His chips are all gone. Financial fraudster Andrew Caspersen finally threw in his hand Wednesday. The former Wall Street executive pleaded guilty to defrauding family and friends out of more than $38 million in a Ponzi-like scheme to feed what he called "a gambling addiction that was all consuming" as he sat in a courtroom in U.S. District Court in lower Manhattan. The addiction, his lawyer has said, led Caspersen to lose a staggering $123 million by compulsively speculating on put options in the S&P 500 index from February until his arrest in March. Caspersen's crimes could send him to prison for a decade or more when he is sentenced Nov. 2. But the judge who accepted his plea suggested he was skeptical of federal sentencing guidelines that suggest a term of between about 12 and 16 years.

Andrew Caspersen arrives for a hearing at the U.S Federal Courthouse in New York, July 6, 2016. Brendan McDermid | Reuters

Caspersen, the 39-year-old son of the late Beneficial Corp. CEO Finn Caspersen, appeared unemotional while the judge asked a series of routine questions after the plea hearing began. Watched by family from the courtroom gallery, Caspersen calmly stated he had entered a mental hospital for 16 days after his arrest in March, where he was treated for gambling addiction, alcohol [abuse], depression, and general mental health issues." But the married dad of two young kids immediately choked up when Judge Jed Rakoff invited him to explain what he had done criminally. "Judge, I did all this knowing it was wrong. Virtually all the money I fraudulently obtained and more than $20 million of my own money was gambled away," Caspersen said. "The people I harmed were people I cared for the most. I could not be more sorry or ashamed for my crimes."

Caspersen, a graduate of Harvard Law School and Princeton University, tapped classmates as part of his scheme. He even scammed the family of his former fiancee, Catherine "Cat" McRae, an employee of Fred Alger Management who died in the Sept. 11, 2001 terror attacks on the World Trade Center, according to Caspersen's lawyer. Explaining why he was guilty of securities fraud, the first count to which he pleaded, Caspersen told Rakoff that between November 2014 and March 2016, he had "defrauded numerous people out of more than $38 million." "The fraud was simple: I told family members and friends that a private equity firm had given me an allocation in a practically riskless debt instrument, and I offered them the opportunity to invest with me. I said that the debt instrument carried an interest rate of 15 to 20 percent," Caspersen said, at times haltingly.

But in reality, said Caspersen, "there was no real investment opportunity." "It was just a way for me to get money to feed a gambling addiction that was all consuming at the time," he said. Explaining why he was guilty of the second criminal count, wire fraud, Caspersen said that between July and November of 2015, he had defrauded his employer, Park Hill Group, out of "more than $8 million by inducing two firms that owed Park Hill money to send it to an account that I controlled." "I created phony invoices to lead the two firms to think that they were paying Park Hill for services rendered, when, in fact, the money was going to me for my gambling," Caspersen said. "I eventually paid Park Hill back the $8 million that I diverted, but I did so with money obtained from the fraud described in Count One," Caspersen said.