A former NYU finance director pleaded guilty to diverting around $3.3 million in state funds to fictitious companies and using some of the money — around $660,000 — to pay for personal expenses.
The director, Cindy Tappe, admitted to second-degree grand larceny for the six-year scheme, and will be sentenced to a five-year probation on April 16. Tappe is required to pay $663,209 in restitution prior to the start of her sentence.
Tappe ran the fraud from 2012 to 2018, when she was director of finance and administration at the NYU’s Metropolitan Center for Research on Equity and Transformation of Schools. Over about the same time, the Metro Center administered two state programs using $23 million from the New York State Education Department. The initiatives required that a certain percentage of subcontractors hired to support program activities be women and minority-owned businesses.
Tappe sent $3.5 million to three minority-owned and women-owned business subcontractors, who took between 3% to 6% of the funds and then sent the remaining money to two shell companies created by Tappe — High Galaxy Inc. and PCM Group Inc. The subcontractors also submitted fake invoices that Tappe drafted to explain the payments to the university.
A portion of the stolen funds was used to make NYU-related payments and reimburse employees, but over $660,000 was used for personal living expenses, such as renovations to Tappe’s house in Connecticut and an $80,000 swimming pool.
“Cindy Tappe took advantage of her position as the NYU director of finance and administration by diverting funds that were intended to benefit students for her own personal gain,” Manhattan District Attorney Alvin Bragg said in a public statement. “Her fraudulent actions not only threatened to affect the quality of education for students with disabilities and multilingual students, but denied our city’s minority and women owned business enterprises a chance to fairly compete for funding.”
Tappe’s fraud was discovered after an NYU program director confronted her about the subcontractor payments in September 2018. Tappe then falsely informed the head of the state programs that the university had “developed good working relationships” with her shell companies and that she had “found no other companies that offer the same suite of services for price.”
Following the confrontation, NYU’s internal audit office launched an investigation into Tappe’s “suspicious activity,” according to Beckman. Tappe left the university later that year after NYU reported her activities to the New York State Education Department. She was later hired at Yale University in 2019, where she served as the School of Medicine Operations Director.
“We are deeply disappointed that Ms. Tappe abused the trust we placed in her in this way; she stole from everyone — the taxpayer, the university, the people the Metro Center is supposed to help,” university spokesperson John Beckman said in a statement to WSN. “NYU is pleased to have been able to assist in stopping this misdirection of taxpayer money, and glad that the case has been brought to a close.”
In December 2022, Tappe received multiple felony charges, including grand larceny, money laundering and falsifying business records. Yale fired Tappe from her position following her official indictment. Tappe had initially pleaded not guilty to all charges in the indictment.
David Bloomfield, a professor of education leadership, law and policy at Brooklyn College and the City University of New York Graduate Center, said that Tappe’s sentencing is “relatively light” given that under New York state law, grand larceny can lead to up to 15 years in prison.
“The plea deal demonstrates lax safeguards against this gigantic six-year fraud wasting millions of taxpayer dollars and the relatively light sentences often attached to white-collar crimes,” Bloomfield said in a statement to WSN.
Counsel for Tappe did not respond to multiple requests for comment.
Contact Aashna Miharia and Maisie Zipfel at [email protected].
