Ex-San Diego Mayor $1 Billion in Gambling Losses

Former San Diego Mayor Maureen O’Connor took $2 million from a nonprofit foundation to feed a gambling addiction in which she lost more than $1 billion over an eight-year period, federal prosecutors said Thursday.

According to court documents, between 2000 and 2009, O'Connor won more than $1 billion while gambling in Las Vegas, Atlantic City and San Diego. Despite the huge winnings, O'Connor suffered even greater losses -- resulting in a sizeable net loss, prosecutors said. The former mayor lost more than $13 million playing video poker alone at land-based casinos over the past decade.

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 residence in La Jolla, according to prosecutors.

O’Connor who is 66 and in poor health, appeared in federal court and pleaded not guilty to a money laundering charge as part of a deferred prosecution. Under the arrangement with federal prosecutors, she has two years to repay the $2 million taken from the R.P. Foundation, a nonprofit set up by her late husband, Robert O. Peterson.

Peterson was the co-founder of the Jack-In-The-Box restaurant chain and later Southern California First National Bank Corp., which eventually became part of the Union Bank empire.

Prosecutors said O’Connor's current financial situation is described as “destitute.”