Smith also admitted she mailed a false campaign finance statement to state election officials while running for her Senate seat in 2002.

Federal prosecutors allege Smith had given her campaign $15,000 illegally siphoned from her businesses, then concealed it as contributions from various individuals.

Smith's husband also pleaded guilty Tuesday. Mark Smith admitted to a tax fraud charge involving $63,000 in withholding taxes due in 2004 from the health care companies.

The Smiths had faced a 17-count indictment in the case. The charges also included tax evasion and tax fraud counts against them both, alleging nearly $1 million in unpaid withholding taxes, as well as campaign-related mail fraud counts against the former legislator.

Each pleaded guilty as part of separate agreements with prosecutors. Though court officials have yet to calculate the punishment recommended under federal sentencing guidelines, their plea agreements suggest prison terms of up to five years each as well as fines.

The couple remains free on bail pending a Nov. 5 sentencing hearing.

Lisa Smith had served two terms in the House of Delegates when she challenged and defeated then-Senate Finance Chairman Oshel Craigo, D-Putnam, in a 2002 election upset. She resigned the Senate seat in December 2004, citing an undisclosed illness.

The Smiths were indicted in early 2006. The case was delayed after Lisa Smith was found mentally incompetent to stand trial. She received treatment at a Federal Bureau of Prisons facility, and U.S. District Judge Robert C. Chambers declared her competent in late March.

Lisa Smith remains in a doctor's care and relies of various medications for her mental health, Chambers was told Tuesday.