BIRMINGHAM, Alabama - Gayle Cunningham, the former executive director of the Jefferson County Committee for Economic Opportunity, should have learned a lesson about the consequences of using agency money for personal gain after she helped former county commissioner Jeff Germany divert funds from the agency a decade ago, federal prosecutors say in a court document this week.

Germany was convicted and sent to federal prison for using social service agencies, including JCCEO with the help of Cunningham, to gain access to thousands of dollars in taxpayer money for personal gain.

Now, eight years after Germany was charged, Cunningham is set to be sentenced March 26 by U.S. District Court Judge Scott Coogler for her guilty plea in the theft of nearly $500,000 from JCCEO. Her charges are unrelated to the Germany case.

In a court document filed Wednesday federal prosecutors recommend Cunningham be sentenced to about two years in prison for her guilty plea to the theft. The recommended sentence is below sentencing guidelines for her crime because of her cooperation and acceptance of responsibility, federal prosecutors say in a court document filed this week.

But prosecutors quickly add that Cunningham's recent claims that former JCCEO board chairman T.L. Lewis, knew of her plan to make mortgage payments with JCCEO money calls into question whether she has really accepted responsibility for her actions. The Rev. Lewis denied those claims to federal authorities, according to another court document filed with the memorandum.

So if the court finds Cunningham hasn't accepted responsibility, prosecutors say they recommend a sentence in the 30-month to 37-month range.

Cunningham's daughter Kelli Caulfield, was sentenced to home detention and probation in the case. Two other men, Robert Paul Hollman and Brad Bozeman, also were charged in a mortgage fraud investigation that had triggered the investigation into Cunningham. Bozeman was sentenced to home detention and probation. Hollman, a former director of youth services for the city of Birmingham, is to be sentenced April 2.

Assistant U.S. Attorney Robin B. Mark filed a 22-page sentencing memorandum Wednesday to Judge Coogler recommending the possible sentences.

Mark tells the judge that one factor in the sentencing is that similar crimes deserve similar time. "Unfortunately, in this community there are several examples of similarly situated cases," according to the memorandum.

The only case highlighted by Mark is the Germany case.

Germany was sentenced to 43 months in prison and was released in 2009.

Cunningham was a witness at Germany's trial, the prosecutors note in their sentencing memorandum. CCEO contracted with the Jefferson County Commission to oversee the administration of certain money for youth service programs. Germany directed that JCCEO issue checks out of the JCCEO account to a list of individuals. "Cunningham was complicit in the scheme by using her $5,000 check signing authority to execute checks as directed by Germany," according to the prosecutors' sentencing memorandum.

"By using her authority to personally sign checks and failing to report to the County regarding the use of funds, she aided Germany in stealing funds from youth service programs for his personal gain," according to the prosecutors' memorandum. "The fact that Cunningham was a witness to the charges in the Germany case should have made an impact on Cunningham. To the contrary, two years after her testimony in the Germany trial, she violated the exact same statute when she used the JCCEO general ledger and her $5,000 check signing authority to pay personal debts."

The personal debts were mortgage payments on homes owned by Cunningham and her daughter.

Cunningham's attorney, Tommy Spina, said that Cunningham was a witness for the government in the Germany case "and had no culpable criminal involvement whatsoever" in Germany's conduct. "She was embraced by the government and used by the government to prove their case against Mr. Germany in a trial setting. You can be sure if she was "complicit" in the activities of Mr. Germany , over 8 years ago, as she would have been charged along with him.

The government has recommended a downward departure based on Ms. Cunningham's substantial assistance in the prosecution of others in this case. We are hopeful the judge will impose a sentence that lies somewhere between "exacting a pound of flesh " and " a slap on the wrist". We are hoping a sentence will be imposed that tempers justice with mercy."

FBI agents came across the theft by Cunningham of JCCEO money while investigating the mortgage fraud case against Hollman, according to court documents. Agents found the submission of false loan applications on multiple properties by Cunningham, Caulfield, and others, all of whom were buying properties from Hollman.

