By Andrew Rafferty, Staff Writer, NBC News
O'Connor walked into the federal courthouse with her attorney by her side Thursday.
Former San Diego Mayor Maureen O?Connor acknowledged in federal court Thursday that?she took $2 million from her late husband's charitable foundation to pay for her addiction to video poker ? and lost $1 billion wagering over the course of a decade.
O?Connor, the mayor of California?s second largest city from 1986 to 1992, pleaded not guilty to money laundering as part of a deal with prosecutors that will defer the charges for two years as she attempts to repay the debt.
An attorney for O?Connor, Eugene Iredale, told reporters outside the courthouse that his client had severe health problems, including a brain tumor, ?that led to her gambling addition, according to NBC San Diego.
Iredale said his client won more than $1 billion from 2000 to 2009 playing video poker in Las Vegas, Atlantic City and San Diego, but lost most of it.
After dipping into the red, she wound up compiling $13 million in debt, according her attorney.
Prosecutors allege that between September 2008 and March 2009, the 66-year-old took more than $2,088,000 from the foundation started by her late husband, Jack-in-the-Box founder Robert O. Peterson.
O?Connor was elected the first female mayor of San Diego after serving eight years on city council.? She was married to Peterson from 1977 until his death in 1994, and her estate was at one time worth $40 to $50 million.
The Associate Press contributed to this report