U.S. District Judge David D. Dowd Jr. in Akron sentenced Lay on Tuesday after the second day of a lengthy sentencing hearing.
The Ohio Bureau of Workers' Compensation was the sole investor in a high-risk hedge fund Lay set up in Bermuda. Prosecutors said he failed to tell bureau officials about the extent of the risk.
Lay was the 19th person convicted in a wide-reaching corruption scandal in Ohio that began in 2005.
