Star Tribune: Mystery past of Petters associate unfolds (September 15, 2009)

Mystery past of Petters associate unfolds¹

The Los Angeles mystery man who helped Tom Petters allegedly launder billions of investors’ dollars appears to be a disbarred Boston-area attorney with a shadowy criminal history and stints as a wire-wearing government informant.

Newspaper clippings, court rulings and other public documents leave little doubt that the co-defendant known as Larry Reynolds is actually Larry Reservitz, a swindler and drug trafficker who had associations with the New England mob in the 1980s and eventually was placed in the government’s witness protection program.

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He moved on to new crimes, including various check-fraud schemes and, at one point, tried to buy a “truckload” of pot from an undercover Drug Enforcement Administration, according to the article.

Cooperation with the feds

Facing serious time, Reservitz began cooperating with federal authorities in 1984, wearing hidden tape recorders. In 1986 he testified that he was involved in a scheme to cash a bogus check for $2 million out of the account of L. Ron Hubbard, the late founder of the Church of Scientology.

The case made national headlines as the church waged a public battle to locate the culprit who actually wrote the fake check. One media account of the 1986 trial described Reservitz as a “high-rolling gambler … who participated in the second alleged fraud as an informant for the FBI.”

Reservitz eventually served 13 months of an 18-month prison term. Court records indicate Reservitz and his family subsequently entered the Witness Security Program.

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