A former Goldman Sachs analyst has been sentenced to nearly 5 years in prison after leading one of the biggest ever insider trading rings that siphoned off nearly $7 million by using illegal tips on upcoming mergers.

Eugene Plotkin, a former associate in the fixed-income research division, and fellow Goldman analyst, David Pajcin, made millions of dollars from trading on tips leaked by three sources: an ex-Merrill Lynch analyst, a grand juror and by stealing advance copies of BusinessWeek from the magazine's manufacturing plant.

Mr Plotkin pleaded guilty to conspiracy to commit securities fraud and eight counts of insider trading. The 28-year old was ordered to serve four years and nine months by a New York judge, pay a fine of $10,000 and forfeit up to $6.7 million, the amount of the scam's illegal profits.

The case first came to light in August 2005 when regulators became suspicious of the options trading profits of a 63-year old retired Croatian underwear seamstress, who turned out to be the aunt of Mr Pajcin. Her account was frozen and Mr Pajcin , who also siphoned money through his exotic dancer girlfriend, was arrested. He has since pleaded guilty and is awaiting sentencing.

The Manhattan court heard on Thursday how Mr Plotkin introduced accomplice Mr Pajcin, to his college friend and ex-Merrill M&A analyst Stanislav Shpigelman at a Russian sauna in lower Manhattan in 2004.

The pair persuaded Mr Shpigelman to give them tip offs of upcoming mega mergers including Procter & Gamble's acquisition of Gilette and Adidas' deal to buy rival Reebok, in return for a cut of the profits.

Mr Shpigelman has pleaded guilty to conspiracy to commit insider trading and was sentenced last year to more than three years in prison.

In another case, they bribed two men to get jobs at a BusinessWeek printing plant in Wisconsin to steal advance copies and pass on the names of stocks mentioned in the magazine's market-moving "Inside Wall Street" column.

In a third plot, they enticed Jason Smith, a high school friend of Mr Pajcin who served on a grand jury in New Jersey investigation the US drugs company Bristol Meyers, to pass on secret insider information. Smith has since been sentenced to 33 months in prison

"I am ashamed and deeply sorry for what I did," Mr Plotkin, an accomplished latin ballroom dancer an amateur film maker, told the judge in the district court of Manhattan.

Throughout the trial Mr Plokin, and son of Russian immigrants who has an economics degree from Harvard University, sought to position himself as an overworked Wall Street professional who fell in with the wrong crowd.

Mr Plotkin's lawyer told American newspapers that it was Mr Pajcin who devised the plan "after meeting with criminal types in Croatia who had already engaged in a similar scheme."

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