NEW YORK, Dec 13 (Reuters) - Bulgarian oil trader Ludmil Dionissiev was sentenced to two years' probation on Thursday for his role in paying secret kickbacks to Iraq in the U.N. oil-for-food program.

Dionissiev was sentenced in federal court after he pleaded guilty in August to one count of smuggling just weeks before he was due to go on trial with Texas oil tycoon Oscar Wyatt.

Prosecutors said Dionissiev, 61, worked as a consultant to Texas oilman David Chalmers to help buy Iraqi oil for Chalmers' companies, Bayoil USA Inc and Bayoil Supply and Trading Ltd.

In one January 2001 deal, Dionissiev told Russian politician Vladimir Zhirinovsky that Bayoil would pay a surcharge to Iraq of more than $546,000 on his behalf for more than 1,820,000 oil barrels.

During the sentencing, Dionissiev said, "It was the biggest mistake of my life."

The $67 billion oil-for-food program began in 1996 and ended in 2003 to ease the impact of sanctions imposed on Saddam Hussein's government after it invaded Kuwait in 1990.

The charges against the Houston-based Dionissiev and others stemmed from Iraq's requirement from 2000 to 2003 that recipients of oil should pay a secret surcharge, in violation of U.N. sanctions and U.S. law, to front companies and bank accounts controlled by the Iraqi government.

The secret payments were not made to the United Nations' monitored bank account from which humanitarian goods could be purchased for the Iraqi people, but in a secret deal with Baghdad outside of the program.

Chalmers and the two companies have also pleaded guilty and await sentencing. In November, Wyatt, the most prominent figure jailed over corruption in the program, was sentenced to one year and one day in prison after he agreed to pay a $200,000 surcharge into an Iraqi account in Jordan. (Reporting by Christine Kearney, editing by Michelle Nichols and Doina Chiacu)

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