A federal judge Wednesday defended his decision not to send the CEO of an Illinois computer parts company to prison for her role in bilking Best Buy Co. Inc. out of as much as $42 million.

In a courtroom hearing, Chief U.S. District Judge Michael Davis ticked off more than a half-dozen reasons why he did not regret taking a “huge chance” on Abby Rae Cole when he sentenced her to three years’ probation in December 2010. He complimented her for providing stability for her two school-aged children, taking care of her aging mother and finding work during her time on probation.

The unusual hearing arose after an appeals court called on Davis to “provide a fuller explanation of the sentence” for Cole, who could have faced up to 14 years in federal prison after a jury found her guilty of fraud, money laundering and income tax evasion.

Dressed in a tailored black skirt and jacket, Cole stood before Davis just months after successfully completing the probation sentence for her role in one of the biggest corporate fraud cases in Minnesota history. Her husband, Russell Cole, received a 15-year prison sentence. A Best Buy insider-turned-government witness got 7½ years.

According to the higher court, Davis’ reasons for “the magnitude of the downward variance” were at times “brief and contradictory.”

He was anything but brief and contradictory Wednesday.

Davis fingered Russell Cole as the “mastermind” of the conspiracy, who turned an honest business that Abby Cole launched out of her basement as a single mother into an instrument of greed and fraud.

But he saved his harshest words for the federal prosecutors who, in a unconventional move for the government, appealed Cole’s sentence by Davis to the Eighth U.S. Circuit Court of Appeals, arguing that the punishment was too lenient. The U.S. attorney’s office in Minneapolis had sought at least 12 years in prison for Abby Cole.

“The court was not asleep during the course of the trial, was I?” Davis asked in a string of sarcastic questions to Assistant U.S. Attorney William Otteson, who helped argue the case based on investigations by Best Buy, the FBI, IRS and U.S. Postal Inspection Service.

Looking at Cole, Davis said, “It’s good someone can be rehabilitated, isn’t it?”

With Davis’ multitude of reasons for his decision now on record, the matter will go back to the Eighth U.S. Circuit Court of Appeals, which could take any number of steps, including accepting it or sending it back to Davis for resentencing.

In a monthlong jury trial that ended in June 2010, Cole and her husband were convicted of concocting a scheme that involved changing the bid price on online replacement parts auction run by Best Buy. The Coles’ company, Chip Factory, in one instance bid $69 for a computer screen and then charged Best Buy $1,699 for it.

The couple lived in a $2.75 million mansion in Deerfield, Ill., that Russell Cole once called the “house that Best Buy built.”

Abby Cole wore expensive clothes and diamond bracelets, and the couple took long vacations in Las Vegas. Russell Cole amassed luxury sports cars, including a 2003 Ferrari Enzo.

Best Buy employee Robert Bossany was paid off with a motorcycle and wads of cash totaling as much as $100,000 during the scheme, which lasted from June 2003 to August 2007, when a Best Buy employee discovered it.

The cars and some of the property have been sold, and about $14 million in funds have been recovered, Otteson said.

Cole’s lawyer said she had never missed a $300 payment, part of her restitution, and had done hundreds of hours of community service.

Davis said the sentence would be an adequate deterrence to future criminal conduct and he is “confident” she will stay out of trouble. While she was “legally responsible” for the crimes, Davis believed she was mostly a passive participant.

He ended by saying the sentence was “appropriate under all” requirements of the law. And he pointed out that “all” was underlined and boldfaced.

Otteson, seeking to provide the government’s response to Davis, was quickly shot down.

“If you don’t like what I said today, you take it up to the Eighth Circuit and tell them,” Davis said. “I don’t want to hear it.”

Afterward, Abby Cole called Davis a “fair and decent judge.”

“I’m glad he took a chance on me,” she said.