A training charity was forced into closure and 40 jobs were lost after trusted workers fleeced a college of £300,000.
Former executive managers of Team Wearside Joanne Mounter and Paula Bolan, with the help of training assessor Kym Norman, created fictitious students and billed Sunderland College for fake admin work.
As a result of the "sophisticated" scam, Sunderland College was duped out of over £300,000, and training firm Springboard was fleeced of around £100,000.
After the high-level dishonesty was exposed, the two well-established and respected city businesses ceased trading with Team Wearside, a non-profit organisation which closed for good last month.
Mounter, 46, of Minster Courst, Willington, County Durham, admitted three fraud charges and pocketed a total of £186,306 in the scam.
Bolan, 45, of Lonsdale, Birtley, Gateshead, admitted two charges in relation to the £177,662 she obtained.
At Newcastle Crown Court both of the women, who conducted the con for more than two years, have been jailed for four years and four months, each.
Norman, 53, of Stratford Avenue, Grangetown, Sunderland, admitted one charge in relation to £40,426 he made in his involvement, which lasted about 12 months.
He was jailed for two years and two months.
Mr Recorder Haslam told the trio: "My judgement is your fraudulent activity played a significant role, or was a significant contributory factor to the failure of Team Wearside.
"A number of those employed at Team lost their jobs and it has ceased trading.
"That, in my judgement, constitutes a serious detrimental effect on the victims of the frauds."
The judge said he accepted the three were all now remorseful for what they did but told them: "Each of you, in my judgement, held a position of trust or responsibility within the organisation.
"It was a significant and sophisticated fraud, orchestrated by Joanne Mounter and Paula Bolan and into which you were recruited, Kym Norman.
"All three of you abused positions of power, trust and responsibility placed in you by Team Wearside.
"The offences were sophisticated and involved a significant amount of planning."
Prosecutor Rupert Doswell told the court a "whistleblower" had reported financial regularities at Team Wearside, which was funded by a government-backed agency established more than 25 years ago and helped unemployed people train for work, which resulted in an investigation.
He said: "A number of persons were initially suspected of being involved in the fraudulent activity and were all suspended on November 29 2016.
"This included those that worked alongside the proposed defendants in their team.
"It was then believed that they must have had some knowledge of the fraudulent activity because of their position.
"This view has not endured. It is an aggravating feature that as a result of the necessary investigation into this fraud, there was a suspension of some other workers and the distress that must have been caused to them and their families."
Mr Doswell told the court prosecutors have launched a separate investigation under the Proceeds of Crime Act in an attempt to get some of the stolen money back.
But he added: "A significant proportion of the fraudulently obtained money has been spent.
"The final position of what may be recovered is not yet known."
Defence barristers said all three were formerly respected workers who are now deeply sorry for their involvement.
Peter Schofield, defending Mounter, has been a hard-working, single mum since the sudden death of her husband when she was pregnant with her youngest child.
Mr Schofield said Mounter, who turned to gambling, feels "deep shame" for her behaviour and wished to apologise for it.
Tony Davis, defending Bolan, said the former respected worker had a "monumental addiction to gambling" and is "at a loss" to explain how she allowed herself to get so out of control.
Mr David added: "Her whole life is utterly destroyed as a result of her involvement in this."
John Caudle, defending Norman, said the assessor's involvement was on a much smaller scale and he has put away cash to pay back what he took.
Mr Caudle said Norman has health problems and was known as a "vulnerable individual" when working at Team Wearside.
Speaking after the case, Detective Sergeant Jane Bowran of Northumbria Police said: “This crime has had such a wide-reaching and damaging impact with many people losing their jobs.
"Mounter and Bolan, assisted by Norman, abused their position of trust within Team Wearside for their own financial gain and have been brought to justice for their actions.”
'Betrayal of trust'
David Barker MBE, the chief executive of Springboard said today ”Springboard welcomes the outcome of today’s legal proceedings against the people who betrayed our trust and fraudulently claimed funds from our charity.
Springboard will continue to support the development of sustainable communities, where people have the skills they need for work and life.
"The selfish acts of a few individuals will not deter us from our mission. Charities like Springboard rely on public support and I am grateful for the support we have received since details of this matter became apparent.
"We will make no further comment at this time.”
Ellen Thinnesen, principal and chief executive of Sunderland College, said: "We are deeply disappointed by the actions of individuals we had grown to trust - and who were in an equally trusted position at Team Wearside, a charitable organisation that has done so much good work for the young people of Sunderland and North East at large.
"These were people we had worked with for a number of years, whose work was regularly appraised - as all of our subcontractors work is - but who had, between them, devised a well-orchestrated scheme that sought to purposely deceive and defraud a number of organisations they worked with.
“We are pleased this matter is now resolved and been handled appropriately by the authorities.”
David Barker MBE, Chief Executive of Springboard, said: "Like the other organisations that have fallen victim to this fraud, we were shocked and disappointed to discover we had been deceived in this way.
“We have a relationship spanning many years with Team Wearside and they have long been a valued partner, so the actions of those involved are all the more regrettable.”