The former leader of the Ku Klux Klan, David Duke, who took his call for "white survival" to Europe, is to be jailed for 15 months after admitting defrauding his supporters and gambling with the money.
Duke plead guilty yesterday to mail fraud and filing a false tax return.
The plea in a New Orleans court came two days after his lawyer said Duke had returned to Louisiana to negotiate with prosecutors after three years abroad.
Until his return late last week, Duke had been lecturing and speaking in Russia and other European countries in what became a crusade for what he called "white survival" against Jews and non-Europeans.
He was accused of filing a false 1998 tax return. The fraud charge accuses him of "obtaining a substantial sum of money" through mail solicitations and misusing the money.
His lawyer, Jim McPherson, said before the hearing that the justice department had been investigating Duke for possible income tax violations involving the £60,000 sale of a list of his supporters to a state politician.
Duke had just started a speaking tour in Russia in January 2000 when federal agents raided his Louisiana home. A search warrant, based on testimony from confidential informants, alleged Duke took hundreds of thousands of dollars he solicited from supporters and gambled the money away at casinos.
Duke, a former Republican state legislator, is accused of gambling away thousands of donations.
As part of the plea agreement, Duke, 52, will be sentenced in March to 15 months in prison, a US district attorney, Jim Letton, said at a news conference. Until then he is free on $10,000 bail.
Duke, a former grand wizard of the Ku Klux Klan, caused a national stir when he traded his white sheet for a coat and tie and, running as a Republican for "white rights", won a seat in the Louisiana house of representatives in 1988.
He came in second in a 1990 race for a US Senate seat and a 1991 race for the Louisiana governorship before slowly fading from state politics.
He left the country shortly before federal agents raided his Mandeville, Louisiana, home in 2000 because of information that he had taken hundreds of thousands of dollars from supporters under false pretences.
After the raid Duke posted a message on his web site saying he was the victim of a racially motivated attempt to silence him. "This probe is nothing more than a political assassination on the part of government officials who are seeking to silence my voice for our European heritage and rights," he said.
Duke was accused of sending letters to supporters from 1993 to 1999 asking for money because he had financial problems and was in danger of losing his home.
"He was lying and exaggerating, ultimately, about his allegedly dire financial situation," Mr Letton said. "Duke admitted in court this [yesterday] morning that he actually used the larger portion of the money he solicited for casino gaming."