Australian 'collar bomber' jailed for at least 10 years

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An investment banker who attached a fake bomb around the neck of a Sydney schoolgirl in a bid to extort money from her wealthy family was Tuesday jailed for at least 10 years.

Paul Peters, who was arrested and extradited from the United States in September last year with the help of the FBI, pleaded guilty earlier this year to aggravated breaking and entering and detaining the teenager for advantage.

The father-of-three, 52, made global headlines when he broke into the multimillion-dollar Pulver family home wearing a mask and strapped a device to 18-year-old Madeleine's neck with a note claiming it was a bomb in August 2011.

Police, bomb squad and other emergency services descended on the scene and Pulver endured a horrifying 10-hour ordeal with experts working into the night to remove the device, only later establishing it was an elaborate hoax.

Sydney District Court judge Peter Zahra sentenced Peters to a maximum 13-and-a-half years in prison, describing it as a "deliberate act of extortion" which had inflicted "unimaginable terror" on him victim.

He will be eligible for parole after 10 years.

The court heard that he was suffering psychiatric problems after his marriage broke down and he lost custody of his children, with Zahra saying he appeared to believe he was an "avenging character" in a novel he was writing.

Prosecutors had described the sensational case as an act of "urban terrorism" fuelled by financial greed.