Crystal Lake man accused of theft from veterans group, guilty of $8M Ponzi scheme now works at Fox Lake bar

A Crystal Lake man awaiting sentencing in a federal Ponzi scheme and accused of stealing from a McHenry County veterans group has been allowed some contact with members of that group while he works at a Fox Lake bar.

Alan J. Hanke, 60, pleaded guilty in New York federal court to a multimillion-dollar Ponzi scheme. He also has been charged in McHenry County 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 the McHenry County court.

Hanke is accused of using a debit card from the McHenry Sons of the American Legion for personal expenses totaling more than $10,000, according to the McHenry County State's Attorney's Office in a criminal complaint.

The criminal complaint alleges that between January 2023 and March 2024, Hanke made "cash withdrawals and purchases totaling over $10,000′′ and used the card for "numerous unauthorized cash withdrawals and purchases at various restaurants and retail establishments/online websites" in excess of $150 in a six-month period.

In court last week, a judge granted part of a motion from Hanke's attorney to modify conditions of Hanke's pretrial release. When released from the county jail on Sept. 13, he was ordered not to approach or communicate in any way with members of the American Legion or Sons of the American Legion. However, according to the motion, American Legion members often frequent Dinghy's Bar and Restaurant, where Hanke works as a manager.

"Some of the members presently attend trying to communicate with Alan," according to the motion.

Hanke's stepson recently died and he has "family members who are still active members of the American Legion. There will be services held for his stepson's passing involving members of the American Legion," according to the motion.

Hanke "feared the current condition of no contact with American Legion members is too restrictive and will prohibit him from contacting family members attending funeral services for his stepson and performing successfully at his job," according to the motion.

Judge Mark Gerhardt modified Hanke's pretrial release conditions Thursday allowing him to have "contact with members of the American Legion solely for the purposes of his employment at Dinghy's Bar and Restaurant, however [Hanke] shall not discuss this case and its facts and circumstances with any members of the American Legion." Gerhardt did not rule on conditions regarding the funeral service. That was continued for status on Friday, according to the order.

In June, Hanke pleaded guilty in federal court in Brooklyn to defrauding investors of more than $8 million , 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 in February 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. He is set to be sentenced in this case Dec. 12.

As part of his pretrial release in the McHenry County case, Hanke is allowed to travel to New York for court appearances for his federal case and to Walworth, Wisconsin, for "medical treatment for his condition," which was not specified in documents. He was ordered not to hold any office with any nonprofit organization, according to the order signed by Judge Carl Metz.