The other accused in this case, Djani Bazon, co-owner of the 'Mini Pam' company, and Igor Mlinar, director of the 'Zadom Nova' company, were given suspended sentences of 16 and 10 months in jail respectively.
Herak, who served as tourism minister in the former Croatian Democratic Union (HDZ) government until 2000, was found guilty of abusing his ministerial position to acquire material gain for himself and others.
Given that Herak was in custody from January 2000 to 31 July 2002, the prison sentence will be reduced for the time spent in detention.
Herak announced that he would appeal against the Pula court's verdict before the Supreme Court.
Public Prosecutor Vlatko Nuic said that Herak was also due to stand trial in another case in Pula in late November, and that proceedings were under way against him before the municipal court in Pazin. In both cases Herak is accused of white-collar crimes.