By Jonathan Stempel

(Reuters) - This story is about a less-than-royal flush.

A North Carolina man pleaded guilty on Thursday to charges he brought counterfeit chips to an Atlantic City, New Jersey poker tournament in a scheme discovered after he flushed $2.7 million of the chips down a toilet in his hotel room.

Christian Lusardi, 43, of Fayetteville, could face five years in prison at his Oct. 22 sentencing after pleading guilty to trademark counterfeiting and criminal mischief before New Jersey Superior Court Judge Bernard DeLury in Atlantic County, authorities said.

Lusardi's lawyer Steven Nelson did not immediately respond to requests for comment.

The chips were discovered on Jan. 16, 2014, two days after the Borgata Casino in Atlantic City began hosting its "Winter Poker Open," where Lusardi was a participant and where $800,000 of fake chips with a bogus Borgata trademark had been used.

Authorities said Lusardi, fearing he might be caught, flushed more than 500 fake chips down the toilet in his room at the nearby Harrah's Casino Hotel, clogging a pipe and causing a leak in the sewer line in two adjoining rooms.

State gaming authorities canceled the tournament on Jan. 18, 2014, when another 22 fake chips were found in a clogged toilet in a Borgata men's room.

"When you gamble on a flush in high-stakes poker, you either win big or lose big," Rick Fuentes, superintendent of the New Jersey State Police, said in a statement. "Lusardi lost big."

Lusardi must also pay Borgata $463,540 for lost tournament revenue, and Harrah's $9,455 for plumbing damage. He was sentenced in March to five years in prison in a separate case involving DVD bootlegging.

(Reporting by Jonathan Stempel in New York; Editing by Andrew Hay)