When Scott Yoxall was questioned by police he said he had no money at all and had not received benefits for more than 18 months.
But officers found £14,040 cash in bundles, plus heroin worth thousands of pounds in a flat he used in Bridge of Allan, Stirlingshire.
Advocate depute Andrew Brown QC told the High Court in Edinburgh that after police received intelligence reports on Yoxall, 22, he was put under surveillance and the flat was searched last August.
Mr Brown said: "A number of drug users in the area confirmed that Yoxall, whom they knew as Sinbad, had been supplying them at least twice weekly, often by taxi."
Yoxall and co-accused Alan Hope, 53, admitted being concerned in the supply of the drug.
The judge, Lord Turnbull, deferred sentence on the pair until next month.