Nuns accused of embezzling $500K removed from public ministry, religious order says

Two nuns accused of embezzling at least $500,000 in tuition, fees and donations from a Southern California Catholic school have been removed from public ministry, according to the religious order they were serving under.

Sister Mary Margaret Kreuper and Sister Lana Chang allegedly stole the funds by depositing checks for tuition and fees for the St. James Catholic School in Redondo Beach -- about 20 miles southwest of Los Angeles -- into a "long forgotten" bank account opened in 1997, The Press-Telegram, a Long Beach, California-based newspaper, reported. The sisters were the only two who knew about the bank account, according to the local newspaper.

They allegedly used some of the money to go on trips and gamble at casinos, a spokesperson for the Archdiocese of New York told ABC News over the weekend.

Kreuper, the school principal, would handle all checks made out to the school for tuition and fees before handing them over to bookkeeping for processing, according to The Press-Telegram.

The nuns have been removed from their residence and placed in a religious house under the supervision of community leadership, the religious order they belong to, the Sisters of St. Joseph of Carondelet, said in a statement.

The half-million figure only represents what auditors have been able to trace in six years' worth of bank records and may not include cash transactions, the Archdiocese of Los Angeles told parents at an alumni meeting last week, according to The Press-Telegram.

Both nuns retired earlier this year. They "take full responsibility for the choices they made and are subject to the law," the order said.

Although Monsignor Michael Meyers, pastor for the school, initially wrote in his letter that the Archdiocese of Los Angeles did not wish to pursue criminal proceedings, the Archdiocese has since filed a criminal complaint with the Torrance Police Department, the order wrote in its statement. Other staff members at the church were not implicated, Meyers wrote

The Torrance Police Department was made aware of an allegation regarding the misappropriation of funds at the St. James Catholic School a couple of weeks ago, but at the time church officials indicated that they would not require an investigation and would handle the matter internally, Sgt. Ronald Harris, public information officer for the police department told ABC News.

A few days ago, church officials contacted the police department again, expressing that they now desire to prosecute, Harris said, adding that the department will conduct a proper investigation after meeting with church officials.

The order plans to pay all the money back once a final sum of what was taken has been determined, it said.

"We are unable to confirm any sum until the discovery phase is completed," the order said. "We intend to make restitution to St. James School as soon as a total is known. Justice demands this of us."

The order apologized for the nuns' actions.

"The Sisters of St. Joseph of Carondelet are concerned and saddened by this situation and regret any pain this has caused many in our Church, especially the families connected to St. James School," they said. "We hold the sorrow of our Sisters’ actions deep in our community hearts."

No student or program has "suffered any loss of educational resources, opportunities, or innovations" as a result of the misappropriation of funds, Meyers wrote to parents, emphasizing that their children's education "has not and will not be affected by these events."

ABC News could not reach Kreuper or Chang for comment. It is unclear if they have retained attorneys.

ABC News' Lisa Silverstein contributed to this report.