Virginia Prieto Kelly of San Diego is president of the Latino Foster Parents Association.
Her attorney said she may have been overwhelmed by the quantity of toys, but that she did not intend to profit from the items.
Investigators testified during a two-day preliminary hearing that they found thousands of new, unopened toys at three South Bay locations, with an estimated value of around $200,000.
The gifts came from holiday drives by Marine Toys for Tots, the Child Abuse Prevention Foundation and similar groups so children living in foster homes could receive Christmas presents.
"Mrs. Kelly was not a recipient of the toys," but more of a "middle person," and Toys for Tots had an expectation that the donated items would be given away quickly, said Judge Margie Woods.
Instead, Kelly kept an "inordinate amount" of the gifts, which was "not expected, consented to" by Toys for Tots, she said.
Three people told investigators that toys were sold, but apparently not very many, the judge said.
District Attorney's Investigator Scott Young testified that he went to Kelly's house in January to discuss the allegations, but the defendant denied keeping toys in her residence.
Young said he later watched as the defendant and others loaded boxes and large bags from the home into cars, which he then followed to a storage facility in Chula Vista.
Two weeks later, he served a search warrant at the facility and found nearly 2,000 toys. The locker had been rented right after his January visit to the house, he said.
"I saw basically a 10-by-20-foot area with trash bags filled with toys -- on the right side they were nearly to the ceiling," Young said. "On the left side there were packaged toys about 5 to 6 feet high. It was filled."
Even more toys were found in other locations, according to investigators.
On a table in front of the judge's bench were dolls, a Nintendo DS game system, a soccer ball, puzzles and other children's toys.
Defense attorney Tom Matthews conceded that the amount of toys was "overwhelming" but there was still no crime committed.
The Latino Foster Parents Association "at most wasn't properly managed," Matthews said.
When interviewed by investigators, Kelly insisted that she planned to distribute the presents, the lawyer said.
Kelly was "a woman who is getting on in years, taking on a little more than she could handle," Matthews said.
The head of a similar organization said Kelly was a respected leader of the local foster parent community.
She faces four years in state prison if convicted.
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