A former Westpac banker has been sentenced to three years in prison after signing up elderly customers to $4 million in loans they could not repay.

The Southport District Court in Queensland found 46-year-old David St Pierre encouraged 11 elderly customers to borrow hundreds of thousands of dollars each to invest in a Tasmanian property development scheme.

The scheme, run by Capital Growth International Club and All About Property Developments, promised returns of up to 20 per cent per annum.

An Australian Securities and Investments Commission investigation found from 2008 to 2010, St Pierre encouraged the customers, despite their limited means, to borrow against their homes to invest in the development scheme.

One woman, a 98-year-old living in an aged care facility, was signed up to a 30-year loan.

St Pierre then submitted loan applications to Westpac with false documents, receiving cash bonuses of up to $15,000.

The customers received monthly interest payments until the scheme went bust in February 2011, leaving them without income to repay their loans.

In November, St Pierre pleaded guilty to three counts of dishonest use of his position to gain advantage.

Sentenced in the Southport District Court, he will be released after six months on a $1,000 bond.

"Mr St Pierre's actions betrayed the trust of his clients and caused them significant financial harm. This sentence showed such behaviour will not be tolerated," Australian Securities and Investments Commission boss Peter Kell said.

Westpac has compensated the customers involved.

ASIC's investigations into the failed development firm and its officers are ongoing.