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A Crystal Lake man pleaded guilty in New York Tuesday to conspiracy to commit securities fraud by misappropriating more than $8 million during a Ponzi scheme.

Alan John Hanke, 50, of Crystal Lake, the sole member of IOLO Capital (IOLO), pleaded guilty to the crime in Brooklyn, New York, said officials from the United States Attorney’s Office in the Eastern District of New York.

Hanke also admitted to filing for bankruptcy and using documents in court proceedings to conceal the conspiracy, authorities said.

“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 Breon Peace, United States Attorney for the Eastern District of New York. “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.”

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Hanke is facing up to five years in prison when he’s sentenced.

Hanke was indicted in February 2024 for persuading numerous investors to invest in IOLO and other related Hanke-run companies between November 2018 and August 2021, authorities said.

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

Hanke also assured investors that their investments would be insured against losses, authorities said.

Most of these meetings took place in New York City, officials said.

Nearly all the money victims invested with Hanke was not recovered, authorities said, while the bulk of the victims’ money went to Hanke’s personal expenses including cruises, airfare, hotels, gambling expenses, and a luxury car.

Hanke also paid co-conspirators and other investors with money he wrongfully obtained during the scheme, authorities said. the names of the co-conspirators were not released.

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Hanke filed a bankruptcy petition in June 2021 and tried to discharge the debts he owed to victims, authorities said.

In the bankruptcy petition, Hanke disclosed that he received monthly Social Security disability payments but did not disclose the millions of dollars of income he received from his victims, authorities 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, authorities said.

A sentencing date has not been released.