A Manitoba woman convicted of stealing $16,000 from her critically ill niece's charity fund has been spared jail and handed a one-year conditional sentence to be served in the community.

Sheryl Matheson, 44, was convicted of one count each of fraud over $5,000 and theft over $5,000 following a trial last year.

Matheson's niece, Jessica Bondar, died in April 2011 while awaiting a heart transplant. She was 19.

"I never had a chance to say goodbye [to Jessica] and I have to live with that forever," Matheson said in a tearful address to court Friday. "I'm sorry, I beg for forgiveness and I know in my heart I would never do anything like that again."

Jessica Bondar died in April 2011 while awaiting a heart transplant. She was 19. (CBC) Bondar was living with Matheson and her family in Winnipeg in 2009, finishing high school, when her health started to fail.

Matheson spearheaded a fundraising drive to cover medical expenses not covered by health insurance. More than $26,000 was deposited into a de facto trust account in Matheson's and Bondar's name.

Prior to her death, Bondar provided a video police statement from her hospital bed alleging Matheson had drained the account of all but $62.

Prosecutors had recommended Matheson be sentenced to one year in jail, calling her actions an "egregious breach of trust."

Family has forgiven Matheson

Matheson and her husband now live in Sherridon, Man. — roughly 65 kilometres northeast of Flin Flon — where they operate a small hotel and fishing lodge.

Court was provided with more than a dozen letters of support, describing Matheson as an honest and caring person and a tireless community volunteer.

Justice James Edmond described Matheson's actions as "reprehensible," but said he was satisfied she was truly remorseful and did not pose a risk to the community.

Family members, including Bondar's mother, Charlotte Roy — who is Matheson's sister — have since forgiven Matheson.

If Bondar were alive, "I believe she would have forgiven her for her conduct," Edmond said.

At trial, court heard evidence Matheson transferred $2,000 from the trust fund into her own account, wrote cheques from the account to her husband totaling $7,000, and withdrew $6,700 to pay an advertising bill from her place of work (which was later refunded).

Matheson testified at trial all money withdrawn from the trust account was ultimately spent on expenses related to Bondar's care.

'I needed somebody to hurt': mother

Matheson said she withdrew thousands of dollars from the account to pay expenses for Roy and her husband after they moved to Winnipeg from Montreal to be with Bondar.

"They asked for money they say they needed," Matheson testified last year. "The money was raised for them, it wasn't up to me to dictate what they got."

But other withdrawals, including $270 in debit expenditures incurred during a family trip to Regina, had no apparent connection to Bondar's care.

Roy accused Matheson of stealing from the account, but later came to believe she had done nothing wrong.

"I was under an extreme amount of stress, I was an emotional mess," Roy wrote in a victim impact statement provided to court. "I was convinced this crime happened at the time. I needed somebody to hurt because I was hurting."

Roy blamed prosecutors for putting her family through a six-year legal ordeal.

"No family should have the Crown force them to relive the death of their child over and over," Roy said. "I have been hurt more than I can say, not by my sister, but by the system."

Edmond sentenced Matheson to an additional one-year supervised probation and ordered that she pay $9,000 in restitution.