Nuns stole over $500,000 from struggling Catholic school to fund trips and gambling habit
Sister Mary Margaret Kreuper was the principal of the St. James Catholic School for 28 year and Sister Lana Chang taught the eighth-grade
Two nuns from a California Catholic school have been accused of siphoning $500,000 in tuition, fees, and donations that could have gone towards the school's development into a different account that was then used to fund trips and casino visits.
The fraud came to light after the accused, Sister Mary Margaret Kreuper and Sister Lana Chang, recently retired from their positions at the St. James Catholic School in Torrance — the former was the principal of the school for 28 years while the latter taught the eighth-grade.
The Press-Telegram reports that the scandal came to light after a routine audit of procedures was conducted ahead of Kreuper's retirement. At the same time, a family who had donated money to the school asked for a copy of a cheque made out to them and staff noticed that the money had been deposited in a bank account not affiliated to the school. Nothing had been suspected previously as the school had always run on fumes.
The revelation came as a rude shock to parents who, for the longest time, were led to believe that the school was struggling to develop and stay afloat because of a shoestring budget and a lack of funds. The fact that the school had suffered a tragedy only four years earlier — four people, including a six-year-old boy, were killed while leaving a Christmas concert at St. James when a drunk driver plowed into the crowd — only added to the notion that it was an organization that wasn't in its healthiest state.
Church monsignor Michael Myers addressed a crowd of a few hundred people and said the archdiocese had launched an internal investigation into the matter around half a year ago when Kreuper became "very nervous and very anxious" about her upcoming financial review and asked for records to be altered. An internal auditor confirmed the church's suspicions and the pair's scheme unraveled at the seams.
He said Kreuper and Chang, reportedly best friends and members of the Sisters of St. Joseph of Carondelet order, had used the money for trips and gambling and that they had been committing fraud for at least 10 years. He revealed that the two had made an account where they would divert cheques made out to the school, with Kreuper allegedly endorsing the cheques with a "St. James Convent" stamp before then tapping into the money for personal use.
Because the account was opened in 1997 and the fact that bank records before 2012 no longer exist, the $500,000 sum auditors came up with only represents what they were able to trace from the last six years' records. Cash transactions made by the pair are not included and could serve to inflate those figures further.
When confronted with the fraud, Myers said both nuns had confessed to their crimes. In a letter addressed to parents and parishioners, he wrote, "Sister Mary Margaret and Sister Lana have expressed to me and asked that I convey to you, the deep remorse they each feel for their actions and ask for your forgiveness and prayers. They and their order pray that you have not lost trust or faith in the educators and administrators of the school."
The Sisters of St. Joseph of Carondelet confirmed the allegations against Kreuper and Chang, releasing a statement that read, "The Sisters have confirmed the misappropriation of funds and have cooperated in the investigation. Our community is concerned and saddened by this situation and regret any injury to our long relationship with the families of the school. The Sisters of St. Joseph both desire and intend to make complete restitution to St. James School."
Because the order was willing to repay all the money that has been embezzled and promised to impose "severe sanctions" on Kreuper and Chang, the archdiocese was initially unwilling to pursue criminal charges against the sisters and did not want to be the "complaining party"; though they were cooperating with the investigation being conducted by the Torrance police.
However, the fury of the parents soon convinced the archdiocese to have a change in heart. Archdiocese spokeswoman Adrian Alarcon said a "deeper investigation" into the sisters' actions had made them reconsider pursuing criminal charges.
According to the Press-Telegram, Torrance Sgt. Ronald Harris confirmed the same, revealing that the archdiocese had met with detectives last week and now wanted the case prosecuted. "They indicated they were desirous of pressing charges, so we’re moving forward as soon as we formally meet with them again," he said.