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(Updates with quote from Kaufman's lawyer)
By Nate Raymond
NEW YORK, May 21 (Reuters) - A principal at an Ohio investment advisory firm that managed the finances of the National Basketball Association's players union was sentenced on Wednesday to six months house arrest for obstructing a grand jury investigation.
Carolyn Kaufman, the chief compliance officer and second-in-command of Prim Capital Corp, was sentenced after a Manhattan federal jury in December found her guilty of perjury, obstruction and conspiracy to obstruct justice.
She went to trial after Prim founder Joseph Lombardo, 73, admitted to defrauding the union and pleaded guilty in November to mail fraud and conspiracy to obstruct justice.
Federal prosecutors had asked that Kaufman, 73, be sentenced to up to 2-1/2 years in prison.
But U.S. District Judge Jesse Furman said on Wednesday the 110 letters received from supporters including clients showed the crimes were an "abnormality" in her life.
"It's a little bit of a mystery to me how you wound up being here," Furman said at a court hearing.
The judge sentenced Kaufman to three years probation, including six months home confinement, and ordered her to pay a $25,000 fine and perform 500 hours of community service.
Prim, based in Independence, Ohio, was from 2001 to 2013 the primary outside investment adviser for the National Basketball Players Association, assisting in managing up to $250 million of the union's assets.
In 2011, the U.S. Labor Department began investigating the union and then-Executive Director Billy Hunter. After learning the union would make public the results of an internal investigation, Prim turned over a purported five-year, $3 million contract signed by former NBPA general counsel Gary Hall.
Prosecutors said the contract was forged and had been created after Hall's death, but Lombardo and Kaufman testified to the contrary before the grand jury.
Lawyers for Kaufman contended at trial the fake contract was "cooked up" by Lombardo and another Prim employee. They also held that Kaufman did not know it was fake and had no reason to commit a crime and risk her career.
At Wednesday's hearing, Kaufman said she believed she had been "too trusting," and paid a price for her involvement with Lombardo.
"I am truly, deeply and profoundly sorry," she said.
Steven Molo, Kaufman's lawyer, in an email said he was grateful the judge "saw it our way and concluded that no jail time was warranted."
"We are evaluating our options for an appeal of the conviction," he added.
Lombardo, whose lawyer declined comment, is scheduled to be sentenced June 10. Prosecutors have agreed to accept a federal sentencing guideline that would provide for no more than 5-1/4 years in prison.
Hunter was fired in February 2013. Representatives for Hunter and the union declined comment.
The case is U.S. v. Kaufman, U.S. District Court for the Southern District of New York, No. 13-cr-411. (Reporting by Nate Raymond in New York; editing by G Crosse and; Grant McCool)