Gambling Nun Charged with Embezzling $800,000 to Support Habit

In California, a septuagenarian nun faces up to 40 years in prison after pleading guilty to federal fraud and money laundering charges.

Sister Mary Margaret Kreuper admitted embezzling $835,000 from St James Catholic School in the LA suburb of Torrance. Most of the funds she blew on gambling trips to Las Vegas and Lake Tahoe with her friend and housemate, Sister Lana Chang.

Kreuper is the school’s former principal. She ran the institution on a shoestring while plundering an account containing tuition fees and charitable donations over a period of ten years.

Nuns joining Kreuper’s, order, the Sisters of St. Joseph of Carondelet, take vows of poverty when they are called to their vocation.

Rumbled by Audit

But according to the US Attorney’s Office Central District of California, Kreuper 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 claimed she had a rich uncle who paid for the trips.

She was rumbled in June 2018, just as she was about to retire after 28 years as principal, when an internal audit blew the lid off the racket.

This “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,” according to the DOJ.

Kreuper is also accused of directing school employees to alter and destroy financial records while the audit was in process.

She confessed after the diocese hired an ex-FBI agent to grill staff members at the school.

Parents Fight Back

But many parents were furious when they discovered the diocese had decided not to press charges against Kreuper because she had “shown remorse.”

Parents told The Daily Breeze in December 2018 they were not prepared to absolve Kreuper of her sins. They noted that a lay person in the same situation could expect a lengthy prison sentence.

They were angry that their children had been denied new facilities at the school because of Kreuper’s transgressions. Some parents said they planned to go to the police as a complaining party.

Kreuper will be arraigned on July 1.