A Crystal Lake man who pleaded guilty in federal court to defrauding investors out of more than $8 million was sentenced Thursday to 4½ years in prison and ordered to pay over $8.2 million in restitution.

Alan J. Hanke, 61, pleaded guilty in New York federal court in June 2024 to a multimillion-dollar Ponzi scheme 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 last year 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 ultimately pleaded guilty to the conspiracy to commit securities fraud.

Hanke is set to start his sentencing Feb. 6, according to officials with the U.S. Attorney’s Office for the Eastern District of New York, where Hanke’s federal case was prosecuted.

The sentencing comes after Hanke appealed multiple times for it to be delayed due to ongoing health issues. Hanke had been scheduled for sentencing Sept. 4 after it was postponed twice.

Hanke’s attorney, Michael Schneider, submitted a third continuance request in August, asking for the sentencing to take place after Nov. 28 and citing Hanke’s ongoing health issues, but that was denied.

Hanke “suffers from esophageal stenosis related to radiation treatment he received after he was diagnosed with cancer” years ago, Schneider wrote in the request, adding Hanke was scheduled for surgery to insert a feeding tube, as swallowing has become more difficult over the years. But the procedure has been delayed “several times” due to his “ill health,” and he is currently scheduled for the surgery Oct. 27 at Rockford’s Javon Bea Hospital, according to the court document.

Hanke was arrested on the federal charges in January 2024 in Cape Canaveral, Florida, as he was boarding an international cruise, authorities said.

In a news release at the time, federal authorities said that “victims trusted Hanke with millions of dollars for what they were assured would be safe investments. 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.”

Thursday’s sentencing proceeded, despite the federal government shutting down this week. The federal courts are set to continue normal operations through Oct. 17, according to U.S. Courts news release on its website.

If a shutdown continues after funds to keep the office running are exhausted, the courts will operate under the terms of the Anti-Deficiency Act, which allows work to continue if necessary to exercise judicial powers, according to the release. Each court and federal defender’s office would determine staffing resources under that scenario.

On a local level, Hanke is facing charges for allegedly defrauding a McHenry veterans’ association. The judge allowed him to change his plea from guilty to not guilty last month, after Hanke said he was “coerced” by his former attorney to enter a negotiated plea.

Hanke had originally entered a blind plea, meaning that he didn’t know at the time what the punishment would be. Sentencing on a Class 4 felony ranges from probation to three years in prison.

Hanke was commander at the McHenry-based Sons of the American Legion Squadron 491, giving him access to the funds. He is accused of fraudulently using the legion’s debit card between January 2023 and March 2024, according to court records.

Authorities said Hanke used the card to make cash withdrawals and pay for meals at restaurants, purchases at retail stores and on Amazon and a boat rental in Florida.

American Legion Post 491 Commander Chad Miller said Thursday that “today was a good day” in response to Hanke’s federal sentencing.

“This has been going on for far too long,” Miller said. “We just need to get through this so we can move on as a community.”