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Ex-N.Y.U. schools equity finance chief pleads guilty to $3.5 million fraud

Manhattan District Attorney Alvin Bragg Jr. and New York State Comptroller Thomas DiNapoli last month announced the guilty plea of Cindy Tappe, 57, for orchestrating a roughly $3.5 million six-year fraud relating to two New York University programs.

Tappe used her position as the director of finance and administration for N.Y.U.’s Metropolitan Center for Research on Equity and Transformation of Schools a.k.a. the “Metro Center” to divert around $3.5 million intended for minority- and women-owned businesses. She ultimately routed $3.3 million to bank accounts held by two shell companies Tappe created, using some of the funds for N.Y.U. payments and employee reimbursements, but keeping more than $660,000 to pay for personal expenses, including renovations to her home in Connecticut and an $80,000 swimming pool.

Tappe, currently a resident of tony Westport, Connecticut, pleaded guilty to one count of grand larceny in the second degree. Under the terms of the plea, she will be sentenced to five years’ probation, sign a written waiver of right to appeal, and provide full restitution in the amount of $663,209.07 in advance of sentencing. She will be sentenced on April 16.

“Cindy Tappe took advantage of her position as the N.Y.U. director of finance and administration by diverting funds that were intended to benefit students for her own personal gain,” Bragg said. “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.”

“Cindy Tappe shamelessly used her high-ranking position at N.Y.U. to steal more than $660,000 in state funds,” DiNapoli said. “Her actions cheated MWBEs out of critical funding opportunities and deprived student programs of key resources meant to aid children with special needs and young English Language Learners.”

According to court documents, statements made on the record in court, and as admitted in the defendant’s guilty plea, between 2011 and 2018, the New York State Education Department awarded N.Y.U. $23 million for the Metro Center to administer two New York State programs: the Regional Bilingual Education Resource Network (“RBE-RN”), which helps school districts improve results for English Language Learners, and the Technical Assistance Center on Disproportionality (“TAC-D”), which addresses disproportionality in special education. The RBE-RN and TAC-D agreements required that a certain percentage of subcontractors on grant-related projects be awarded to certified minority- and women-owned business enterprises (MWBE), in accordance with state law.

Between February 2012 and December 2018, Tappe was the director of finance and administration for Metro Center. She arranged for three certified MWBE subcontractors to receive the overwhelming majority of MWBE payments. In total, N.Y.U. paid the three companies around $3.527 million to provide services related to the grants. To justify the payments, the companies submitted fictitious invoices drafted by Tappe and pasted on their letterhead.

None of the companies performed work on the contracts. Instead, they functioned as pass-throughs, taking between 3 percent and 6 percent of the invoice amounts as “overhead,” and sending the remainder of $3.352 million to two fictitious shell companies created by Tappe: High Galaxy Inc. and PCM Group Inc. A portion of the funds were then used to pay legitimate grant-related expenses, and to reimburse N.Y.U. employees for expenses incurred or services rendered without any N.Y.U. oversight.

Moreover, Tappe used the High Galaxy and PCM accounts to steal at least $660,000, by using that money to pay her personal expenses. She used the accounts to pay for home renovations — including a new $80,000 swimming pool — and her ordinary living expenses.

In September 2018, an N.Y.U. program director confronted Tappe about the payments being made to the MWBE subcontractors. In response, she e-mailed the head of the RBE-RN and TAC-D programs explaining the role those companies played — without mentioning High Galaxy, PCM or her relationship with the MWBE subcontractors. Instead, she falsely stated that N.Y.U. had “developed good working relationships with these companies,” and that she had “found no other companies that offer the same suite of services for price.”

Soon thereafter, N.Y.U. reported the theft to the New York State Department of Education, which relayed the allegations to the Comptroller’s Office. After conducting an investigation, the Comptroller’s Division of Investigations referred the case to the Manhattan D.A.’s Office for prosecution.

After N.Y.U. leadership confronted Tappe in 2018 about the embezzled funds, she left the school. Yet, in 2019, she somehow was able to land a job as the administrator of Yale School of Medicine. A university spokesperson told the Yale News that Tappe “underwent pre-employment screening, including reference and background checks.” Yale fired her last December three days after a series of charges against her — also including money laundering and falsifying business records — became public.

In a statement, N.Y.U. spokesperson John Beckman said the university is “deeply disappointed” by Tappe and glad the four-year-long investigation has been resolved.

“After detecting suspicious activity by Ms. Tappe,” he said, “N.Y.U. had its Internal Audit Office investigate further. N.Y.U. immediately furnished the findings to the State Department of Education and the State Controller’s Office, and has cooperated fully with investigators.

“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. N.Y.U. 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.”

One Comment

  1. Alan Jules Weberman Alan Jules Weberman March 21, 2024

    She got off too easy. The Feds should have hit her with money laundering charges. Probation – what a joke.

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