SAN DIEGO (CN) - Former San Diego Mayor Maureen O'Connor agreed to repay $2.1 million to her late husband's charity, pay taxes on the money she stole, and get treatment for her billion-dollar gambling addiction, federal prosecutors said.
O'Connor entered the deferred prosecution agreement Thursday, the U.S. Attorney's Office said. She was married for 17 years to the founder of the Jack in the Box restaurant chain, Robert Peterson, who died in 1994. He established the R.P. Foundation, which funded a number of hospitals and health-care charities. His wife was one of three trustees of the foundation, and was specifically prohibited from benefiting from the foundation.
According to the U.S. attorney's statement: "Between 2000 and 2009, O'Connor won more than $1 billion while gambling in various casinos in Las Vegas, Atlantic City and San Diego. Despite these immense winnings, she suffered even larger gambling losses - resulting in a sizable net loss. Indeed, by early 2008, she incurred large, outstanding gambling debts at a number of different casinos. In order to stay afloat financially and continue her gambling spree, O'Connor liquidated her savings, sold numerous real estate holdings and auctioned valuable personal items. She also obtained second and third mortgages on her personal residence in La Jolla, California.
"By September 2008, O'Connor had few, if any, assets that had not been mortgaged, sold off, or otherwise liquidated. At that point, she turned to the Foundation's assets to both pay her outstanding debts and continue her high-stakes gambling. Between September 2008 and March 2009, O'Connor misappropriated more than $2,088,000 from the foundation. Equally troubling, despite winning hundreds of thousands of dollars during that time period, she literally 'threw good money after bad' by continuing gambling - rather than reimbursing the Foundation for the wrongfully taken funds."
O'Connor, 66, was mayor of San Diego from 1986 to 1992.
Her crime, prohibited financial transaction, is punishable by up to 10 years in federal prison and a $250,000 fine.
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