According to the sentencing memorandum, Cunningham and Caulfield bought multiple homes in Jefferson and Shelby Counties from Hollman. In exchange, Hollman entered into a fraudulent verbal agreement with Cunningham and Caulfield to pay the closing costs and the monthly mortgage payments until the properties were later resold. The agreement was not disclosed to the financial institutions that made the loans.

At a one point Hollman stopped giving Cunningham and Caulfield money to make the monthly mortgage payments. Cunningham made loan payments for a short period before she began stealing money from JCCEO to make the monthly mortgage payments, according to the sentencing memorandum.

But prosecutors say Cunningham should have known better.

"Cunningham and her daughter have improperly characterized themselves as victims in the transactions with Hollman," the memorandum states.

But Cunningham is "a highly educated, sophisticated individual" who has also bought real estate before, the sentencing memorandum states. She was responsible for making the mortgage payments regardless of what Hollman did, according to the memorandum.

The sentencing memorandum notes that Cunningham's sentencing memorandum filed a few weeks ago states that she spoke with Lewis on several occasions about using the agency's Housing Revitalization Program funds to pay her personal mortgages.

Lewis told agents that "under no circumstances were Cunningham or her daughter authorized to make personal mortgage payments using JCCEO funds." Also, at no time during a meeting in March 2013 with Lewis and the board's attorney did Cunningham state or imply that Lewis or the board had given her permission to use JCCEO funds. Lewis filed a statement with federal authorities attesting to that.

"Cunningham's statement that she had approval from the Chairman of the Board is a completely self-serving statement that is unsupported by the evidence," according to the federal prosecutor memorandum. "These attempts by Cunningham to legitimize her actions and mitigate the need for a custodial sentence by pointing the finger at Dr. Lewis are contrary to the facts and evidence and furthermore are contrary to her acceptance of responsibility."

Prosecutors also contend in the memorandum that they and the JCCEO board had not previously seen a document submitted by Cunningham with her recent memorandum. That document purportedly pledged the homes to the agency as part of the housing program.

Cunningham also has tried to legitimize her fraud by claiming she was concerned about potentially harming JCCEO's credit rating, the federal prosecutor memorandum states. "Cunningham's claim that she did this to avoid harming JCCEO's credit is just another attempt by Cunningham to color her responsibility."

Cunningham has already paid back the money that was taken. But prosecutors countered her claims that she always intended to pay back the funds to JCCEO. Until she was confronted with the fraud she had only made one small reimbursement of just over $9,000, according to the prosecutors' memorandum.

"The offense conduct is a serious offense because it directly impacts the community. At the same time Cunningham was being showered with accolades, benefits, and praise for her work at the JCCEO, she was stealing funds which could have been used for community programs," the prosecutors' memorandum states. "The much needed programs which suffered as a result of Cunningham's theft of funds included training programs, Head Start buses and computers in classrooms."

Cunningham's request for probation and home detention is not enough, the prosecutors argue.

"Given the Defendant's position of authority and blatant abuse of a position of trust, deterrence is an important factor in this case. The Defendant was so well respected and trusted by the Board of Directors that the Board gave her broad discretionary powers," the prosecutors' memorandum states. "The Board rewarded her with salary raises and bonuses while at the exact same time she was fraudulently diverting funds for personal use without their knowledge. This type of abuse of trust and misuse of federal funds is unacceptable."

Spina stated in an email Wednesday that she has "fully accepted responsibility for her actions and continues to do so. This is evidenced not only by her plea of guilty early on in this case, her cooperation with the government in the prosecution of others and the 100 per cent pay back of all money misappropriated."

"Nothing in Ms. Cunningham's sentencing memo was said to suggest that she was not responsible for what she did, we only suggest that there is more to her life and what she contributed to JCCEO over the years than the acts which make the basis of her guilty plea," Spina stated in an email response. "She, as a person, should not be defined by this act."