Church won’t prosecute nuns who stole $500K to gamble

An old check allegedly exposed decades of lies.

For nearly 28 years, Sister Mary Margaret Kreuper was the principal at St. James Catholic School, an elementary school in Torrance, California, a coastal suburb southwest of Los Angeles. Around the same time when Kreuper announced she was retiring earlier this year, a family at the school asked for a copy of an old check it had written to St. James. When staff members found the check, the Long Beach Press-Telegram reported, they realized it had not been deposited in St. James’ account but a different bank account.

That was among the first clues that would unravel a vast fraud allegedly conducted by Kreuper and Sister Lana Chang, another nun and longtime St. James teacher. School officials recently told parents the two nuns stole around $500,000 from the school. The school said the two women, reportedly best friends, used the pilfered funds on trips and casino visits.

“We do know that they had a pattern of going on trips, we do know they had a pattern of going to casinos, and the reality is, they used the account as their personal account,” Marge Graf, an attorney representing St. James, told a group of parents at a meeting Dec. 3, according to the Beach Reporter.

The revelations came as a shock to parents and church members, who were not only operating under the impression that St. James was struggling to stay afloat in fiscally troubled waters, but also dealing with the aftershocks of tragedy. In 2014, four people were killed — including a 6-year-old boy — when an intoxicated woman plowed into a crowd of people leaving a Christmas concert at St. James, according to the Los Angeles Times.

The complex feelings working through the church are compounded by the archdiocese’s refusal to pursue criminal charges against the nuns, the Press-Telegram reported.

“We were an ATM, and people know it and they won’t ask for justice,” Jack Alexander, a parent at St. James, told the Southern California News Group.

While Kreuper worked as the school’s principal, Chang was an eighth-grade teacher. (She also retired this year.) Both women were members of the Sisters of St. Joseph of Carondelet order.

According to what Monsignor Michael Meyers explained to parents Dec. 3 at the meeting, the church launched an independent financial investigation after the oddity regarding the old check was discovered. The review determined that Kreuper and Chang had been committing the alleged fraud for at least 10 years.

An old unused bank account belonging to the church was the key to the alleged misconduct, Meyers explained.

The account was opened in 1997 but not used in years. Kreuper would divert checks made out to the school for tuition and fees into this forgotten account. She allegedly endorsed the checks with a stamp saying, “St. James Convent,” not “St. James School.” The two nuns then tapped the funds for their personal use, Meyers said.

Parents told the Press-Telegram they knew the two nuns went on gambling trips, but the nuns explained the jaunts were gifts from a rich uncle.

“These nuns took a vow of poverty and said, ‘Oh, no, we’ve got a rich uncle,’” Alexander told the paper. “The rich uncle was the parents of the St. James students.”

When confronted about the missing money, Meyers said the nuns admitted what they had done.

“Sister Mary Margaret and Sister Lana have expressed to me and asked that I convey to you, the deep remorse they each feel for their actions and ask for your forgiveness and prayers,” Meyers wrote in a letter to the parents and parishioners, Fox 6 reported. “They and their Order pray that you have not lost trust or faith in the educators and administrators of the school.”

The order also confirmed their members had been caught in the alleged fraud. “The Sisters have confirmed the misappropriation of funds and have cooperated in the investigation,” the order said in a statement. The sisters have not publicly commented on the missing funds themselves.

“I will honestly say that it’s not shocking to me,” an anonymous parent told Los Angeles’ Fox 6. “There have been a couple of projects that we have been trying to get funded for many years that we have unfortunately been unable to move forward with because of the lack of funding.”

But there remains a question about whether Kreuper and Chang will face legal consequences. Because the order is willing to repay the lost funds, the archdiocese has decided not to pursue criminal charges against the pair.

“We have initiated additional procedures and oversight policies for financial management and reporting responsibilities,” Meyers told parishioners, according to ABC 7. “No student or program at St. James has suffered any loss of educational resources, opportunities, or innovations.”

But the outcome of the alleged fraud apparently has split the church and school. Some parents at St. James are planning to see if they can band together to pursue criminal charges on their own.

Others, however, have suggested the two nuns have already been judged too harshly.