A former New York University director of finance allegedly siphoned $3.5 million meant for minority and women-owned businesses and blew some of the cash on himself — including on an $80,000 pool for her Connecticut home, prosecutors said Monday.
Cindy Tappe, 57, was charged with diverting funds from the New York State Education Department grants into shell companies that she created over a six-year scheme that was discovered in 2018, when she left NYU, according to the Manhattan District Attorney’s Office.
Some of the embezzled money went to expenses related to the grants or employee reimbursement — but at least $660,000 ended up in Tappe’s own pockets, according to the indictment.
She apparently spent the dough on personal expenses, including the pool and renovations on her home in Westport, Connecticut.
The scam started with a $23 million grant awarded to NYU’s Metropolitan Center for Research on Equity and Transformation, where Tappe worked, with the cash meant to go to state programs to help special education students and those learning English.
A percentage of the funds was required to go to “certified minority and women owned business enterprises,” which would then administer the programs, prosecutors said.
Tappe reportedly arranged for three such subcontractors to receive some $3.5 million in grant money — and then created fake invoices for each of them on company letterheads. This allowed her to funnel much of the cash to the two shell companies she created, using them as her own personal slush fund, the DA’s Office said.
In September 2018, an NYU program director confronted Tappe about the payments being made to the supposed subcontractors.
In response, Tappe stated in an email that NYU 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,” prosecutors said.
The prestigious private university reported theft to the Dept. of Education, which alerted the state controller’s office. After carrying out its own investigation, the controller’s office referred the case to the DA’s office.
In a statement, Manhattan District Attorney Alvin Bragg pointed out that, “Instead of going to school districts in need, those funds were used by Tappe to pay her mortgage, build a swimming pool, and live beyond her means.”
“Our multilingual learners and students with disabilities deserve top-notch services, and these funds should have gone directly to their schools,” Bragg said.
New York State Comptroller Tom DiNapoli said, “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.”
Tappe appeared in Manhattan Supreme Court on Monday and pleaded not guilty to the slew of charges, including money laundering, grand larceny, offering a false instrument and falsifying business records.
She was released without bail.
Her attorney, Deborah Colson, declined to comment.