File Photo – United States District Court for the Eastern District of New York | Photo: US Courts

Federal prosecutors say a Crystal Lake man stole millions of dollars from investors and spent it on personal expenses before falsely declaring bankruptcy.

Alan John Hanke, 50, of Crystal Lake, was charged with securities fraud conspiracy, wire fraud conspiracy, money laundering conspiracy, wire fraud, bankruptcy fraud and filing a false bankruptcy declaration.

Hanke was arraigned on the nine-count indictment last month in the United States District Court for the Eastern District of New York.

Prosecutors say the charges were filed against Hanke for inducing investors to purchase speculative investments, misappropriating the funds and then using the bankruptcy system to discharge his debts to his victims.

Hanke, the sole member of IOLO Capital (IOLO), was arrested in Cape Canaveral, Florida, as he was boarding an international cruise.

During an initial court hearing, Hanke was released on a $250,000 bond.

“As alleged, the victims trusted Hanke with millions of dollars for what they were assured would be safe investments,” United States Attorney for the Eastern District of New York Breon Peace said.

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“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. This Office will hold the defendant accountable for his criminal acts of greed and dishonesty and seek justice for his victims,” Peace said.

FBI New York Field Office Assistant Director-in-Charge James Smith 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 the bankruptcy court.

“Hanke’s luck eventually ran out. 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,” Smith said.

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According to an indictment, Hanke persuaded numerous investors, often in meetings in New York City, to invest in IOLO or related Hanke-run companies between November 2018 and August 2021.

Hanke promised investors high returns within short periods of time by investing in, among other things, “standby letters of credit,” “medium-term notes,” and “high-yield bonds,” according to the indictment.

Hanke also assured investors that their investments would be insured against losses, the indictment said, adding that nearly all of the money that the victims invested with Hanke went to the man’s personal expenses, including cruises, airfare, hotels, gambling expenses and a luxury car.

The indictment said Hanke also paid co-conspirators and other investors with money that he wrongfully obtained during the scheme.

The indictment said Hanke filed a bankruptcy petition in June 2021 in Illinois seeking to discharge the debts that he owed to his victims.

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In the bankruptcy petition, Hanke disclosed 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, the indictment said.

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, according to the indictment.

Hanke faces a maximum sentence of 20 years in prison on the wire fraud, wire fraud conspiracy and money laundering conspiracy counts and five years in prison on the securities fraud conspiracy, bankruptcy fraud and false bankruptcy declaration charges.