LOS ANGELES—The retired principal of a Catholic elementary school in Torrance, who as a nun took a vow of poverty, was sentenced Feb. 7 to 12 months and a day behind bars for embezzling more than $835,000 in school funds to support a gambling habit and other personal expenses.
Mary Margaret Kreuper, 80, of Los Angeles, was also ordered to pay $825,338 in restitution, according to the U.S. Attorney’s Office.
Kreuper pleaded guilty in July to federal wire fraud and money laundering charges.
After charges were filed, her attorneys issued a statement saying Sister Mary Margaret suffered “from mental illness that clouded her judgment and caused her to do something that she otherwise would not have done. She is very sorry for any harm she has caused.”
Kreuper acknowledged that for a period of 10 years ending in September 2018, she embezzled $835,339 from St. James Catholic School. As principal—a position she had for nearly 30 years before she retired—Kreuper was responsible for the money the school received to pay for tuition and fees, as well as for charitable donations, according to documents filed in Los Angeles federal court.
When an audit threatened to expose the scheme, Kreuper instructed St. James employees to destroy documents, according to prosecutors.
Kreuper controlled accounts at a credit union, including a savings account for the school and one established to pay the living expenses of nuns—who had taken a vow of poverty—employed by the school, prosecutors said.
Diverting embezzled funds into secret accounts, Kreuper used the money “to pay for expenses that the order would not have approved, much less paid for,” including large gambling expenses and trips to Las Vegas, Lake Tahoe, and Temecula, according to her plea agreement.
She further admitted “lulling 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 allowed her to maintain access to the school’s finances.
Defense attorneys said Kreuper became a nun when she was 18 years old, and for the next 59 years “dedicated her life to helping others and educating children in Archdiocesan schools. … As soon as she was confronted, she accepted full responsibility for what she had done and she has cooperated fully with law enforcement and the Archdiocese.”
U.S. District Judge Otis D. Wright II said at last year’s plea hearing that he was raised as a Roman Catholic, “and was educated by nuns. And I don’t look at nuns as ordinary people.”
The judge advised Kreuper that he expected her to make a statement at sentencing, adding, “I don’t have to worry about [lies] coming from you.”