(04-20) 18:05 PDT SAN FRANCISCO -- Danielle Steel's former bookkeeper was sentenced to two years and nine months in federal prison Tuesday for stealing $768,000 from the romance novelist, mostly by manipulating her financial accounts. Kristy Watts, 48, of Tiburon pleaded guilty in September to fraud and tax evasion. She has already paid nearly $1 million to Steel, who sued her in civil court, and was ordered to reimburse the government more than $60,000 in taxes as part of her sentence. Chief U.S. District Judge Vaughn Walker had proposed doubling Watts' sentence but accepted her 33-month plea agreement with prosecutors after Watts expressed remorse at a hearing in San Francisco, said defense lawyer Anthony Brass. Watts read a statement saying she had been motivated by "envy and jealousy" of Steel as well as greed. Steel, who had previously said Watts had never shown remorse, approached her in court and wished her good luck, Brass said. Watts' sentence also includes 400 hours of community service, either working at homeless shelters or speaking to others about her wrongdoing, Brass said. Watts worked for Steel from 1993 until she was fired in December 2008. She kept the books, handled payroll and accounting, and coordinated household and travel expenses for the novelist, who lives in San Francisco. Prosecutors said Watts had used Steel's online payroll account to pay herself extra salary and record fictitious payments to vendors. She also used Steel's credit-card reward points to buy gift cards and plane tickets for herself and her family, and deposited in her own account checks that had been made payable to "cash," prosecutors said. E-mail Bob Egelko at begelko@sfchronicle.com.