A former finance director at NYU was indicted this week for allegedly siphoning millions of dollars meant for minority- and women-owned businesses.
Cindy Tappe, 57, is accused of orchestrating the yearslong embezzlement scheme, relying on false invoices to divert more than $3 million in state education grants into her own shell companies. She used a portion of the money to fund her own lavish lifestyle, building an $80,000 swimming pool along with other investments in her Westport, Connecticut home, according to prosecutors.
In a statement on Monday, Manhattan District Attorney Alvin Bragg said the scheme “negatively impacted our city's minority- and women-owned business enterprises by denying them the chance to fairly compete for and secure the funding.”
Between 2012 and 2018, Tappe worked as the director of finance and administration at the university’s Metro Center, a component of NYU focused on “driving equity and access in public education.”
As part of her duties, Tappe was charged with administering a $23 million grant from the state’s Education Department meant to hire subcontractors to help English language learners and address disproportionality in special education.
She allegedly arranged for three companies – Rice Fowler & Associates, Ltd; Wei Wei & Co LLP; and PC Liu – to receive the “overwhelming majority” of contracts set aside under state law for certified women- and minority-owned businesses.
In reality, prosecutors said, the companies filed false invoices for nonexistent work, taking a small percentage as “overhead” while sending the remainder to shell companies created and managed by Tappe.
At least $3.4 million passed through the shell companies between 2012 and 2018, when the school eventually caught on to the fraud after implementing a new electronic payment system, according to an NYU spokesperson. Tappe left the university soon after.
“We are deeply disappointed that an employee abused the trust we placed in her in this way, and we are pleased to have been able to assist in stopping this misdirection of taxpayer money," NYU spokesperson John Beckman said in a statement.
The school initially flagged the case for the state comptroller's office, which conducted its own investigation before sharing its findings with the Manhattan DA.
Tappe pleaded not guilty on Monday to charges of money laundering, grand larceny, offering a false instrument for filing and falsifying business records.
An attorney for Tappe did not respond to a request for comment. Attempts to reach the subcontractors mentioned in the indictment were not successful.