Written by Ashton Snyder on
 April 27, 2024

Former NYU Finance Director Receives Probation For Embezzling $3.5M From Minority Businesses

Cindy Tappe, previously in charge of finance at New York University, faced her sentence this week.

Tappe's five-year probation follows her involvement in a massive $3.5 million fraud against businesses owned by minorities and women, as the Daily Mail reports

Marisol Martinez Alonso, a judge in New York's Supreme Criminal Court, handed down the sentence after Tappe admitted to grand larceny charges earlier this year.

Financial Deceit Uncovered at NYU

The fraud involved siphoning off millions designated for educational programs. Tappe redirected these funds to her personal use, heavily renovating her Connecticut home among other expenses.

This misuse included $663,209 paid back in restitution by Tappe, with a significant $180,000 delivered just before her sentencing. The former director’s fraudulent transactions funded an $80,000 swimming pool and other luxury items.

Internal audits by NYU unveiled the misappropriations, tracing the illicit financial flow to two shell companies: High Galaxy and PCM Group. This discovery prompted the university to report Tappe to the authorities.

Long-term Scheme Affects Minority-Owned Enterprises

State grants intended to assist minority and women-owned businesses were diverted to cover NYU-related costs under Tappe’s direction. The grants were originally from the New York State Education Department, totaling $23 million between 2011 and 2018.

The detailed investigation revealed that the fraud began in 2012 and persisted until 2018. The diverted funds not only enriched Tappe but also involved kickbacks to three subcontractors who issued false invoices.

Upon detecting suspicious activities in 2018, NYU confronted Tappe, leading to her resignation. This case has also led to scrutiny at Yale University, where Tappe had begun a new role.

Responses from University and Legal Authorities

John Beckman, NYU spokesperson, expressed the institution's deep disappointment over the betrayal of trust. He emphasized NYU's role in uncovering the fraud and ending the misallocation of funds.

Manhattan District Attorney Alvin Bragg highlighted the broader impact of Tappe’s actions, emphasizing the lost opportunities for city’s minority and women-owned businesses. He condemned the diversion of funds meant for student programs to personal luxuries.

Looking Ahead: Prevention and Reflection

Deborah Colson, Tappe's defense attorney, stated that her client regrets her actions and is committed to making amends. Tappe hopes to move beyond this chapter after fulfilling her restitution obligations.

As Cindy Tappe starts her five-year probation, the repercussions of her actions continue to be felt across the educational and business communities. Her case serves as a reminder of the vigilance needed in managing public funds and the impact of fraud on real lives and opportunities.

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