Catholic nun admits to stealing $835,000

Defendant said she siphoned school funds to pay for gambling expenses

A nun and former principal of a Catholic school in Torrance has agreed to plead guilty to embezzling $835,000 in tuition and charitable donations to pay for her gambling habit and other expenses, prosecutors announced Tuesday.

Mary Margaret Kreuper, 79, of Los Angeles, faces one count each of felony wire fraud and money laundering, U.S. Attorney’s Office officials said in a news release. She is expected to plead guilty during her arraignment on July 1, according to a plea agreement between her and federal prosecutors filed Tuesday.

The defendant served as the principal of St. James Catholic School for 28 years, and admitted diverting some of the school’s money between 2008 and 2018 into accounts she controlled, prosecutors said. Despite swearing a vow of poverty, she admitted using what she embezzled to pay bills racked up while gambling at casinos, as well as other expenses. She went on to falsify reports to administrators in order to conceal the misuse of funds, prose

cutors said.

“The community of faith at St. James was shocked was saddened by these actions,” Archdiocese of Los Angeles spokesman Adrian Alarcon wrote in an emailed statement.

Church officials learned about the stolen money in 2018, as the result of a financial review performed after Kreuper retired. They were initially hesitant in pursuing criminal charges against her and another

nun, Lana Chang, who admitted wrongdoing and expressed remorse for the embezzlement scheme in internal documents after it was discovered.

However, the Archdiocese reversed course in light of outrage from parishioners.

No charges had been filed against Chang as of Tuesday. Investigation into the matter has concluded, said Ciaran McEvoy, a spokesman for the U.S. Attorney’s office.

Kreuper faced a maximum sentence of 40 years in prison and restitution of up to $1.67 million for the

two charges she is expected to plead guilty to.

The actual punishment she receives will be up to a judge’s discretion, and could range anywhere from probation to the maximum penalty. However, the plea agreement contemplates a sentence of three years, said Thom Mrozek, another spokesman for the U.S. Attorney’s Office.

The attorneys representing Kreuper, Mark Byrne and Daniel Nixon, who called her Sister Mary Margaret, said she is “very remorseful for what happened,” and has been completely cooperative with law enforcement and the archdiocese after the embezzlement came to light.

“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,” Kreuper’s attorneys wrote. “Unfortunately, later in her life she has been suffering from a mental illness that clouded her judgement and caused her to do something that she otherwise would not have done.”

They declined to go into further detail about any illness their client may have been diagnosed with.