Ex-San Diego Mayor Maureen O'Connor admits taking charity funds for gambling addiction

Updated at 4:04 p.m. ET

SAN DIEGO Former San Diego Mayor Maureen O'Connor acknowledged Thursday in federal court that she misappropriated $2 million from her late husband's charitable foundation due to a gambling addiction in which she won more than $1 billion but lost even more over nearly a decade.

O'Connor made the acknowledgement in an agreement with the government to defer prosecution for two years while she attempts to repay the debt.

Before entering federal court Thursday, O'Connor defense attorney Gene Iredale said O'Connor suffered a brain tumor, during which time she gambled away nearly a billion dollars of her inheritance, CBS San Diego affiliate KFMB-TV reports.

(Watch a report from KFMB-TV below)

"She's not pleading guilty. She's not going to be convicted of a crime," Iredale told reporters. "It's a case in which we've agreed that charges will be filed, but they will be dismissed without a conviction, assuming that Maureen has appropriate treatment and conforms to the law for a period of two years."

Iredale said O'Connor's poor health contributed to the gambling problem and that she took the money to repay her debts, KFMB-TV reports.

O'Connor was the Democratic leader of California's second-largest city from 1986 to 1992. The two-term mayor was elected San Diego's first female leader after eight years on the City Council. She was married to Robert O. Peterson, founder of the Jack-In-The-Box restaurant chain.

Prosecutors said her gambling winnings amounted to more than $1 billion from 2000 to 2009 but she lost more than that.

Her defense attorney estimated the debt at $13 million.

O'Connor gambled in Las Vegas, Atlantic City, N.J., and San Diego.

San Diego, California News Station - KFMB Channel 8 - cbs8.com