In a statement read by her attorney after accepting a plea agreement that could send her to prison for up to five years, she said she accepts full responsibility for her actions.
"I am deeply remorseful, and I apologize," she said.
Prosecutors allege the couple engaged in more than 30 illegal transactions totaling more than $200,000 between 2010 and 2016. The spending included money for trips to Italy, Hawaii and Las Vegas, and expensive dinners, as well as more mundane items like shirts and tequila shots.
The improper spending occurred when the couple knew their household budget was in tatters and they were being charged tens of thousands of dollars for overdrafts and credit card fees, authorities said.
In her plea agreement, Margaret Hunter said she would help the prosecution and testify on their behalf. She also agreed to provide documents.
Duncan Hunter said in a statement emailed to The Associated Press that political reasons prompted the U.S. Justice Department to pressure his wife to testify.
The congressman, a close ally of President Trump, said after he was indicted last year that the Justice Department was "the Democrats' arm of law enforcement."
He said Thursday that the case should have been handled by the Federal Elections Commission and alleged that U.S. prosecutors indicted him and his wife ahead of the November elections "to inflict as much political damage as possible in hopes of picking up a congressional seat."
"It was politically motivated at the beginning. It remains politically motivated now," he said.
Margaret Hunter is set to be sentenced Sept. 17. Her husband's trial is set for Sept. 10.
The congressman's attorney, Gregory Vega, told the San Diego Union-Tribune that Margaret Hunter's decision should have no impact on his client's case.
But former U.S. prosecutor Jason A. Forge said it's rare for one spouse to plead out when the other's case has not been resolved. Her testimony could strengthen an already strong case, he said. Forge prosecuted California Rep. Randy "Duke" Cunningham, who resigned from Congress in 2005 and served more than seven years in prison for one of the worst bribery scandals to ever bring down a federal lawmaker.