Ex-Mayor Lost Up to $1B in Gambling Winnings

Former San Diego Mayor Maureen O'Connor, widow of Jack-in-the-Box founder Robert O. Peterson, squandered away her fortune on a video poker habit, according to her personal attorney.

The revelation was made Thursday outside a federal courthouse in San Diego where O'Connor faces one charge of misusing millions from a charity set up by her late husband.

The former mayor's eyes filled with tears and she answered questions haltingly as she pleaded not guilty to a money laundering charge.

According to her attorney, O'Connor has had severe health problems for several years including a brain tumor which he blamed for a gambling habit.

The 66-year-old, whose estate was at one time worth $40 to $50 million on paper, spent every last dime she had gambling according to attorney Eugene Iredale.

Iredale said his client won and lost more than $1 billion in gambling winnings over a nine-year period of playing video poker in Las Vegas, Atlantic City and San Diego. 

They alleged that between Sept. 2008 and March 2009, O'Connor took more than $2,088,000 from the foundation.

"A sum of money which she intended to repay but was unable to repay,” Iredale said.

The money was earmarked for charitable purposes but was used for other purposes he said.

Prosecutors alleged O'Connor "deprived the Foundation of its remaining assets and left it completely bankrupt."

O'Connor's entrance into the federal courthouse Thursday morning was unsteady.

Using a cane and answering haltingly, O’Connor appeared as a hollow shell of what she once was.

She pleaded not guilty and was put on supervised pre-trial status.

Her medical condition is such that she will not be booked immediately. Because she is under medical care of a physician, she’ll be booked Friday.

She was granted two years of deferred prosecution.

O'Connor (pictured left in 2000) served as San Diego's mayor from 1986 to 1992. She also served on the San Diego City Council and the port commission.

O'Connor was married to Peterson from 1977 until his death in 1994.

After court, O’Connor spoke to members of the media - many who covered her during her tenure as mayor.

She explained how there are essentially two Maureens.

“Maureen #2 is the woman who did not know she had a tumor growing in her head, in her brain,” she said.

She used the word "borrowed" when she spoke of the $2 million she's accused of misusing and said it occurred during a difficult time in her life.

“Those of you who know me here would know that I never meant to hurt the city that I loved,” she said.