The scam involved bogus claims filed for phantom treatments in the recompression chamber at Fort Bovisand dive centre, Plymouth, between 1998 and 2002.
David Welsh, 52, the former proprietor of Fort Bovisand, is to serve five years and three months.
Diving instructor Michael Brass, 44, was jailed in his absence for two years and three months. He jumped bail, is thought to have left the country, and remains on the run. A warrant has been issued for his arrest.
Bovisand director Andrew Walker, 55, escaped jail but received a sentence of two years, suspended for 12 months.
The scam involved the recruitment of individuals who, in return for a payment of up to £200, supplied personal details which could be used to file the claims at health trusts around the country, at £6500 a time.
After a six-week trial at Plymouth Crown Court last summer, Welsh and Brass were found guilty of conspiracy to defraud and conspiracy to pervert the course of justice.
Walker had earlier admitted conspiring to defraud but maintained that he did not benefit from the swindle.
The men now face compensation hearings, whose aim is to track and recover the defrauded money.
Archive | 
Win a Luxfer pony cylinder
