The woman appeared on stage at Monday's 9th annual Andy Kaufman Awards ceremony at the Gotham Comedy Club and claimed she is the performance artist's 24-year-old daughter.
She said she only recently learned who Andy really was and that he faked his death nearly 30 years to get out of the spotlight, then fell in love with a wonderful woman and became a stay-at-home dad.
Michael Kaufman, the emcee of the event, said he discovered a letter from Andy years ago detailing his plans to get out of show business by pretending to die of cancer at the age of 35.
Michael was seen hugging the young woman at Monday's ceremony after she told him she was the niece he never knew he had.
However, Michael told CNN Thursday he believes the woman duped him.
"Now that it's Thursday, not Monday anymore, I believe I am part of a hoax," Michael said.
"I don't believe she's acting on her own, though," he added. "But, you know, that's all I know."
Michael was asked again during the interview if he really thinks the woman's claims were part of a hoax.
"Correct," he said, denying he was part of the scheme.
The Smoking Gun news website reported the woman is Alexandra Tatarsky, an actress Michael recruited to pose as his niece.
"That is not true," Michael told CNN.
Asked if he is angry because the woman allegedly lied to him, he said: "I'm still processing it. As Andy's brother, you learn over the years, you know, to go with the flow, kind of. So I have mixed emotions. I never allowed myself to get too excited, but I was always slightly skeptical."
The comedian and former "Taxi" co-star was well-known for his elaborate and discomfort-inducing pranks, leading many of his fans to wonder if his death was real.
But the Los Angeles County Coroner weighed in on the story Thursday, releasing a statement saying in no uncertain terms, "Andy Kaufman is dead."