A former manager at Mellon Bank received one year probation yesterday for lying to federal agents about what she knew regarding the bank's 2001 tax-shredding case.

But U.S. District Judge Gary L. Lancaster refused to impose any other penalties saying that Lynn Kling should have been given pretrial diversion, a program similar to probation, that, if successfully completed, would have allowed the charge against her to be dismissed.

"For reasons unclear, the government chose not to pursue that path," Judge Lancaster said.

Instead, Ms. Kling is now a convicted felon. She pleaded guilty May 19 to one count of making false statements.

Back in 2001, Ms. Kling was the project manager at Mellon Bank's lockbox, a processing facility for tax returns being filed with the IRS from across the northeast.

As the April 29, 2001, deadline for processing the returns approached, managers in the center realized there was no way they'd be able to get to all the filings. At first the returns were hidden, but later, employees shredded them -- more than 77,000 in all.

At previous hearings, Assistant U.S. Attorney Margaret Picking said that Ms. Kling, along with another manager, Denise Philpott, were the ones who gave the order to destroy them.

However, in the criminal information filed against her, the charge simply says that Ms. Kling made false statements by saying "that she had no firsthand knowledge of what happened to the missing items; that she had not heard any rumors as to what had happened to the items; and that she could offer no explanation why anyone would remove checks and tax returns in the numbers reports."

Ms. Kling, 59, told the judge that she was sorry that she wasn't more forthright with agents when they arrived at her home in the evening of July 16, 2001.

"It felt more like an interrogation than questions," she said. "I didn't know I had a right to ask them to leave. My intention was not to deceive anyone, only to protect myself."

Ms. Picking asked that Ms. Kling receive a fine, since she was the project manager at Mellon and had a moral obligation to tell the authorities about the crime that had been committed.

But Judge Lancaster refused, saying, "I find the circumstances of this case are exceptional, and therefore no fine or community service will be imposed."

In all, eight former employees have been charged in the incident. Four have pleaded guilty, and four still have their cases pending.

Those who have been sentenced thus far have all received probation. Ms. Philpott was ordered to serve three years probation, including six months home confinement, as well as perform 100 hours of community service.

Mellon agreed, as part of the federal investigation, to pay $18.1 million to cover the costs for interest lost from the time the checks were shredded to when replacements were sent, as well as the cost to move the processing contracts. This past June, Mellon Financial Corp. also agreed to pay $16.5 million to cover civil damages and penalties from violations of the False Claims Act.