Crystal Lake man guilty in $8m Ponzi scheme against investors, using bankruptcy to hide crime

A Crystal Lake man has pleaded guilty to defrauding investors of more than $8 million, the U.S. Attorney’s Office announced.

Alan John Hanke, 59, pleaded guilty Tuesday in federal court in Brooklyn, New York, to conspiracy to commit securities fraud for his role in misappropriating more than $8 million as part of a Ponzi scheme, according to a U.S. Attorney’s Office news release. As part of his plea, Hanke also admitted he filed for bankruptcy to conceal the conspiracy.

Hanke, the sole member of IOLO Capital, was arraigned in February 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. He initially pleaded not guilty.

When sentenced, Hanke faces up to five years in prison, according to the release. His sentencing is scheduled for Oct. 31, according to court documents.

“Hanke admitted today that he conspired to defraud clients of millions of dollars of their investments, and then tried to cover up his crime by declaring bankruptcy which was an intentional abuse of the U.S. Bankruptcy Court,” Breon Peace, U.S. attorney for the Eastern District of New York, said in the release. “Today’s guilty plea reaffirms my Office’s efforts to root out white-collar crime where we find it and ensure integrity in the financial markets and the court system.”

Hanke was arrested in January in Cape Canaveral, Florida, as he was boarding an international cruise, according to the release.

Between November 2018 and August 2021, Hanke was alleged to have lured would-be victims into investing in “standby letters of credit,” “medium-term notes” and “high-yield bonds,” according to the release. Nearly all of the invested money went to Hanke’s personal expenses, including cruises, airfare, hotels, gambling expenses and a luxury car; he also used money the money to pay “co-conspirators and other investors,” according to the release.

Hanke filed a bankruptcy petition in June 2021 to discharge the debts that he owed to investors, stating he received monthly Social Security disability payments but did not state the millions of dollars he received from investors; he also did not report money made from the sale of an airplane, which he used for personal expenses including gambling and repairs to a relative’s home, and he withdrew $180,000 in cash, according to the release.

Hanke has been involved in veterans charities and fundraisers in McHenry County. His attorney, Assistant Federal Defender Michael Schneider, declined comment via email Wednesday.

The government’s case was handled by the Office’s Business and Securities Fraud Section, according to the release.