Despite pleas for leniency from NLS's Rabbi Jeremy Gordon, Woolf was jailed at Southwark Crown Court on Monday with former colleague, Jacqueline Swan, 47, who got a year for failing to disclose acts of money-laundering.
A third director, Leslie Sieff, a 63-year-old former treasurer of NLS from Child's Hill, admitted possessing $60,000 in counterfeit notes and was fined £1,000 and ordered to pay £750 costs.
All three were arrested in June 2008 following a £10 million four-year police investigation, Operation Rize.
Undercover police officers had posed as customers, Vinnie and Billie, and made deliberately suspicious requests.
But rather than report this, Swan helped them avoid detection.
A search warrant was issued and more than 500 officers raided the Hampstead, Edgware and Park Lane sites, searching 24 hours a day for 12 days and seizing the contents of 3,497 boxes. More than 140 people were arrested and 30 people have been convicted.
So far, £13 million has been returned to the public purse and £12 million detained by the courts. Woolf, who moved to the UK from South Africa in 1976 and lived in a mansion block in St Johns Wood, regularly drilled into boxes when rent was overdue, and did not report criminal contents. He also stole more than £50,000 from them and delayed reporting the discovery of a gun used by Christopher Green, who had hidden it 24 hours after murdering someone. He was later convicted, despite that.
Police found fake documents which Woolf had kept as "collateral" should the box owner return, including two forged Israeli passports under the names of Maya and Moshe Gal.
Michael Holland QC, prosecuting, told the court: "Milton Woolf was keen to ensure his business was as successful as he could. He was prepared to close his eyes to criminals.
"The directors wanted to try to adopt the 'three wise monkeys' approach; see no evil, hear no evil, speak no evil."
But Andrew Bodnar, defending, said that only 8.5 per cent of the cash found in the premises has been proved to be of criminal origin.
He argued that it was Swan who dealt predominantly with the undercover officers. Woolf had not known the gun he kept had been used for a murder; he was due to travel abroad shortly after discovering it and so kept it in a safe place until his return.
"Mr Woolf maintains that the criminality to which he has pleaded guilty is the full extent of his offending," Mr Bodnar said.
He also argued that Woolf did not know the documents he held were fake and that there was no guidance as to what to do with property found in a box believed to be abandoned. He "simply put the items to one side and gave them no further consideration".
Rabbi Gordon, who had been selected by Woolf's committee in 2008 to replace the late Rabbi Dr Louis Jacobs, said: "He is a diligent and careful person, very much feeling a sense of responsibility to the community and with a broader involvement of what it means to be a Jewish person in contemporary society.
"In the two years since his arrest, he is an almost unrecognisable man. I know of the impact it has had on his business and personal life and the impact on his daughter at an important part of her education. He has separated from his wife.
"His hair has receded and his posture broken. He has been under an enormous amount of pressure. He has been living the life of a convicted felon. It's been incredibly painful for me to see."
Angela Low, also a member of NLS, and the rabbi's mother, told the court she had known Woolf for 15 years, adding: "I have seen a terrible deterioration in his person, physically, emotionally and mentally. In prison, he will be classed as vulnerable and will be at substantial risk."
Det Supt Mark Ponting said after the hearing: "It was a no-questions-asked service. This was something criminals were interested in and took advantage of. It wasn't just a case of turning a blind eye, it was positive action to help criminals."
He also said he had worked with the Community Security Trust during the investigation on how to deal with Jewish clients.
