Two longtime nuns at St. James Catholic School in Torrance allegedly embezzled as much as $500,000 in tuition, fees and donations, perhaps spending some of the money on trips and gambling at casinos while telling parents the school was operating on a shoestring budget, it was reported Thursday.
The figure represents only what auditors have been able to trace in six years’ of bank records and might not include other cash transactions, officials from the Archdiocese of Los Angeles told parents and alumni at a meeting Monday night at St. James Catholic Church in Redondo Beach, the Long Beach Press-Telegram reported.
An audio recording of the two-hour meeting was obtained by the Southern California News Group.
The apparent scandal came to light last week when the church’s small, K-8 school announced that it had notified police that Sister Mary Margaret Kreuper and Sister Lana Chang, who both had retired earlier this year, were “involved in the personal use of a substantial amount of school funds.” But the nuns had expressed remorse, and the archdiocese and the church were not pursuing criminal charges.
Kreuper was the school’s principal, and Chang taught there.
Michael Meyers, the church’s monsignor, told the crowd of a few hundred people that the archdiocese launched an internal investigation six months ago after the organization performed a standard audit of procedures ahead of Kreuper’s retirement after 28 years at the school, according to the Press-Telegram.
Around the same time, Meyers said, a family happened to request a copy of a check made out to the school, and the staff noticed it had been deposited in a bank account other than the school’s.
That’s when Kreuper became “very nervous and very anxious” about the upcoming financial review and requested that the staff alter records, the monsignor said. Meyers said he alerted an archdiocese internal auditor performing the review that “something was off” and that the auditor confirmed his suspicions.
The archdiocese then hired an independent forensic auditor for a deeper review.
Without the red flags raised by the check, Kreuper’s “strange” behavior and a tip made to an archdiocese ethics hotline, officials said the school would never have known about the problem.
The improper use of the funds had been going on for at least 10 years, Meyers said, according to the Press-Telegram. The parish and the school have always run in the black, so it appears no one had suspicions.
Jack Alexander of Redondo Beach said in an interview with the Southern California News Group that he and other parents are considering banding together to act as a complaining party to Torrance police themselves. But without cooperation from the archdiocese, he is doubtful the effort would lead to prosecution.
“We were an ATM, and people know it and they won’t ask for justice,” Alexander said.
Parents said it was well-known that Kreuper and Chang traveled often and went gambling, but that they claimed they were gifted the trips by a rich relative.
“These nuns took a vow of poverty and said, “Oh no, we’ve got a rich uncle,”’ Alexander said. “The rich uncle was the parents of the St. James students.”