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Prof. emeritus Hans Schneider (Geyersberg), CC BY 3.0 , via Wikimedia Commons
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A now-retired nun who was the principal of a Catholic elementary school in Torrance has agreed to plead guilty to fraud and money laundering charges involving the theft of more than $835,000 in school funds to pay for personal expenses, including gambling trips, federal prosecutors announced Tuesday.
Mary Margaret Kreuper, 79, of Los Angeles, was charged Tuesday with one count each of wire fraud and money laundering. In conjunction with the criminal information, prosecutors filed a plea agreement in which Kreuper agreed to plead guilty to the two charges, which carry up to 40 years in federal prison, according to the U.S. Attorney’s Office.
Kreuper has agreed to appear in federal court in Los Angeles for arraignment on July 1.
For a period of 10 years ending in September 2018, prosecutors allege Kreuper embezzled money from St. James Catholic School. As principal — a position she held for 28 years — Kreuper was responsible for the 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.
Kreuper, who as a nun had taken a vow of poverty, diverted school funds into the St. James Convent Account and the St. James Savings Account and then, as she admitted in her plea agreement, 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.”
Kreuper further admitted 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.”
Prosecutors also allege that Kreuper directed St. James School employees to alter and destroy financial records during a school audit. Kreuper admitted that, over the course of the scheme, she caused losses to St. James Catholic School totaling $835,339, according to the U.S. Attorney’s Office.
