Former Veterans Group Commander Sentenced to 4 Years in Prison for Stealing Over $10,000 in McHenry

MCHENRY, Ill. — A Crystal Lake man already serving federal prison time for orchestrating an $8 million Ponzi scheme has received another prison sentence after admitting to stealing thousands of dollars from a veterans organization he once led.

Alan J. Hanke, 62, pleaded guilty Thursday, November 12, to felony theft involving more than $10,000 from the Sons of The American Legion at American Legion Post 491 in McHenry.

McHenry County Judge Tiffany Davis sentenced Hanke to four years in the Illinois Department of Corrections, followed by one year of mandatory supervised release. The sentence will run concurrently with his existing federal prison term.

According to court records, Hanke used a debit card belonging to the veterans organization to make unauthorized purchases and cash withdrawals between January 2023 and March 2024.

Investigators determined that more than $10,000 was spent at restaurants, retail establishments, online retailers including Amazon, and even on a boat rental in Florida.

At the time, Hanke served as commander of the Sons of The American Legion squadron, a position that gave him access to the organization’s financial resources.

The McHenry Police Department investigated the allegations, which resulted in criminal charges being filed in September 2024.

Hanke initially pleaded guilty to a lesser credit card fraud charge in July 2025 but later withdrew that plea after obtaining new legal representation. His attorney argued that the original plea had been entered under a misunderstanding of the law and circumstances surrounding the case.

A judge allowed the withdrawal, and the case was scheduled for trial before Hanke ultimately reached a negotiated plea agreement just days before jury selection was set to begin.

As part of Thursday’s agreement, prosecutors dismissed the separate fraudulent use of a credit or debit card charge.

Hanke was also ordered to pay $962.30 in fines, fees, and court assessments. However, the sentencing documents did not include an order requiring him to repay the stolen money to the veterans organization.

The McHenry County conviction adds to Hanke’s extensive financial fraud history.

In October 2025, a federal judge sentenced him to four and a half years in prison for his involvement in a multimillion-dollar investment fraud scheme operated through IOLO Capital.

Federal investigators determined that Hanke solicited investments between 2018 and 2021 by promising substantial returns and assuring clients that their money was protected against losses.

Instead, prosecutors said millions of dollars were diverted toward personal expenses, including luxury travel, gambling, hotel accommodations, airfare, and an expensive vehicle.

Nearly all the money invested by victims was never recovered.

Federal prosecutors described Hanke as a “serial fraudster” and argued that his continued financial misconduct demonstrated a pattern of criminal behavior.

He was ordered to pay approximately $8.2 million in restitution in the federal case.

Under Illinois sentencing guidelines, Hanke is eligible to serve 50% of his four-year state sentence and has received credit for 268 days already spent in custody.

According to federal prison records cited in the November 12 report, his projected federal release date is August 19, 2029.

The case concludes a lengthy criminal proceeding involving the misuse of funds belonging to an organization dedicated to supporting veterans and their families.