A nun who worked as the principal of a Catholic elementary school in Torrance was sentenced to a year in prison after pleading guilty to stealing more than $835,000 in school funds to pay for personal expenses, officials announced Monday.
Mary Margaret Kreuper, 80, of Arlington Heights in Los Angeles, was also ordered to pay $825,338 in restitution, according to the U.S. Attorney’s Office for the Central District of California.
She had pleaded guilty to one count each of wire fraud and money laundering last July.
For a 10-year period until September 2018, Kreuper embezzled money from St. James Catholic School in Torrance, where she was principal for 28 years, officials said. The school is overseen by the St. James church in Redondo Beach.
She was responsible for charitable donations there, as well as funds the school received to pay for tuition and fees, officials said.
Kreuper also controlled accounts at a credit union, including a savings account for the school, and another account meant to pay the living expenses of the nuns employed at the school.
Officials said she diverted school funds into the convent account and the savings account and then used the diverted cash 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,” officials said.
Kreuper also admitted to falsifying monthly and annual reports to the school administration in an effort to cover up the embezzlement.
Officials said Kreuper “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.”
Additionally, she directed school employees to alter and destroy financial records during a school audit, according to the investigation.
Officials noted that Kreuper had taken a vow of poverty as a nun.
“On an annualized basis (approximately $83,000 per year), [Kreuper] stole the equivalent of the tuition of 14 different students per year,” prosecutors argued in a sentencing memorandum. “These funds were intended to further the students’ education, not fund [Kreuper’s] lifestyle.”
Prosecutors also noted that several students and parents had commented that the school was lacking in resources, while another parent said in a letter to the court that there was no money for an awning at the school or for field trips.
Initially implicated in the scheme was Lana Chang, who worked as a teacher at the school before becoming vice principal. Asked about her, a spokesman for the U.S. Attorney’s Office in Los Angeles said last year that only Kreuper was charged in the case, and the government considers the investigation closed.
Both women retired from the school in 2018.
The embezzlement was discovered after an internal investigation at the end of that year, but the church chose not to press criminal charges against the women.
The Torrance Police Department, the FBI and IRS Criminal Investigation conducted the investigation into the allegations against Kreuper.
