Kate McClure, 28, appeared in court Monday where she pleaded guilty to second-degree theft by deception. She faces up to four years in prison at her June sentencing.
McClure, along with her then-boyfriend Mark D'Amico and homeless veteran Johnny Bobbitt, was accused of fabricating a feel-good story about Bobbitt coming to McClure’s aid when she ran out of gas along the highway and gave her his last $20.
In November 2017, McClure and D'Amico allegedly created a page on GoFundMe's website detailing how Bobbitt acted as a "good Samaritan" and rescued McClure.
The website said that any donated funds would be used to get Bobbitt off the street and provide him with living expenses. The New Jersey couple set a goal of $10,000.
But in truth, McClure's entire story was bogus and Bobbitt never spent "his last $20" helping McClure, prosecutors said.
Instead, McClure and D'Amico allegedly conspired to create the false story, authorities said. After the story went viral, approximately $400,000 was donated from more than 14,000 donors in just a matter of weeks, officials said.
Bobbitt was informed of the scheme in mid-November 2017, when the donations had reached approximately $1,500, officials said. The following month, McClure and D'Amico deposited $25,000 of the proceeds into Bobbitt's account, authorities said.
While all of the money was supposedly going to help Bobbitt, prosecutors said the majority of the donated funds was quickly spent by D'Amico and McClure on personal expenses including purchasing a BMW, expensive handbags, vacations and other personal items.
Their tale inspired thousands, but things began to unravel when Bobbitt accused McClure and D’Amico of stiffing him out of the money, causing an investigation to be launched.
All three were later arrested for the scheme.
Bobbitt, 36, pleaded guilty to one federal count of conspiracy to commit money laundering in March. He faces up to 10 years in prison on that charge. Bobbitt also received five years' probation as part of a plea deal for state charges related to this incident.
McClure has already pleaded guilty to one federal count of conspiracy to commit wire fraud and faces up to 20 years in prison on that charge. She will be sentenced in the federal case on June 19.
D'Amico, who was not charged with any federal crimes, has pleaded not guilty to state charges of theft and conspiracy. He has denied the allegations.
ABC News' Aaron Katersky and Meghan Keneally contributed to this report.