Skip to content

Illustration by Security Management 

What Happens in Vegas Sends a Nun to Prison for Fraud

After years of embezzling tuition and funds meant for a California Catholic school educating children in kindergarten through 8th grades, Sister Mary Margaret Kreuper heeded the immortal words of Kenny Rogers and folded her hand, admitting to U.S. federal charges of fraud.

The 80-year-old Southern California nun—who took her vows of chastity, obedience, poverty, and service at 18—was sentenced to serve a year and a day in federal prison for stealing more than $835,000 to fuel her gambling habit during 10 years. Kreuper was also ordered to pay $825,338 in restitution and $200 to the United States for a special assessment.

Prosecutors asked for a sentence of two years, with three years of supervised release, according to a local CBS station.

In her position as principal of St. James Catholic School in Torrance, California, Kreuper squirreled away tuition checks and donations sent to the school’s credit union account, later telling the school community that the school could not afford new textbooks, field trips, or even an awning for an outdoor area. Meanwhile, she used the diverted funds to pay for her personal expenses, including field trips to Las Vegas, Nevada, and Lake Tahoe, Nevada, according to The Washington Post.

Kreuper served as St. James’s principal for 28 years, responsible for the school’s credit union account, as well as the St. James Savings Account and the St. James Convent Account, which paid for the living expenses of the nuns working at the school. Instead of depositing tuition payments and donations into the credit union account, between 2008 and 2018 Kreuper diverted what roughly amounted to annual tuition for 14 students ($835,339) into the savings and convent accounts and then used those funds 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 plea agreement.

To hide the embezzlement, Kreuper generated false monthly and annual reports about the financial position of the school for administrators. This allowed her to maintain her position and control of St. James’s financial accounts.

Kreuper announced her retirement in 2018, initiating a financial review of the school by the archdiocese to prepare for the incoming principal, the Post reported. “…But as the archdiocese was completing its audit, it noticed something was off with the funding.”

Kreuper ordered school employees to either destroy or falsify the school’s financial records, which, along with the discovery of accounts unknown to school administrators, raised auditors’ suspicions. Once she was confronted, Kreuper confessed to stealing school funds, claiming it as a salary differential that she was owed.

But Kreuper later acknowledged her crimes to a U.S. federal judge on 7 February. “I have sinned, I have broken the law, and I have no excuses,” Kreuper said.

Kreuper’s attorney provided evidence that Kreuper has a gambling addiction, which she was unaware of until she was accused of embezzlement.