Nun gets one year in prison for Torrance school embezzlement

A line of children outside classrooms at St. James Catholic School in Torrance.

Feb. 7, 2022 Updated 4:17 PM PT

An 80-year-old nun who admitted stealing $835,000 from a Torrance elementary school asked a federal judge on Monday to show mercy and spare her from prison.

“I have sinned, I have broken the law, and I have no excuses,” Sister Mary Margaret Kreuper, the former principal of St. James Catholic School, told the judge. 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.”

Torn between parents and students who forgave her and those who demanded retribution for her theft of tuition money that she used to pay for Las Vegas and Lake Tahoe vacations, U.S. District Judge Otis D. Wright II acknowledged his own anguish in finding a punishment to fit the crime. He settled on one year and a day in prison.

“I haven’t slept well in God knows how long,” Wright told a Zoom hearing audience, rejecting prosecutors’ call for a two-year term and saying he could not bring himself to judge Kreuper solely on “the worst thing that she’s done in her life.”

Wright told Kreuper she’d been “one heck of a teacher” during her 62 years as a nun.

“You can be proud of that,” he said. “But somewhere along the line, you just ran completely off the road, and I think you understand that. At least I hope you do.”

Kreuper, who retired in 2018 after 28 years as the school’s principal, pleaded guilty in July to wire fraud and money laundering, confessing that she stole tuition checks, spent much of the money on casino outings with friends and tried to cover up the embezzlement.

The stolen money could have covered a decade of tuition for 14 students at a school that lacked money for field trips or new books and classroom supplies, prosecutors said.

In a series of deeply personal remarks from the bench, Wright, 77, a Marine veteran and former deputy sheriff who has served as a federal judge for 15 years, said he “owed where I am today” in large part to a nun who inspired him early in life.

“Nuns should realize 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,” said Wright, who fell silent and covered his face in his hands for a long pause during his pronouncement of the sentence.

In private letters to 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 small school of three stucco and red-brick buildings from 2005 to 2014, told the judge about the fear that Kreuper instilled in children when they misbehaved.

“To know that she had been taking money from my parents and my peers’ parents the whole time I was there is extremely shocking, and it sways me away from the Catholic Church,” she said. “Trust shouldn’t be broken like that.”

Kevin Kearns, who met Kreuper in 2011 when he enrolled his son in kindergarten at St. James, asked Wright 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.”

On screen in one of the Zoom windows were five fellow nuns from her order, the Sisters of St. Joseph of Carondelet.

Prosecutors told the judge Kreuper deserved prison time for stealing parents’ checks to the school “over and over and over again” for a decade, then ordering staff to destroy records in a coverup. They also urged Wright to keep in mind that her status as a nun helped her evade detection.

“Put simply, anyone who stole over $800,000 from a school would go to prison, your honor,” Assistant U.S. Atty. Poonam Kumar told the judge.

In a memo to the judge, prosecutors cited letters from parents and students, including one from a 12-year-old saying Kreuper was “just like any other robber.”

When the Archdiocese of Los Angeles first confronted Kreuper about her misconduct, she argued that priests are better paid than nuns, and said she believed she deserved a raise, according to the government.

Mark Byrne, Kreuper’s attorney, acknowledged that Kreuper “abused her trust,” but called on Wright to sentence her to probation. For three years, Byrne told the judge, the nuns in her order have kept her under “severe restrictions” at a convent.

“She doesn’t have anywhere to go,” he said. “She’s 80 years old. She doesn’t have any money. She’s obviously not employable.”

Byrne also cited an expert report finding that Kreuper was addicted to gambling. “This is not an excuse for what she did,” he said. “This is merely an explanation.”

The judge said he was grappling with the possibility that conditions at the convent might be worse than prison.

“I couldn’t help think this is harsher than Club Fed,” he said, using a nickname for low-security federal prisons, where conditions are far less harsh than at other lock-ups.

Wright ordered Kreuper, who took a vow of poverty and whose living expenses are paid for by the order, to pay $835,339 in restitution to St. James. At the prosecutor’s request, the judge later lowered the amount by $10,000 to account for what she has already repaid.

After reviewing all the letters, Wright said, it appeared most families had forgiven Kreuper.

But Phil Rhilinger, who with his wife, Debby, sent five kids to St. James, called on Wright to impose the maximum sentence — up to 20 years for each of the two crimes.

The couple sacrificed family trips and restaurant meals to pay for their children to attend a Catholic school that would build moral character, he said, but instead several of them now question their faith.

“We need to send a message that embezzling and betraying is not OK no matter who you are, no matter what your age or circumstance,” Rhilinger told the judge.

Kreuper promised to follow “more closely in Christ’s footsteps” and spend the rest of her life trying to make amends.

“I was wrong, and I am profoundly sorry for the pain and the suffering that I have caused so many people,” she told Wright. “I apologize for the public scandal, the embarrassment and the financial burden that I have placed on the sisters in my religious community, the Archdiocese of Los Angeles, St. James School, the parishioners, parents and students who placed their trust in me.”

Nun sentenced to year in prison for stealing $835,000 from Torrance elementary school

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