A former New York University finance director has been indicted for fraud.
The Manhattan district attorney’s office alleges Cindy Tappe diverted millions of dollars intended for minority- and women-owned businesses into shell companies she created — and then spent hundreds of thousands of dollars on personal and luxury expenses with the funds.
Tappe, a resident of Westport, Conn., was the director of finance and administration for NYU’s Metropolitan Center for Research on Equity and Transformation of Schools between 2012 and 2018.
Authorities say Tappe ultimately orchestrated over $3 million in fraud during that time.
Tappe is charged with one count of money laundering in the first degree, one count of grand larceny in the second degree, and two counts each of offering a false instrument for filing in the first degree and falsifying business records in the first degree.
“Our multilingual learners and students with disabilities deserve top-notch services, and these funds should have gone directly to their schools,” said Bragg. “Instead, we allege, the funds meant for student programs were used purely for personal gain by an NYU Director of Finance, who renovated a home in Connecticut and bought a swimming pool with the money.”
Authorities say the New York State Education Department awarded NYU $23 million for the Metro Center to administer, with the stipulation that a certain percentage of subcontractors on grant-related projects be awarded to certified minority- and women-owned businesses.
Tappe arranged for the vast majority of MWBE payments to go to three subcontractors, who NYU paid approximately $3.527 million, the indictment says.
The companies submitted fictitious invoices drafted by Tappe, and took between 3% and 6% of the invoice amounts as “overhead,” according to the indictment.
All the while, the companies performed “no work” on the contracts, authorities said.
“A portion of the funds were then used to pay legitimate grant-related expenses, and to reimburse NYU employees for expenses incurred or services rendered without any NYU oversight,” the Manhattan district attorney’s office said in a statement.
Authorities claim Tappe kept over $660,000 of the funds herself and spent it on renovations to her Connecticut home and an $80,000 swimming pool.
Tappe was confronted by an NYU program director in 2018 regarding payments being made to the MWBE subcontractors, according to the indictment. Afterwards, NYU reported the theft to the New York State Department of Education.
State DOE officials then informed the Comptroller’s Office of the allegations, and, after an investigation, the Comptroller’s Division of Investigations referred the case to the Manhattan D.A.’s Office for prosecution.
“Cindy Tappe used her high-ranking position at NYU to divert more than $660,000 in state funds to companies she controlled to fund a lavish lifestyle,” New York State Comptroller Thomas P. DiNapoli said. “I thank my Division of Investigations and the Manhattan District Attorney’s Office for their work uncovering her wrongdoing and making her answer in court.”
Tappe’s attorney didn’t immediately respond to request for comment Monday.