Crystal Lake man accused of stealing millions from investors, charged in federal court

A Crystal Lake man is accused in federal court with stealing millions of dollars from investors.

Alan John Hanke, 59, was arraigned last month in a federal courthouse in Brooklyn in a nine-count indictment on charges of securities fraud conspiracy, wire fraud conspiracy, money laundering conspiracy, wire fraud, bankruptcy fraud and filing a false bankruptcy declaration.

Prosecutors allege the charges were committed in connection with schemes designed to induce investors to purchase speculative investments, after which he would misappropriate the funds and then to use the bankruptcy system to discharge the debts, according to a news release from the U.S. Department of Justice.

Hanke, the sole member of IOLO Capital, faces up to 25 years in prison if convicted on all charges, according to the release. He has pleaded not guilty. Hanke’s attorney, Assistant Federal Defender Michael Schneider, declined comment via email.

Hanke was arrested in January in Cape Canaveral, Florida, as he was boarding an international cruise. Hanke had an initial appearance on Jan. 26, in the U.S. District Court for the Middle District of Florida and was released on a $250,000 bond, according to the release.

“As alleged, the victims trusted Hanke with millions of dollars for what they were assured would be safe investments,” U.S. Attorney for the Eastern District of New York Breon Peace said in the release. “In reality, the defendant deceived the victims and used their money to enrich himself with vacations and a luxury car, and then sought to abuse bankruptcy proceedings to shield his ill-gotten gains.”

James Smith, assistant director-in-charge with the Federal Bureau of Investigation, said Hanke “took a gamble by allegedly defrauding investors out of millions of dollars, which he ultimately used to fund his own personal expenses while also lying to bankruptcy court.”

“Hanke’s luck eventually ran out,” Smith said in the release. “He will now be forced to answer for his alleged false promises, lies, and misrepresentations. You can bet the FBI will continue to make sure swindlers face just punishment for their attempted frauds.”

Hanke is accused of persuading “numerous investors, often in meetings in New York City, to invest in IOLO or related Hanke-run companies ... promising investors high returns within short periods of time” between November 2018 and August 2021, according to the release.

According to the indictment, he promised investors he was investing their money in “IOLO Global LLC” as well as Bala Trading LLC, a limited liability company based in Wyoming, of which Hanke said he was the sole owner. Bala was purported to be an investment company with 17 years of trading experience.

Two unnamed co-conspirators also are charged in the indictment. One lives in Texas and the other is an attorney who lives in Georgia, according to the indictment. Two trusts, both of which were established by one of the co-conspirators, also are subjects of the indictment.

Hanke allegedly lured would-be victims into investing in “standby letters of credit,” “medium-term notes,” and “high-yield bonds,” according to the release.

Although, prosecutors said, Hanke assured investors their investments would be insured against losses, nearly all of the money that they invested with Hanke allegedly went toward his own personal expenses, including cruises, airfare, hotels, gambling expenses, and a luxury car.

“Hanke persuaded his victims that he was a sophisticated investor with high-yield instruments and guaranteed that the investments were protected by highly rated sureties,” the indictment alleges.

Among several examples detailed in the indictment of the alleged criminal activity is an exchange between Hanke and a client outside the U.S. who invested $3 million with the guarantee that the investment was secured and he would see a return of $26.4 million, which he did not.

Through numerous addenda to the contract, Hanke “increased the promised returns” to $112 million, which required another $3 million investment. The client did not receive any payment and lost the initial investment, according to the indictment.

The news release also alleges that Hanke “paid co-conspirators and other investors with money that he wrongfully obtained during the scheme” and that he filed a bankruptcy petition in June 2021 in Illinois, in which he sought to discharge the debts that he owed to his victims.”

Hanke is accused of falsely disclosing in the bankruptcy petition that he “was paid monthly Social Security and disability checks, but did not disclose the millions of dollars of income he received from his victims. Hanke also did not disclose the proceeds from the sale of an airplane, or that he used the proceeds for personal expenses, including gambling and repairs to a close relative’s home, as well as $180,000 that was withdrawn in cash,” Department of Justice said in the release.

Alan J. Hanke was listed in nonprofit disclosure records from 2021 and in more recent references online as a member of the Board of Directors for Veterans Path to Hope, a prominent charity based in Crystal Lake with a wide range of programs to assist military veterans. The organization’s website previously listed Hanke, describing him as a “highly accomplished entrepreneur and investor who specializes in healthcare and aviation.” Veterans Path to Hope Executive Director Laura Franz said Hanke’s term ended in January before his legal troubles were revealed and that he had not been active in the organization.

The story has been updated with a comment from a Veterans Path to Hope representative.