Nun Sent to Prison for Embezzling Over $800,000 To Pay for Gambling Habit

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Sister Mary Margaret Kreuper of Los Angeles will serve one year, and one day, behind federal prison bars for fraud and money laundering charges. The disgraced nun stole hundreds of thousands of dollars while she was the principal at St. James Catholic School in Torrance, Calif. She used the money to pay for her gambling habit.

Prosecutors said Kreuper, 80, used the money to pay for gambling expenses such as casino trips and credit card charges made from 2008 until September 2018. She was instructed to pay $825,338.57 in restitution. Her order, the Sisters of St. Joseph of Carondelet, would have never approved the spending. Kreuper was the principal at the school for 28 years.

Kreuper apologized to the community during sentencing on Monday. She also pleaded to the judge to grant her leniency.

According to the LA Times, Kreuper said, “I have sinned, I have broken the law, and I have no excuses,” during her sentencing on Monday.

Assistant US Attorney Poonam Kumar told the Post that the rogue nun went on frequent gambling trips across Southern California and locations like Las Vegas and Lake Tahoe. Some fellow nuns even accompanied Kreuper on some of those trips, which resulted in thousands of dollars taken from the elementary school, Kumar said.

“One of the things she said when the LA Archdiocese first confronted her and even before law enforcement got involved was she did it in part because she believes priests get paid better than nuns,” said Kumar to The Post.

On top of their $6,000 tuition, Kreuper continued to ask parents to donate money to the school despite spending the funds on her gambling habit.

“This was really an abuse of position of trust, right,” said Kumar. “She was the principal. She was running the school that these parents had chosen to send their children [to], and not just for the academics. Many of the letters I cited … and many of the people who spoke talked about wanting something more from their children’s education.

“They wanted to get a Catholic education with the morals and values that they believed in and that they lead their lives in, and that’s what they were looking for in the school. So there were a considerable number of parents who were very upset and obviously feeling quite betrayed. Some parents spoke today about how their kids are no longer affiliated with the church.”

In July, Kreuper pleaded guilty to the charges. She also admitted falsifying monthly and annual reports to school administration and telling employees to cover up her embezzlements.

According to Kumar, school officials were unaware Kreuper was still using two old bank accounts to divert tuition checks and other funds. The diverted checks were cashed before they were accounted for by staff. Other checks were still appropriately deposited and accounted for. This allowed her activities to go unnoticed for so long.

“She basically was able to keep them secret and the school administration was never the wiser that there were these extra funds that she was taking,” Kumar told The Post.

Shortly after the nun announced she would be retiring as principal in 2018, the school performed an informal audit. The scheme was revealed after the nervous Kreuper told two employees to destroy documents and instructed them not to mention to auditors about the missing documents.

Kreuper was reported to the monsignor of the parish by the employees, said Kumar.

Prosecutors recommended a two-year sentence for the nun, but US District Judge Otis D. Wright II said during the sentence on Monday that he struggled to find the proper sentence for Kreuper saying she was “one heck of a teacher.”

“You can be proud of that,” Wright said, according to the LA Times. “But somewhere along the line, you just ran completely off the road, and I think you understand that. At least I hope you do.”

According to defense attorney Mark Byrne, Kreuper joined her order at the age of 18 and was an educator for 54 years. Byrne said some former St. James Catholic School Students wrote letters to the judge in support of thier former principal.

“We had a lot of letters from parents and students who knew about the fact that she had taken the money, and presumably the money was taken from them, and yet they found it in their hearts to forgive her,” Byrne said. “They did not necessarily overlook, but asked to judge her more by her entire life rather than the theft from by St. James (Catholic School). But Sister Mary said that she was extremely remorseful and humbled. She broke the law, she has no excuses for it and she took full responsibility.”

According to Byrne, the Order of the Sisters of St. Joseph of Carondelet already imposed “some severe and onerous” restrictions on Kreuper.

“She can’t leave the premises unless she’s given permission and she has to tell them where she’s going and she has to be accompanied by somebody,” the defense attorney told The Post. “Basically, for the last three and a half years, she’s been driving her fellow sisters to doctor’s appointments and things like that. So she’s basically under house arrest, which she accepts.”

Kreuper was released on personal recognizance bond but will have to turn herself in to the Federal Bureau of Prisons by June 7. After her release she will have two years of supervision Kumar said.



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