“I did wrong,” Thompson, 47, told U.S. District Judge Emmet G. Sullivan.
As part of a plea deal, federal prosecutors agreed to drop similar charges against Thompson’s wife, Bianca, who was the center’s deputy director. And Thompson agreed to provide “substantial” cooperation to the government in a separate investigation that was not detailed in court papers filed Wednesday.
Thompson’s case represents the latest in a quickening stream of federal cases coming to resolution that involve public corruption in the District.
“Keely Thompson squandered tax dollars, meant to help children, at the casino,” U.S. Attorney Ronald C. Machen Jr. said in a statement.
“He lied to secure public and charitable funds that he stole for his own frivolous entertainment. This case echoes the message we have delivered time and time again.”
Thompson’s admission in court Wednesday comes amid other allegations of misuse of city government grants to nonprofit organizations. Last week, the District’s attorney general filed a lawsuit against the nonprofit Peaceoholics, claiming that its leaders won grants based on false tax returns and used other city money to buy high-end vehicles.
The leaders challenged the basis for the lawsuit and denied any wrongdoing.
Thompson, who grew up in the District, fought professionally as a lightweight in the late 1980s and early 1990s. He opened his center in a church basement on Columbia Road in 2004 with help from a local government anti-gang grant.
In a profile of the gym in The Washington Post that year, Thompson credited D.C. Council member Jim Graham (Ward 1) with helping him find the funding and the space for the program, designed to prevent kids from joining gangs.
“We teach discipline, obedience. We teach respect,” Thompson said at the time.
Two years later, Washingtonian Magazine included Thompson among its 2006 people of the year.
Graham recalled Wednesday that when he first met Thompson, “he looked good, and what he proposed to do looked good.” But in the fall of 2009, he said, he became aware of allegations that Thompson was misusing city money — allegations Graham says he reported to the District’s inspector general and attorney general.
“It was a popular gym. People were involved there, and it really looked good,” Graham said.” But that’s not where he was spending the money.”
Thompson was initially arrested in November 2010 on a wire-fraud charge. According to court records, he had expressed interest in negotiating a deal but later changed his mind, leading to an indictment in November 2012.
According to the plea agreement filed Wednesday, Thompson’s center received more than $1.5 million from the D.C. government and private grants between 2004 and 2009.
Thompson admitted to spending $205,000 for his personal use, with more than half of the money going to gambling outings at Bally’s casino in Atlantic City and on a Norwegian Cruise Line ship. During a two-month period in 2009, court records show, $18,700 was withdrawn from the boxing center’s account at ATMs at Bally’s.
An additional $50,000 went to restaurant meals, grocery store purchases, concerts, speeding tickets and clothing, according to the statement of offense signed by Thompson and prosecutors.
Thompson will have to pay $205,000 in restitution to the organizations that provided the money. He must also forfeit at least $205,000, according to the plea deal.
Nearly half of the grant money the boxing center received came from the D.C. government, including the D.C. Children and Youth Investment Trust Corporation, the office of the deputy mayor for planning and economic development, and the D.C. Council.
In the fiscal 2009 budget, the boxing center received a $230,000 earmark. For years, council members used earmarks to set aside city funds for favorite community groups.
But earmarks became synonymous with abuse in 2009 when council member Marion Barry (D-Ward 8) was found to have sent city money to nonprofit groups he had created and controlled. Earmarks were also involved in former council member Harry Thomas Jr.’s theft of city funds, for which he pleaded guilty and was forced to resign.
Concerns about oversight and the lack of transparency and competition prompted then-council chairman Vincent C. Gray to put an end to earmarks in 2009.
Among the private organizations that Thompson must reimburse are the Consumer Health Foundation, the Morris and Gwendolyn Cafritz Foundation and the Washington Post Company.
After the hearing, Thompson said his boxing center is closed but that he continues to stay in touch with many of the young people he mentored.
Thompson’s attorney Troy W. Poole declined to elaborate on how his client had or would cooperate with any other government investigation.
“He has accepted responsibility, and he’s moving on,” Poole said.
Thompson’s sentencing is set for Oct. 9.
Mike DeBonis contributed to this report.