Elderly US nun jailed for stealing over $850,000 from school

Sr Mary - Screenshot

Source: US Attorney's Office Central District of California/LA Times/SJC

A retired nun who served as principal of a Catholic elementary school in Torrance, Los Angeles, California for 28 years, was sentenced on Monday to 12 months and one day in a federal prison for stealing more than $835,000 in school funds to pay for personal expenses, which included gambling trips to Las Vegas and Lake Tahoe. Sister Mary Margaret Kreuper, SJC, 80, was sentenced by US District Judge Otis D Wright II, who also ordered her to pay $825,338 in restitution. Kreuper pleaded guilty in July 2021 to one count of wire fraud and one count of money laundering.

The court heard that for a period of 10 years, ending in September 2018, Kreuper embezzled money from St James Catholic School. 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.

She diverted school funds into other accounts and then used these 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," according to court documents.

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," court documents state. Kreuper also directed St James School employees to alter and destroy financial records during a school audit.

The theft was discovered during an audit after Sr Mary retired in 2018.

"On an annualized basis (approximately $83,000 per year), (Kreuper) stole the equivalent of the tuition of 14 different students per year," prosecutors argued in a sentencing memorandum. "These funds were intended to further the students' education, not fund Kreuper's lifestyle. In their letters to the court, several students and parents commented on how the school was lacking in resources…Another parent discussed in a letter to the court how (Kreuper) said there was no money for an awning at school and no money for field trips."

In private letters to Judge Wright and remarks at the video hearing, some former St James students asked him to put the nun behind bars. Julija Garunkstis, who attended the school from 2005 to 2014, told the judge about the fear that Kreuper instilled in children when they misbehaved. Phil and Debbie Rhilinger, who sent five children to the school called on Wright to impose the maximum sentence - up to 20 years for each of the two crimes. They said they had made many sacrifices to be give their children a Catholic education and this discovery had made them question their faith.

But many other former pupils praised Sr Mary. Kevin Kearns, whose son joined the school in 2011, asked the judge to show leniency, saying she "put the students and parents above everything else..." "The church tells us to forgive those who have trespassed against us," Kearns said. "I've used this to teach my son that we're all human, we all make mistakes, but the power of forgiveness is the most powerful tool that we have."

After reviewing all the letters, Judge Wright said it appeared most families had forgiven Kreuper and he was struggling with weighing legal punishment against pleas for forgiveness.

Rejecting the prosecutor's call for a two year sentence, he told the Zoom hearing "I haven't slept well in God knows how long," saying he could not bring himself to judge Sr Mary solely on "the worst thing that she's done in her life."

He told her she had been "one heck of a teacher" during her 62 years as a nun. "You can be proud of that … But somewhere along the line, you just ran completely off the road, and I think you understand that. At least I hope you do."

"Nuns should realise that just by living their lives and living the way they do and treating people the way they do, they affect children for the rest of their lives," the judge said.

He then fell silent and put his face in his hands for a long pause during his pronouncement of the sentence.

Sr Mary Kreuper said: told the judge she was "profoundly sorry" and would spend the rest of her life trying to follow "more closely in Christ's footsteps". "I have sinned, I have broken the law, and I have no excuses." She called her crimes "a violation of my vows, the commandments, the law, and above all the sacred trust that so many had placed in me."

Her lawyers said she had been suffering from mental illness which "clouded her judgment".

In a statement, Sr Mary's order, The Sisters of St Joseph of Carondelet. said: "Sister Mary took responsibility for her actions by pleading guilty. Today, she has been held accountable by the United States criminal justice system.

"Justice for others and for ourselves is a deep value held by the Sisters of St Joseph. We also deeply value relationships. Our community is deeply saddened by the pain and difficulty Sister Mary's actions have caused for the parents, administration, staff and students of St James School in Redondo Beach, California and the Archdiocese of Los Angeles. We pray that in time those impacted will find healing and the seeds of forgiveness."