Ex-Nun Pleads Guilty to Embezzling Over $835,000 From School to Support Gambling Habit

LOS ANGELES (CN) — For nearly 30 years, Sister Mary Margaret Kreuper served as principal at St. James Catholic School in Torrance, California, where she oversaw the elementary school’s finances. On Tuesday, the now-retired nun pleaded guilty to stealing more than $835,000 in school funds to pay for gambling trips to Las Vegas and other expenses.

In a plea agreement filed in federal court in LA, Kreuper, 79, acknowledged she stole money from the school starting in 2008. For the next decade, Kreuper siphoned money from the school and, instead of depositing students' tuition into an account that would pay for school fees and hold charitable donations, she deposited the money into separate accounts for the convent. She then used the money “to pay for expenses that the order would not have approved, much less paid for, including large gambling expenses incurred at casinos and certain credit card charges," prosecutors said.

As the school’s bookkeeper, Kreuper oversaw the school’s monthly and annual reports to the school administration. But she faked those reports and “lulled St. James School and the administration into believing that the school’s finances were being properly accounted for and its financial assets properly safeguarded, which, in turn, allowed defendant Kreuper to maintain her access and control of the school’s finances and accounts and, thus, continue operating the fraudulent scheme.”

In March 2017, Kreuper deposited over $5,700 in checks made out to the school into the convent bank account, which the law considers wire fraud. A month later, Kreuper withdrew approximately $6,000 from the convent account in a check that was then deposited into a bank account of a person who then cashed the check and gave the money to Kreuper so she could gamble in Nevada. The account holder is referred to as Individual No. 1 in court records.

Defense attorney Mark Byrne of the firm Byrne & Nixon said Kreuper is “very remorseful for what happened.”

“As soon as she was confronted, she accepted full responsibility for what she had done and she has cooperated completely with law enforcement and the archdiocese,” Byrne said in the statement. “She became a nun when she was 18 years old, and for the next 59 years she dedicated her life to helping others and educating children in archdiocesan schools. Unfortunately, later in her life she has been suffering from a mental illness that clouded her judgment and caused her to do something that she otherwise would not have done. She is very sorry for any harm she has caused.”

The Archdiocese of Los Angeles initially notified authorities of the mishandling of school funds in 2018 during a change in leadership.

"The community of faith at St. James was shocked and saddened by these actions and the parish, school and the archdiocese reported the matter and fully cooperated with authorities in the criminal investigation," the archdiocese said in a statement. "The archdiocese and St. James Parish and School are grateful to local and federal law enforcement agencies for their work in the investigation of this matter. We continue to offer our prayers for all impacted by this matter."

Kreuper will appear before a federal judge for arraignment July 1. She pleaded guilty to one count each of wire fraud and money laundering — charges that carry a maximum prison sentence of 40 years.

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