Illinois Man Sentenced to 48 months’ Imprisonment for Investment Fraud Scheme

Richard G. Frohling, Acting United States Attorney for the Eastern District of Wisconsin, announced that on July 22, 2025, Ronald Pallek (55) of McHenry, Illinois, was sentenced to 48 months’ incarceration for executing an investment fraud scheme that resulted in a loss of over $1.6 million to over 100 investors in Illinois and Wisconsin.

According to court records, Pallek engaged in a years’ long scheme during which he convinced friends, friends of friends, and family members to give him money to invest. Pallek promised these investors that he could double their money using an “iron condor” strategy of investing even though Pallek knew that he had never been able to generate such profits. Despite losing his victims’ funds in the market or spending them for his own benefit, Pallek continued to solicit additional victims, even promising commissions to those he previously had defrauded. During the scheme, Pallek repeatedly sent falsified earning statements to his victims, lied about his purported successes, and made Ponzi-style payments to prior victims with new victim funds. The investigation also revealed that Pallek used the funds to pay for his own living expenses, including his mortgage and for his car, and for gambling activities.

In announcing his sentence, United States District Judge Brett Ludwig noted that Pallek engaged in a “serious criminal enterprise” and kept his scheme going by “cultivating trust with friends and acquaintances” and through repeated “acts of deceit and false conduct.”

In addition to the 48-month period of incarceration, Pallek was ordered to pay restitution in the amount of $1,679,250.00, and to serve a period of 3 years of supervised release.

“Mr. Pallek abused the trust of his victims, targeting hard-working individuals and small business owners,” stated Acting U.S. Attorney Frohling. “The sentence in this case reflects not only the significant financial but also the long-lasting emotional harm Mr. Pallek inflicted, and I commend everyone involved in holding him accountable and seeking justice for his victims.”

“Mr. Pallek deceived investors and caused significant financial and emotional harm through a Ponzi-like scheme,” said FBI Milwaukee Special Agent in Charge Michael Hensle. “The FBI will continue its relentless pursuit of investigating those who hide behind financial fraud as one part in our mission to protect the American people. We continue to work alongside our law enforcement partners to ensure that justice is served.”

“The cruelty of this scheme wasn’t just in the dollars stolen—it was in the betrayal. This defendant exploited the trust of those closest to him, using friends and family like an ATM to fund his lifestyle,” said Jason Bushey, Acting Special Agent in Charge, IRS Criminal Investigation, Chicago Field Office. “Investment fraud doesn’t just drain bank accounts—it corrodes trust and weakens the financial systems we all rely on. IRS Criminal Investigation will continue to pursue those who exploit personal relationships for personal gain.”

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. It was prosecuted by Assistant United States Attorney Julie F. Stewart.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.