Tokyo District Court jailed Kazuhiko Asakawa, 61, saying he lied about his firm's investment performance and the size of assets under its management to solicit more investments from retirement funds.
The court also gave seven-year jail terms to his associates Shigeko Takahashi, 54, and Hideaki Nishimura, 58.
In a crime that echoed Madoff's audacity, investigators found Japanese firm AIJ had lost USD 1.1 billion yen over nine years to March 2011 through derivative trading, using cash invested by pension funds.
The funds were largely employee pension funds for small- and medium-sized businesses.
As well as the jail terms the court also confiscated 570 million yen of AIJ's assets and separately ordered them to pay a total of 15.7 billion yen.
"It was an audacious and shameless crime," presiding judge Akira Ando told the court.
"The act was extremely heinous as they insinuated themselves (into the favour of) pension funds that required stable management," the judge said.
He took in billions of dollars from thousands of clients over decades, building a reputation as a shrewd investment manager by paying out fake "profits" to some investors by plundering the new cash from others.
But his pyramid fraud collapsed in 2008, wiping out numerous family fortunes. He was arrested in December that year, and pleaded guilty in 2009.
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