New York State Comptroller Thomas DiNapoli announced a significant breakthrough in a major fraud case involving Cindy Tappe, the former Director of Finance and Administration for New York University's Metropolitan Center for Research on Equity and Transformation of Schools (Metro Center). Tappe, 57, has pleaded guilty to orchestrating an approximately $3.5 million fraud over six years.
The case revolves around Tappe's misuse of her position, diverting funds for minority and women-owned businesses. Specifically, Tappe rerouted approximately $3.3 million to two shell companies she created, using a portion for NYU payments and employee reimbursements while pocketing over $660,000 for personal expenses. These personal expenditures included renovations to her Connecticut home and an $80,000 swimming pool.
Tappe pleaded guilty to one count of Grand Larceny in the Second Degree and will face five years of probation as part of the plea agreement. Additionally, she will sign a written waiver of her right to appeal and provide full restitution of $663,209.07 ahead of her April 16, 2024 sentencing.
Comptroller Thomas P. DiNapoli condemned Tappe's actions, emphasizing the impact on minority and women-owned businesses and student programs.
Between 2011 and 2018, NYU received $23 million from the New York State Education Department for the Metro Center to administer two programs: the Regional Bilingual Education Resource Network (RBE-RN) and the Technical Assistance Center on Disproportionality (TAC-D). Both programs aimed to improve outcomes for English language learners and address disproportionality in special education, with a requirement to allocate a percentage of subcontractors to certified MWBEs.
As the Director of Finance and Administration for Metro Center from February 2012 to December 2018, Tappe manipulated the system. She facilitated payments of approximately $3.527 million to three certified MWBE subcontractors for services related to the grants. However, with Tappe's coordination, these companies submitted fictitious invoices to justify the payments. None of them performed the required work, serving merely as pass-throughs. The majority of the funds, $3.352 million, were then sent to two fictitious shell companies created by Tappe: High Galaxy Inc. and PCM Group Inc.
Apart from covering legitimate grant-related expenses, Tappe misappropriated funds for personal use, including home renovations and an $80,000 swimming pool. When confronted in 2018, she misled NYU about the companies' role, prompting the university to report the theft to the New York State Department of Education.
The case, initiated by the Comptroller's Division of Investigations, underscores the collaborative efforts to hold Tappe accountable for her fraudulent actions that compromised educational programs and opportunities for MWBEs.