Richard G. Frohling, Acting United States Attorney for the Eastern District of Wisconsin, announced that Ronald Pallek from McHenry, Illinois, was sentenced to 48 months in prison on July 22, 2025. Pallek’s sentence comes after he executed an investment fraud scheme causing a loss of over $1.6 million to more than 100 investors in Illinois and Wisconsin.
Court records indicate that Pallek convinced friends, acquaintances, and family members to invest money with him by promising to double their funds using an “iron condor” strategy. Despite his claims, Pallek had never achieved such profits and used the funds for personal expenses and gambling. He continued soliciting new victims even after losing previous investments and sent falsified earning statements while making Ponzi-style payments.
United States District Judge Brett Ludwig remarked on the severity of Pallek’s actions, highlighting his deceitful conduct in maintaining trust with those close to him.
Alongside his prison term, Pallek must pay restitution totaling $1,679,250 and serve three 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.”
FBI Milwaukee Special Agent in Charge Michael Hensle commented on the significant harm caused by Pallek’s Ponzi-like scheme: “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.”
Jason Bushey from IRS Criminal Investigation emphasized the betrayal involved: “Investment fraud doesn’t just drain bank accounts—it corrodes trust and weakens the financial systems we all rely on.”
The investigation was conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation and prosecuted by Assistant United States Attorney Julie F. Stewart.
