According to Barnes, Wells tried to back out on the day of the robbery, refusing to put on the collar-bomb after realizing it was real. Another plotter then fired a single shot from a gun, scaring him into putting it around his neck.
Barnes, 54, could be sentenced to life in prison, but his attorneys hope he will get a lighter sentence in exchange for his cooperation.
Defense attorney Alison Scarpitti said her client played a minimal role in the plot. In court, Barnes admitted he was one of the lookouts at the bank and that he told one of his accomplices how to build a pipe bomb.
The investigation into the convoluted scheme began when Wells, 46, walked into a PNC Bank branch on the outskirts of Erie on Aug. 28, 2003, with a pipe bomb locked onto his neck. He presented a teller with a note demanding money and walked away with about $8,700.
Wells was cornered by police a short time later and told officers the bomb had been put on his neck at gunpoint. It exploded, killing him, as police waited for a bomb squad to arrive.
Prosecutors have concluded Wells was an active member in the scheme at first, but was coerced as the plot unfolded. His family insists he was an innocent victim.
Barnes told authorities that he and Wells had discussed the plan with the scheme's mastermind and her boyfriend, prosecutors told the judge.
Prosecutors previously said Wells had his neck measured for the bomb, which he thought would be fake. In court on Wednesday, they said Barnes told investigators that on the day of the robbery, Wells realized the bomb was real and refused to put it on - until one of the plotters fired a gun.
Prosecutors also said Wells lied to the police officers who caught him, telling them he had been abducted by a group of black men even though all the alleged plotters were white.
Last year, federal authorities announced charges against Barnes and the woman they labeled the ringleader, Marjorie Diehl-Armstrong. A federal judge recently ruled Diehl-Armstrong is mentally unfit to stand trial, a decision that could be changed depending on how she responds to treatment.
Prosecutors said Diehl-Armstrong, 59, was angry with her father about an inheritance dispute and wanted to rob a bank to raise money to pay Barnes to kill him. Barnes told investigators he was to get a $100,000 down payment and be paid $200,000 to kill her father.
Diehl-Armstrong is currently serving a seven- to 20-year prison sentence for killing her boyfriend, 45-year-old James Roden, to keep him silent about the bank robbery scheme. She pleaded guilty but mentally ill in that case.
An ex-boyfriend, William Rothstein, got two timers from Diehl-Armstrong for the time bomb and called in a phony pizza order used to bring Wells to a secluded dead-end road, according the indictment. Rothstein has since died of cancer.
Wells told police officers that, when he got to the secluded area, he was confronted by the group of men and forced to put on the bomb.
In his car, investigators found a gun resembling a cane and a nine-page handwritten letter that included detailed instructions on what Wells was to do with the bank money and how he could unlock the collar-bomb by going through a kind of scavenger hunt, looking for clues and landmarks.
Prosecutors on Wednesday said the bomb was built in such a way that it would have been impossible to remove without detonating it. They said they are still unsure who built it.
Diehl-Armstrong's attorney, federal public defender Thomas Patton, has declined to comment on Barnes' guilty plea.
Barnes might testify against Diehl-Armstrong, according to his lawyer. He is to be sentenced Dec. 3.
U.S. Attorney Mary Beth Buchanan called Barnes' plea "a significant step toward closure." She called the bank robbery "one of the most bizarre crimes ever committed in western Pennsylvania."