But none of that money had been invested and some early investors had been repaid with monies received from later clients.
Milne had a client base in Dunedin derived from his previous legal work in a sole practice there.
He operated the scheme from 1991 to 2012, and the charges relate to a $2.8m.
The court heard today that there have been losses of around $2m, but as he entered his pleas, Milne said that some of that money has been paid back.
A complaint to the SFO was received from the New Zealand Law Society Otago Standards Committee regarding Milne's activities around client funds in June 2012.
In April last year, a Lawyers and Conveyancers Disciplinary Tribunal decided to strike him off its roll of barristers and solicitors.
Standards committee lawyers argued he was not a fit and proper person to be a lawyer and should be struck off.
The tribunal panel agreed, concluding after a short hearing that Milne had breached trust and fundamental obligations of a lawyer, causing substantial stress to clients.
New Zealand Law Society President Chris Moore said the alleged gross abuse of trust was "reprehensible".
In 2012, Dunedin solicitor Alistair Paterson launched an "affected persons' register" to collate the names and extent of loans made to Milne.
Milne was adjudged bankrupt in the High Court at Christchurch in November 2012.
He had his own Dunedin legal practice from 1960 until it was bought out by another local law firm, Craig Paddon Law, in 2008.
He worked in their Christchurch office from 2008, but left in June last year.
The SFO said Milne's scheme involved him eliciting money from clients or associates on the premise that he would invest that money and pay them a return on their invested funds.
"Mr Milne's activity had hallmarks of a Ponzi scheme as he had in fact been paying investors from funds received for investment from other clients. Mr Milne had not actually invested any of his clients' money," an SFO statement said today.
SFO director Julie Read said clients who trusted Milne were keen to be involved with a scheme that paid such good returns.
"Mr Milne's victims were vulnerable, and although there is a sense of relief that he has pleaded guilty, for many it is too late to recover from the impact of his dishonesty," she said.
