Nun Admits To Embezzling $835K From St. James Elementary

LOS ANGELES, CA — A nun who used her position as principal of a Catholic elementary school to steal more than $835,000 in school funds to feed her gambling habit agreed to plead guilty in federal court, prosecutors announced Tuesday.

Sister Mary Margaret Kreuper, 79, of Los Angeles, will plead guilty to fraud and money laundering and faces up to 40 years in prison, the U.S. Department of Justice announced. Now retired, Kreuper had been the principal at St. James Elementary School in Torrance for 28 years. Prosecutors contend she forsook her vow of poverty and spent 10 years embezzling from the school from 2008 to 2018. She used the money to pay personal expenses, credit cards, gambling trips and casino debts, she admitted to prosecutors.

Her attorneys issued a statement saying that Kreuper, who they called Sister Mary Margaret, "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 fully with law enforcement and the Archdiocese."

According to defense attorneys Mark A. Byrne and Daniel V. Nixon, Kreuper became a nun when she was 18 years old, and for the next 59 years "dedicated her life to helping others and educating children in Archdiocesan schools. Unfortunately, later in her life she has been suffering from 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."

As principal, Kreuper was responsible for the money the school received to pay for tuition and fees, as well as for charitable donations. Kreuper controlled accounts at a credit union, including a savings account for the school and one established to pay the living expenses of the nuns employed by the school.

According to prosecutors, Kreuper diverted school funds into the St. James Convent Account and the St. James Savings Account and then, as she admitted in her plea agreement, used the diverted funds “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.”

She also admitted to falsifying monthly and annual reports to the school administration to cover up her fraudulent conduct, prosecutors said. The criminal information also alleges that Kreuper directed St. James School employees to alter and destroy financial records during a school audit.
Kreuper has agreed to appear in federal court in Los Angeles for arraignment on July 1.

City News Service contributed to this report.