Watts worked for Steel for 15 years, handling payroll and accounting and coordinating household and travel expenses.
Authorities say Watts deposited numerous checks made out to "cash" in her own bank account, used the author's credit card rewards points and paid herself more than her salary.
Watts' attorney, Tony Brass, says his client takes full responsibility and regrets her actions.
Steel has sued Watts claiming she defrauded her of $2.7 million. She faces up to 40 years in prison when she's sentenced Feb. 4.
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