California nun embezzled hundreds of thousands from the Catholic school where she was principal to support her gambling, prosecutors say

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California nun embezzled hundreds of thousands from the Catholic school where she was principal to support her gambling, prosecutors say
St. James Catholic School in Torrance on Monday, Dec. 3, 2018.Photo by Scott Varley/Digital First Media/ Torrance Daily Breeze via Getty Images
  • A nun ran an embezzlement scheme at the Catholic elementary school where she worked for ten years.
  • Now, two years after she retired as principal, she's agreed to plead guilty to fraud and money laundering.
  • Over the course of her scheme she caused losses equal to $835,339, according to the Justice Department.

A religious sister and Catholic school principal diverted school funds to bankroll her own personal expenses, including gambling trips to casinos and credit card charges, prosecutors allege.

Mary Margaret Kreuper, a retired nun who served as principal of a Catholic elementary school in Torrance, California, for 28 years, agreed on Tuesday to plead guilty to fraud and money laundering charges for stealing more than $835,000 from her place of employment to support her secular lifestyle, prosecutors said.

From 2008 to 2018, Kreuper embezzled money from St. James Catholic School, where, as principal, she was in charge of the money the school received from tuition and charity donations. According to the Justice Department, Kreuper had access to the school's savings account and a credit union account that paid living expenses for other nuns who worked at the school.

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In her plea agreement, Kreuper admitted to falsifying monthly and annual reports to the school's administration in order to cover up her embezzlement. She also "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 [her] to maintain her access and control of the school's finances and accounts and, thus, continue operating the fraudulent scheme."

Kreuper acknowledged that she used the diverted funds "to pay for expenses that the order would not have approved, much less paid for," including gambling expenses in Nevada.

Prosecutors have also accused Kreuper of directing school employees to change or destroy financial records during an audit of the school.

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Kreuper's lawyers told The Washington Post on Wednesday that she is "very remorseful" and "sorry for any harm she has caused."

"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," her attorneys told the outlet, adding that "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."

Kreuper was 18 years old when she became a nun and spent the next six decades in the church, according to The Post. She became principal at St. James Catholic School in 1990.

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After Kreuper retired in 2018, a financial review conducted by the school for the new principal revealed her schemes, The Los Angeles Times reported in 2018. The Archdiocese alerted authorities to their discovery soon after.

The sisters' order agreed to reimburse the school and impose "appropriate" penalties and sanctions against Kreuper, The LA Times reported.

Kreuper agreed to plead guilty to fraud and money laundering charges which carry a maximum statutory penalty of 40 years in federal prison, according to the Justice Department.

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She will next appear in court for an arraignment on July 1.

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