Thomas Graham Greenaway, 73, was convicted of 33 counts of stealing money and property from the Yugunga-Nya people in Western Australia while he was trustee.
All told, Greenaway stole $2,909.303.33 in 33 transactions between 2013 and 2017, with more than $2 million used to prop the failing Freemason's Hotel in Geraldton.
He was sentenced on Tuesday after a retrial in May in the Perth District Court to five years and nine months' imprisonment, eligible for parole after serving three years and nine months, backdated to July 2023 due to time already served.
Judge Michael John Bowden said Greenaway had stolen from vulnerable people.
"They trusted you and you clearly breached that trust," he said.
"Whether you thought that because of the royalties that they were receiving increased from some $72,000 to around about $3.8 million and they had plenty of money, I don't know, but certainly, you took money away from people who were entitled it."
The court was told Greenaway, who has previously worked as a financial planner and was on the Geraldton Council as deputy mayor and councillor for 15 years, was appointed trustee of the Yugunga-Nya People's Trust in 2004.
His service was described as "capable" with investments from mining royalties made to benefit the community, including housing in Meekatharra and a business to employ Indigenous people.
Greenaway channelled the stolen funds into his unprofitable hotel business, which started to experience financial troubles in 2013 after a failed restaurant venture, superannuation and wage claim difficulties, a general downturn in the economy and competition from newer venues.
"Your involvement in the Freemasons Hotel has ended up in a disastrous position for you," Judge Bowden said.
"However, when you look at your conduct, it was deliberately dishonest over a long period of time."
Judge Bowden acknowledged Greenaway had returned about $700,000 to the trust and ordered him to repay $2,179,533.58.
The Yugunga-Nya people hail from WA's Mid West region, including the towns of Meekatharra and Cue.
The discretionary trust was formed in 2004 to hold native title income made from agreements on Yugunga-Nya country.
Its purpose is to benefit the community by helping those suffering from poverty and sickness and boosting education and culture.
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