Two nuns at a Southern California Catholic church are suspected of misappropriating about $500,000 in school funds, supposedly using some of the money to go on trips and gamble at casinos, a spokesperson for the Archdiocese of Los Angeles told ABC News.
The nuns, Sister Mary Margaret Kreuper and Sister Lana Chang, had been “involved in the personal use of a substantial amount” of school funds “over a period of years,” Monsignor Michael Meyers, pastor for the St. James Catholic School in Redondo Beach, about 20 miles southwest of Los Angeles , wrote in a letter to parents on Nov. 28.
The money which were products of tuition, school fees and donations and was taken while the nuns allegedly convinced parents that the school was operating on a scanty budget, The Press-Telegram, a Long Beach, California-based newspaper, reported.
Meyers wrote that school administration took note of the alleged scam after conducting financial reviews “in connection with a change in leadership” at the school,. The half million-dollar figure represents only what auditors have been able to trace in six years’ worth of bank records and may not include cash transaction, the Archdiocese of Los Angeles told parents at an alumni meeting last week, according to The Press-Telegram.
According to The Press-Telegram, the school principal, Kreuper, and Chang, a teacher, retired earlier this year. A standard audit procedure was done about six months ago, ahead of Kreuper’s retirement after 28 years of working at the school, the local newspaper reported.
About that time, school staff perceived that a check made out to the school had been deposited into a different bank account after a family happened to demand a copy of the check, according to The Press-Telegram.
Kreuper then became “very nervous and very anxious” about the financial review and asked that staff alert records, and Meyers alerted an archdiocese internal auditor conducting the review that “something was off,” Meyers said at the alumni meeting.
The auditor later verified Meyers’ suspicions, he said at the alumni meeting. Further more, a tip was made to an archdiocese ethics hotline, The Press-Telegram reported.
“They used the account as their personal account,” an attorney for the archdiocese disclosed during the alumni meeting, including that they had a “pattern” of going on trips and to casinos, according to the local newspaper.
Kreuper seemingly managed all checks sent to the school for tuition and fees and before passing them over to the bookkeeping for processing, auditors said at the alumni meeting, The Press-Telegram reported.
Kreuper would apparently hold some of the checks and deposit them into a “long forgotten” bank account opened in 1997 that only she and Chang aware of, auditors said. Those checks would then be approved with a stamp that read “St. James Convent” instead of “St. James School,” according to the local newspaper.
Although Meyers originally wrote in his letter that the Archdiocese did not wish to follow criminal proceedings, the spokesperson for the archdiocese told ABC News on Sunday that it plans on taking the matter as a criminal case now that the investigation has enlarged. Other staff members at the church were not involved, Meyers wrote in his letter to parents.
ABC News could not instantly get through to a spokesperson for the Los Angeles County District Attorney’s Office for comment.
The Sisters of St. Joseph of Carondelet, the order to which Kreuper and Chang belong , has accepted to plan full restitution of the funds, Meyers said. The order will also add “appropriate penalties and sanctions” on the sisters, in line with the policies of the order, Meyers wrote. ABC News could not instantly reach the order for comment.
The accused nuns feel a “deep remorse” for their actions and are pleading for “forgiveness and prayers,” Meyers wrote in his letter to parents.
“They and their Order pray that you have not lost trust or faith in the educators and administrators of the school,” Meyers indicated in his letter to parents. “Let us pray for our school families and for Sister Mary Margaret and Sister Lana.”
St. James Catholic School has introduced extra procedures and oversight policies for financial management and reporting responsibilities, Meyers said.
No student or program has “suffered any loss of educational resources, opportunities, or innovations” due to the misappropriation of funds, Meyers wrote, stressing to parents that their children’s education “has not and will not be affected by these events.”
ABC News could contact Kreuper or Chang for comment. It is uncertain if they have taken attorneys.