Retired nun admits to embezzling more than $800,000 to fund gambling habit

A retired nun has admitted to embezzling $835,000 over 10 years from a Catholic school in California to fund her gambling habit, according to federal prosecutors.

Sister Mary Margaret Kreuper, 79, a former principal at St James Catholic School in Torrance, California, used tuition fees and donations to subsidize casino gambling expenses and credit card payments, the authorities said.

Kreuper, who took vows of poverty at age 18 and spent 59 years in the religious order, said in her plea agreement that she had begun diverting money from the school’s tuition and donation account to a savings account that funded the living expenses of the nuns who worked at the school – and then used some of the money herself.

According to prosecutors, Kreuper 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.”

In a statement to The Washington Post, Kreuper’s lawyers said she is “very remorseful” and “sorry for any harm she has caused”.

“As soon as she was confronted, she accepted full responsibility for what she had done and she has cooperated completely with law enforcement and the archdiocese,” the statement said, adding that “she has been suffering from a mental illness that clouded her judgment”.

The scheme was uncovered during an audit after Kreuper retired in 2018. Prosecutors said that she had also instructed school employees to “alter and destroy financial records”.

Kreuper is due in court on 1 July and faces up to 40 years in federal prison.

The archdiocese of Los Angeles said in statement that “the community of faith at St James was shocked and saddened by these actions” and expressed gratitude “to local and federal law enforcement agencies for their work in the investigation of this matter”.

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