Former San Diego Mayor Maureen O’Connor charged with money laundering after losing over $1 billion in gambling spree, according to a Feb. 14 USA Today report. The two-term Democrat pleaded not guilty to the charges in court on Feb. 14, but admitted to siphoning $2.1 million from her late husband’s charity foundation to support a gambling addition that led her to accumulating over a $1 billion loss over a decade.
The R.P. Foundation is a non-profit created by her late husband, Robert O. Peterson, a co-founder of the Jack-In-The-Box restaurant chain and a Southern California bank that was acquired by Union Bank. The foundation is currently bankrupt. Peterson died in 1994. O'Connor and her twin sister are reportedly two of the foundation's three trustees. The foundation gave funds to charities, including the City of Hope, the Alzheimer’s Association and San Diego Hospice, among others.
Prosecutors allege that between September 2008 and March 2009, O'Connor drained the foundation of its assets. Though she admits taking the funds, she maintains they were “loans” that she fully intended to repay.
“I always intended to pay it back, and I still intend to pay it back,” she said. “In that period of time I lost my husband, three siblings, best friends.” She continued, “Most of you know, I never meant to hurt the city.”
As part of a deferred prosecution agreement, O’Connor must repay the $2,088,000 she took from the foundation, in addition to state and federal income taxes on the more than $1 billion she won gambling between 2000 and 2009. O’Connor has also been ordered to undergo treatment for her gambling addiction, according to U.S. Attorney Laura E. Duffy of the Southern District of California.
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