Edward Putnam, 47, pleaded guilty to benefits fraud Tuesday, The Sun reported.
Putnam admitted he applied to the Department of Work and Pensions to have his disability benefits reinstated not long after his 5-million-pound ($7.25 million) win in 2009. He had lost his benefits before he won the jackpot when he failed to report for a medical examination.
In his letter, Putnam claimed he was about to be evicted and surviving with the help of relatives and friends. He received about 13,000 pounds ($20,000) from the state.
Putnam made the mistake of paying cash for council housing. Investigators discovered he had a bank account where his lottery winnings had been credited.
Tuesday's hearing was in St. Alban's Magistrate's Court. Magistrate Georgina Palmer said sentencing would be later this month in Crown Court, saying "our power is not sufficient" and suggesting she wants Putnam to get a substantial prison term.
To add to his legal troubles, the woman he raped in 1991 when she was 17 is planning to sue him.
"He made me go through the ordeal of giving evidence," she told the Sun. "He is a brazen psychopath. There was no remorse, no shame. I'd like to see him penniless."