Illinois Man Admits $8M Ponzi Scheme

BROOKLYN, NY – Alan John Hanke, 50, of Crystal Lake, Illinois, today confessed to orchestrating a multi-million dollar Ponzi scheme that fleeced investors of over $8 million. Hanke, the sole member of IOLO Capital (IOLO), pleaded guilty to conspiracy to commit securities fraud in federal court in Brooklyn, admitting he systematically misappropriated funds from unsuspecting victims.

The scheme, which ran from November 2018 to August 2021, targeted investors – many lured to meetings in New York City – with promises of sky-high returns in a matter of weeks. Hanke pitched investments in dubious instruments like “standby letters of credit,” “medium term notes,” and “high yield bonds,” falsely assuring investors their money was insured against loss. The reality, prosecutors say, was far grimmer: nearly all of the invested funds vanished.

Instead of legitimate investing, the bulk of the $8 million ended up funding Hanke’s lavish lifestyle. Court documents detail a spree of personal expenses, including extravagant cruises, first-class airfare, luxury hotels, a relentless gambling habit, and a pricey new car. Hanke also used the stolen funds to pay off co-conspirators and early investors, the classic hallmark of a Ponzi scheme designed to keep the illusion of profitability afloat.

But the deception didn’t stop there. In June 2021, as the scheme began to unravel, Hanke filed for bankruptcy, a calculated attempt to shield his ill-gotten gains. He conveniently disclosed receiving Social Security disability payments while omitting the millions he’d pocketed from victims. He also failed to report the sale of an airplane and the subsequent use of the proceeds for personal expenses – including more gambling and repairs to a relative’s home – and a staggering $180,000 withdrawn in cash.

“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,” stated United States Attorney Breon Peace. The FBI, led by Assistant Director-in-Charge James Smith and Special Agent in Charge David Walker, investigated the case. Hanke now faces up to five years in prison when sentenced before United States District Judge Ramon E. Reyes, Jr.

The prosecution is being handled by Assistant United States Attorneys Nicholas J. Moscow and Matthew Skurnik, with assistance from Paralegal Specialist Madison Bates of the Office’s Business and Securities Fraud Section. This case, docket number 24-CR-27 (RER) in the Eastern District of New York, serves as a stark reminder that even sophisticated financial crimes will be pursued to the fullest extent of the law.