A judge who issued a warrant for a Crystal Lake man and “serial fraudster” has ordered federal authorities to transport him from federal prison, where he is serving a sentence in an $8 million Ponzi scheme, for his trial this month in a McHenry theft case.
Alan J. Hanke, 61, of Crystal Lake, was set to appear in McHenry County Circuit Court on Wednesday morning for a motions hearing.
Hanke did not appear and has been held in the Federal Bureau of Prisons system at the Federal Medical Center in Rochester, Minnesota, since earlier last month.
Hanke turned himself in on February 5 to begin serving a four-and-a-half-year sentence after he pleaded guilty in a federal case in June 2024 to conspiracy to commit securities fraud for his role in misappropriating more than $8 million as part of a Ponzi scheme, according to the U.S. Attorney’s Office for the Eastern District of New York.
Hanke’s McHenry County case was filed in September 2024 and he faces charges of theft by deception over $10,000, a Class 2 felony, and fraud by use of debit or credit card, a Class 4 felony.
A criminal complaint filed in McHenry County Circuit Court said Hanke used a debit card belonging to Sons of The American Legion in McHenry without authorization.
Hanke, between January 2023 and March 2024, made cash withdrawals and purchases totaling over $10,000 with the card, the complaint said.
The complaint and prosecutors said the card was used at various restaurants and retail establishments, along with online websites, including Amazon, as well as a boat rental out of Florida.
Prosecutors said Hanke was the Sons of The American Legion commander and had access to the funds through his role.
Hanke’s Wednesday court hearing in McHenry County resulted in McHenry County Judge Tiffany Davis ordering Hanke to appear for his next court date, which is March 26, for a trial conference hearing.
A writ, which is an order to a correctional facility to transport a detainee to court, has been filed requesting the U.S. Marshals Service to transport Hanke to McHenry County for next week’s hearing.
Davis, during last month’s court hearing, issued a failure to appear arrest warrant for Hanke in an attempt to have him brought to McHenry County to face his local pending charges.
A jury trial is currently set for 10 a.m. on March 30.
Hanke had previously pleaded guilty in July in the local case to one count of fraudulent use of a credit or debit card, a Class 4 felony, in exchange for his more serious charge being dismissed.
He later obtained a new attorney, who successfully argued to have the guilty plea withdrawn.
Attorney Albert Wysocki said that Hanke’s guilty plea was entered under a “misapprehension of the law as well as a misapprehension of the facts, and further that there is doubt of the guilt of the accused…”
The attorney said that Hanke was seeking to have the case proceed to trial and that Hanke’s previous attorney told the man that he had to plead guilty in the case or he would withdraw as his attorney.
“That the Defendant, since engaging his then Counsel of Record, repeatedly told Counsel that he was innocent of the charges in that he never had an intent to defraud The Sons of the American Legion or anyone else,” a motion said.
Wysocki also said that Hanke’s previous attorney never explained to Hanke the consequences of pleading guilty to the charge he pleaded guilty to and that the attorney disregarded numerous pertinent documents to aid in his defense.
In Hanke’s federal case, he admitted 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, United States Attorney for the Eastern District of New York Breon Peace previously said.
The indictment said that between November 2018 and August 2021, Hanke — the sole member of IOLO Capital (IOLO) — persuaded numerous investors, often in meetings in New York City, to invest in IOLO or related companies run by him.
Prosecutors said 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.”
He also assured investors that their investments would be insured against losses, prosecutors said. Nearly all the money that the victims invested with Hanke was not recovered.
Prosecutors said 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 that he wrongfully obtained during the scheme, prosecutors said.
Hanke filed a bankruptcy petition in June 2021 in which he sought to discharge the debts that he owed to his victims.
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, prosecutors said.
Prosecutors 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.
Federal prosecutors called Hanke a “serial fraudster” who stole more than $8 million through a “brazen Ponzi scheme.”
Federal prosecutors said in support of their maximum prison time request that Hanke has failed to pay restitution and continued to commit fraud. “Simply put, Hanke has not been deterred.”
Hanke successfully worked to have his federal sentencing hearing delayed multiple times due to health issues before eventually being sentenced to four and a half years in federal prison in October.
The judge additionally ordered him to pay approximately $8.2 million in restitution. He is set to be released from federal prison on November 22, 2029.