Nun admits to stealing over $835,000 from her school to help finance gambling habit, feds say

A now-retired nun will plead guilty to wire fraud and money laundering charges for stealing more than $835,000 for gambling and other personal expenses from the Southern California school that she ran, federal prosecutors say.

Mary Margaret Kreuper, a 79-year-old Los Angeles resident, violated her vow of poverty during a 10-year period in which she pocketed tuition money, fees and charitable donations intended for St. James Catholic School in Torrance, California, according to a plea agreement with US Attorney’s Office for the Central District of California. She was principal for nearly three decades.

Kreuper’s attorney Mark Byrne said Thursday that his client was “very remorseful” and, when confronted, “accepted full responsibility for what she had done and … cooperated completely with law enforcement and the Archdiocese.”

Byrne said in a statement that Kreuper became a nun at 18 and “dedicated her life to helping others and educating children in Archdiocesan schools.”

“Unfortunately, later in her life she has been suffering from a mental illness that clouded her judgment and caused her to do something that she otherwise would not have done,” he added. “She is very sorry for any harm she has caused.”

Kreuper will be arraigned July 1.

CNN has requested comment from the Los Angeles Archdiocese.

Kreuper was charged Tuesday with one count of wire fraud and one count of money laundering, federal prosecutors said. Under the agreement she pleaded guilty carry to the charges, which prosecutors said carry a maximum 40-year federal prison sentence.

During her 28 years as principal, Kreuper oversaw funds the school received, including cash and checks for tuition, fees and donations, according to the plea agreement.

Kreuper was a signatory on a pair of credit union accounts — a school savings account and a “convent” account to pay for living expenses for herself and others nun at the school, the plea agreement said.

But Kreuper “fraudulently diverted” checks and cash intended for the school into the two accounts she controlled “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,” according to the agreement.

To conceal the scheme, Kreuper falsified monthly and annual school financial reports, the agreement said.

“By falsifying these reports in this way, defendant Kreuper lulled St. James School and the Administration into believing 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, to continue operating the fraudulent scheme,” the agreement said.

Kreuper also directed school employees “to alter and destroy financial records” during a financial audit, according to the agreement.

Over 10 years, ending with her retirement in September 2018, Kreuper admitted in the agreement to embezzling $835,339, the agreement said.