Anthony Nicholls, 63, of Mitcham, was sentenced to four years and six months in jail by the Victorian County Court. That includes a non-parole period of three years.
Mr Nicholls pleaded guilty in May to three charges of dishonestly using his position as a director of Zantholls International and Peton Properties to misappropriate money from investors.
According to ASIC, which led the investigation, these companies raised $2.68 million from about 20 investors to be used for property developments in Ballarat.
ASIC said that Mr Nicholls withdrew $757,000 from those funds for his own personal benefit between October 2004 and August 2006.
Peton was placed into liquidation in October 2007, owing creditors more than $4 million – a point highlighted by Judge Jane Patrick when she handed down her sentence.
“Mr Nicholls had placed multiple nails in the coffin of a terminally ill business and his moral culpability was high,” she said.
"It was serious offending involving dishonesty over a considerable period of time resulting in people losing their entire life savings and future security.”