The founder of a Philadelphia charter school and her sister, both of whom had pleaded guilty to covering up the theft of more than $14,000 in taxpayer funds, were spared time in federal prison yesterday.

Martha Russell, founder of the former Raising Horizons Quest Charter School, and Viola Bush, the former chief financial officer, were sentenced to five years' probation.

U.S. District Judge Petrese B. Tucker ordered the women to make restitution of a total of $24,282, placed them on house arrest for six months, and directed them to perform 250 hours of community service.

Both women had pleaded guilty in October to two felony charges of conspiracy and altering credit-card documents in 2006 to cover up their use of taxpayer money for personal expenses, including restaurant meals, gasoline, travel, and alcohol.

They had faced possible maximum sentences of 25 years in prison, although federal sentencing guidelines suggested a range of 10 to 16 months.

"Make no mistake: This was a serious offense," Tucker said.

But in imposing a sentence below the minimum guidelines, the judge said she had weighed several factors, including the fact that the women had admitted their guilt and had no prior records.

Tucker said she also considered the comments and character references of more than 40 friends, relatives, and supporters who crowded into the courtroom yesterday to describe the women's long history of work on community and educational projects.

"I don't think it's necessary to put either one of you in custody to send a message," Tucker told Russell, 54, and Bush, 51.

"Oh, thank, God!" said Thelma Williams, a retired Lower Merion educator who had testified on the women's behalf.

Tucker noted that she had been reading newspaper accounts of alleged financial wrongdoing at several other city charter schools. She added: "I hope the regulation and the supervision increases to the point where our children are not being jeopardized."

Assistant U.S. Attorney Michelle Morgan-Kelly had asked the judge to send Russell and Bush to prison for 10 to 16 months because they had stolen money intended for students. "They were having a party with this money," she said.

Morgan-Kelly said that the sentence should reflect the seriousness of the crimes and that the women should not be permitted to "just walk away."

She declined to comment on the sentences Tucker imposed.

Both women yesterday apologized for their behavior. Russell said she had opened the charter school in 2000 with every intention to do well by the children. "There is no explanation for this foolish act," she said

Afterward, she and Bush wiped away tears of relief as they hugged family members and friends.

Luther E. Weaver 3d, who represents Russell, called the sentence "very fair." Jerome M. Brown, Bush's attorney, described it as "well-reasoned and balanced."

The school district's inspector general began investigating Russell's charter school and ordered an audit in 2006 after former employees alleged that public funds were being misappropriated at the elementary school, which has campuses in Northeast and West Philadelphia.

The district turned the findings of that probe over to the U.S. Department of Education for further investigation.

The school - now known as the Global Leadership Academy - receives more than $100,000 in federal funds each year. The charter received $4.9 million from the school district and state and federal governments in 2005-06, according to its nonprofit tax filings.

Three years ago, the district forced all but one of the charter's board members to resign, along with Russell and Bush. A new administrative team was brought in to take over the school.

A federal grand jury indicted the women a year ago.

The case predates a widening federal criminal probe of city charter schools that was launched last spring and now involves at least four charter schools, according to sources with knowledge of that investigation.

Contact staff writer Martha Woodall at 215-854-2789 or martha.woodall@phillynews.com.