A Winnipeg woman convicted of stealing thousands of dollars of donations to her critically ill teenage niece will not be going to prison.

While prosecutors had asked a judge to sentence Sheryl Matheson to a year behind bars after she was found guilty earlier this year, a judge handed her a 12-month conditional sentence on Friday.

“Nobody won here today,” an emotional Matheson told CTV Winnipeg after the sentence was announced. “We lost a beautiful girl and I'm going to miss her so much."

In 2009, Winnipeg teen Jessica Bondar was critically ill and in need of a heart transplant. Matheson soon set up a shared bank account where thousands of dollars in fundraised cash would go to help her niece. Bondar, however, later discovered that virtually all of the money -- some $25,000 -- had been taken from the account.

"I'm going through a hard time right now,” Bondar told CTV Winnipeg before her death in 2011. "I want my money back."

In March, Matheson was convicted of theft and fraud. On Friday, Crown attorney Mandy Ambrose described the crime as an “egregious breach of trust, requiring a significant custodial sentence” and asked for Matheson to be sentenced to a year in jail. But Matheson’s lawyer, Greg Bauman, told the judge that “a conditional sentence is not a lenient order” and that “if you sentence Ms. Matheson to a conditional sentence, she will be under a microscope. She will not get away with not abiding by the conditional sentence order.”

In the end, Justice James Edmond agreed, saying that, “there is no evidence she is a danger to the community. Quite the opposite… I am satisfied a 12 month sentence served in the community is appropriate.”

Matheson had previously apologized in court.

“I believe she would forgive her aunt for her conduct,” Edmond said of Bondar -- something that Matheson believes as well.

"Jess was like one of my kids,” Matheson said on Friday. “And we'd be hugging right now and she'd be saying, ‘Auntie, don't cry.’"

As part of her sentence, Matheson must also abide by a curfew, complete 150 hours of community service and pay nearly $9,000 in restitution to two Winnipeg hospitals.

With a report from CTV Winnipeg’s Jon Hendricks