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Nun nabbed for embezzlement Spent $835,000 on gambling

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Mary Margaret Kreuper — Photo courtesy of St. James Catholic School
Mary Margaret Kreuper — Photo courtesy of St. James Catholic School

Still trying to cope with charges of child abuse going back to the 1930s, the Roman Catholic Archdiocese of Los Angeles was rocked by a new scandal when the federal Department of Justice announced it was charging a nun with embezzlement.

According to federal investigators, Sister Mary Margaret Kreuper — now 79 and retired — stole $835,000 from a Catholic elementary school where she was principal.

She was charged with one count of money laundering and one count of wire fraud, to which she pleaded guilty. The plea agreement was announced by the DOJ on June 8.

According to the DOJ, Kreuper diverted school funds into the St. James convent and savings accounts and then used the diverted funds "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."

By her own admission, the embezzlement went on for a period of 10 years, ending in September 2018. She was principal of St. James Catholic School for 28 years, and therefore was responsible for money the school received to pay for tuition and fees, as well as for charitable donations.

Kreuper controlled accounts at a credit union, including a savings account for the school and one established to pay the living expenses of the nuns employed by the school. In her plea agreement, Kreuper admitted that she had looted these accounts for her own benefit. Kreuper further admitted in her plea agreement that she falsified monthly and annual reports to the school administration to cover up her fraudulent conduct and "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."

The criminal information also alleges that Kreuper directed St. James school employees to alter and destroy financial records during a school audit.

The Torrance, Calif., police department, the FBI, and the IRS's Criminal Investigation conducted the investigation. The Archdiocese of Los Angeles declined to press charges, but federal investigators had sufficient evidence to charge Kreuper with violating federal interstate commerce laws.