Nun Who Embezzled $835K From Torrance School Sentenced To One Year In Prison

LOS ANGELES (CBSLA) – The retired principal of a Catholic elementary school in Torrance, who as a nun took a vow of poverty, was sentenced Monday 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, pleaded guilty in July to federal wire fraud and money laundering charges. She was sentenced to 12 months and one day in federal prison in addition to being ordered to pay $825,338 in restitution.

Prosecutors recommended a 24-month prison sentence, three years of supervised release, and restitution.

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.

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.

(© Copyright 2022 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)