a company owned by Nathaniel and H. Jeffrey Baker — the former founder and CEO and former executive Vice President of the closed Domestic Bank — a bank that ran into series of federal regulatory issues.

Then, the Woonsocket property flipped and flipped again.

The most recent sale of the property, according to HUD, was for $525,000.

 

Allegations — and Players

According to the lawsuit, “The United States Department of Housing and Urban Development is an agency within the Executive Branch of the federal government and is the rightful owner of the property located at 294 Rhode Island Avenue [in] Woonsocket.”

HUD then delineates what they say was the unlawful sale and transfer of the property among multiple parties — all of whom are being named in the suit, in addition to the City of Woonsocket.

The lawsuit continues that defendant Tanya A. Mayumbo, who resides at the property at 294 Rhode Island Avenue, "purchased the Property from Jorge L. Jorge, for the sum of Five Hundred Twenty-Five Thousand and 00/100 Dollars ($525,000.00)."

 

 

 

 

 

 

Back in the Day, Prolific Political Donors

According to Rhode Island corporate database documents, the managers of Reservoir Partners, LLC are Nathaniel Baker of Florida, and H. Jeffrey Baker, based at the LLC address in Providence.

Campaign finance documents show that between 2002 — most recently, 2015 — “H. Jeffrey” Baker gave $2,750 in political contributions to Rhode Island candidates and officials; separate entries show “Jeffery H.” Baker gave $1,500 in campaign donations. 

Nathaniel Baker gave approximately $14,875 between 2002 and 2007 — with Domestic Bank. 

It was Nathaniel Baker, who as Founder and CEO of Domestic Bank in Rhode Island, entered into an agreement with the U.S. Treasury in 2008 which included an $850,000 fine and $1 million to fund financial-literacy and credit-counseling programs.

According to a July 15, 2008 Providence Journal article, federal regulators had “cited the Cranston-based financial institution for engaging in unsound mortgage-lending practices.” (This reporting took place before GoLocal’s launch in 2010.)

 

Federal Charges

In its lawsuit filed this week, HUD is suing the defendants on four counts:

Count One: Declaratory Judgment that Defendant City of Woonsocket’s Non-Judicial Sale of the Property Violated the United States Constitution and the Doctrine of Sovereign Immunity, and Therefore is Null and Void 

Count Two: Declaratory Judgment that the Providence Superior Court Lacked Subject Matter Jurisdiction to Divest HUD of the Property, and Therefore Its Orders are Null and Void 

Count Three: Trespass Against Defendants Reservoir Adventures, LLC, Jorge L. Jorge, and Tanya A. Mayumbo 

Count Four: Unjust Enrichment Against Defendants Reservoir Adventures, LLC, Jorge L. Jorge, and Tanya A. Mayumbo

HUD is seeking relief from the court to vacate the sale of the property. 

The City of Woonsocket's solicitor Michael J. Lepizzera, Jr. did not respond to questions at the time of publication.