Gary Woodward, 47, claimed he had less than £5,000 in assets during a 2003 investigation.

But when FSA officers visited his home, they were shocked to find expensive paintings and a state-of-the-art TV.

Even when when the assets he did declare were frozen, he defied a court order by opening bank accounts to move cash.

Sentencing Woodward at York Crown Court yesterday, Judge James Spencer QC said: "You went into business with a colleague and you were perfectly entitled to do so, but you had a responsibility to be frank and truthful with the FSA and you were neither. You chose deception and lies and in doing so fell into criminal activity."

David Brooke, prosecuting, said that Woodward had established an online scheme with a colleague, 147 Racing Ltd and Top Bet Placement Service, which invited participants to bet on horses once they had paid a monthly subscription charge.

This collapsed after an investigation revealed that it was a collective investment scheme – something Woodward and his partner had never declared.

As part of the investigation, Woodward was required to sign an affidavit stating all his assets over £1,000, and lied, stating he had less than £5,000 to evade paying £1.178m he owed from the collapse of his business.

Mr Brooke said: "The FSA were given the impression he was down to his last brass tack, but they were shocked when they went to his house and found landscape paintings and a Bang and Olufsen television."

Mr Derek Duffy, defending, said that Woodward, of Moor Lane, Strensall, York, had descended into alcoholism and depression after the downfall of his business and this had contributed to him signing the incorrect affidavit.

"His activities between 2003 and today have not been those of a rational man," he said.

Following further investigations Woodward was arrested in May last year. He had pleaded guilty to the charge of not disclosing the full extent of his assets in at an earlier hearing.