Retired nun will plead guilty to stealing more than $835,000 from California Catholic school

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TORRANCE, Calif. (KTLA) – A retired nun who worked as a principal of a Catholic elementary school in California has agreed to plead guilty in connection with stealing more than $835,000 in school funds to pay for personal expenses, including gambling trips, federal officials announced Tuesday.

Mary Margaret Kreuper, 79, of Los Angeles, was charged with one count of wire fraud and one count of money laundering. She agreed to plead guilty to the two charges, which carry a maximum sentence of 40 years in federal prison, according to the U.S. Attorney’s office for the Central District of California.

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 had been responsible for charitable donations, 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.

Also implicated in the scheme was Lana Chang, who worked as a teacher at the school before becoming vice principal.

Both 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 sisters.

It is unclear if Chang was charged in connection with the investigation.

The Torrance Police Department, the FBI and IRS Criminal Investigation conducted the investigation into the allegations against Kreuper.

Kreuper is set to appear in court for arraignment on July 1.

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