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SACRAMENTO — Former Deputy Insurance Commissioner George Grays, accused of keeping $170,900 from a state insurance department fund, pleaded guilty Tuesday to mail fraud and money laundering charges. 

Grays, charged Tuesday morning, was the only person prosecuted so far in a Northridge earthquake-related scandal that drove him and elected Insurance Commissioner Chuck Quackenbush from office last year. 

Prosecutors say Grays personally benefited from his control of the California Research and Assistance Fund, a foundation created by Quackenbush with about $12 million in insurer settlement money. 

Quackenbush let a half-dozen insurers accused of mishandling claims filed after the 1994 Los Angeles earthquake escape up to $3 billion in fines by contributing to the fund. He has acknowledged that though the fund was supposed to finance earthquake research and assist consumers, none of the $6 million it spent went for either purpose. 

Grays inappropriately directed $263,000 from CRAF to Skillz Athletic Foundation, then received $170,900 back from Skillz in a kickback scheme, prosecutors say. Skillz ran a sports camp attended by Quackenbush’s children. 

Grays pleaded guilty to two counts of mail fraud and one count of conspiracy to commit money laundering, charges that together carry a maximum penalty of 30 years in prison and roughly $1 million in fines. 

He is cooperating with state and federal investigators, who continue probing the creation and use of the fund, defense attorney Bill Portanova said. 

U.S. District Judge David Levy released Grays on his own recognizance pending sentencing April 12. Grays declined to comment to reporters at the federal courthouse in Sacramento. 

An Assembly committee investigating the creation of CRAF found that the idea to divert the insurers’ donations to CRAF and other nonprofit funds came from Grays. There is evidence “Mr. Grays actually controlled and ran CRAF,” frequently from his insurance department office next to Quackenbush’s, the Assembly Insurance Committee said in an August report. 

Grays resigned in April. He refused to answer questions at an Assembly committee hearing, invoking his Fifth Amendment protection against self-incrimination. Quackenbush, one of only two Republicans to hold statewide office in California, resigned in July under threat of impeachment. He and his family later moved to Hawaii. 

Quackenbush has denied wrongdoing, but admitted that none of CRAF’s spending went to the earthquake research and consumer assistance it was supposed to finance. 

Instead, it paid for ads featuring the elected commissioner – which critics said were intended to raise his profile for a potential run for governor – and donated to charities with no connection to quakes, including the Skillz Athletic sports camp attended by his children.