Ringleader Mark Evill worked for the Estates and Property Department of the Powys Teaching Health Board between February 2014 and May 2015.
He awarded lucrative building contracts to his own business George Morgan Ltd.
From November 2014 to August 2015, George Morgan Ltd received almost £708,000 from the Health Board.
Evill created fictitious characters to compose emails from the company, signing off quotations.
Two other employees were also involved in the scam.
Robert Howells, an agency project manager in the department, held the funds for a number of works George Morgan Ltd undertook.
He received a £1,000 payment from the company and was helped in buying a car.
Another employee, Michael Cope, was found to have received £500 from Evill in return for him helping to pass work to the George Morgan Ltd business.
After Evill left the Health Board, his involvement in George Morgan Ltd was revealed when a chartered surveyor was commissioned to undertake an independent value for money assessment.
The report identified deficiencies and remedial work required by projects carried out by George Morgan Ltd and costs were estimated at £1,420,604.
Evill was sentenced to seven years at Merthyr Tydfil Crown Court while Howells was jailed for four years and Cope for three years.
Juliette Simms, of the CPS, said: “Mark Evill took hundreds of thousands of pounds from this public body out of his own greed, using his colleagues to ensure his business received lucrative contracts for work.
“Evill used the money he made in the fraud to buy land and properties in Wales, taking two luxury holidays to Dubai, buying a Chanel watch, a £5,000 Breitling watch and numerous cars including a Land Rover and an Audi.
“Other defendants originally claimed they did not know about Evill’s involvement with the company but the CPS proved Howells was complicit in the fraud and Evill had bought him a Ford Focus worth almost £11,000 for his efforts.”