Crystal Lake man’s federal sentencing in $8M Ponzi scheme delayed over his health issues

A Crystal Lake man who pleaded guilty in federal court to defrauding investors of more than $8 million was allowed to have his sentencing postponed until March while he undergoes surgery, according to court documents.

Alan J. Hanke, 60, pleaded guilty in New York federal court in June to a multimillion-dollar Ponzi scheme and to filing bankruptcy in an attempt to conceal his crimes, according to the U.S. Attorney’s Office. Hanke, the sole member of his company IOLO Capital, was arraigned last year 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.

Hanke had been scheduled to be sentenced Tuesday, but the federal court granted a motion to delay the hearing until March 20, as Hanke needs surgery to implant a feeding tube, his attorney Michael Schneider said in court documents.

Schneider said Hanke suffers from esophageal stenosis, a condition related to radiation treatment that Hanke received after he was diagnosed with stage 4 throat cancer in 2005. Hanke is awaiting a surgery date to perform a feeding tube insertion because “it will soon be impossible for him to swallow nutrition,” Schneider said.

Schneider – an attorney for the Federal Defenders of New York, a nonprofit that provides lawyers to people who cannot afford to hire an attorney – also argued for Hanke to be sentenced only to probation, writing that any prison time would “threaten his health and perhaps his life” due to his “serious and dangerous medical condition.”

Six letters were submitted to federal Judge Ramon Reyes Jr. by people who vouched for Hanke’s character and asked for leniency. Supporters included family friends, past co-workers and a person described as his fiancé of 20 years, Donna Barry.

“Over the last 25 years, Alan and I have supported our community by attending several charity events,” Barry wrote in the letter to the judge. “Most of these events were in support of cancer. We have also contributed time to the veterans of the American Legion, the Lions Club and several other local needs. He is a kind and caring man. If you needed something, he would do his best to help you.”

Marc Schulman, identified as the owner of Advocate Consulting Group, said in his letter that he has known Hanke for 15 years and that Hanke was the president of the consulting group from 2019 to 2022.

“Throughout the adversity that Alan has experienced, I see him exhibit a ‘can-do’ attitude,” Schulman wrote. “In spite of his own issues, I have seen him giving of himself to veteran organizations as well as other charities. Being a service-disabled veteran, it meant a lot to me to learn of the things he has done for my fellow veterans over the years.”

In addition to the federal scheme to which Hanke pleaded guilty, however, he also has a pending court case in McHenry County, where he was charged in September with theft of $10,000 to $100,000, a Class 2 felony, as well as use of credit or debit card with intent to defraud, according to the indictment in McHenry County court. The criminal complaint accuses Hanke of using a debit card from the McHenry Sons of the American Legion for personal expenses totaling more than $10,000.

McHenry American Legion Post 491 Cmdr. Chad Miller also sent a letter to Ramos in October asking for the maximum sentence. In the letter, Miller refers to the money Hanke is accused of stealing from the veterans group.

“These monies were earmarked to help local veterans and the community with food, school supplies, rides for disabled veterans, clothing and home repair services, to name a few programs we support,” Miller said in the letter. “The seriousness of the defendant’s conduct cannot be overstated, and failing to address the full scope of their actions undermines the principles of justice and accountability.”

Federal prosecutors said Hanke spent investors' money on personal expenses including cruises, airfare, hotels, gambling expenses and a luxury car.

“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 a news release from the U.S. Department of Justice. “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.”