Reynolds’ alter identity as Reservitz, a disbarred lawyer with a history of committing fraud, can be pieced together in a thick stack of heavily redacted old newspaper articles and court decisions that were filed late last week by Petters.
Petters’ attorneys, Jon Hopeman and Paul Engh, argued that Petters may have been a victim of Reynolds’ money-laundering activities. Reynolds “has a history of concocting and leading grandiose fraudulent schemes and then making secret deals with law enforcement once backed into a corner, just as ... was here,” they wrote.
“He’s the Petters fall guy,” said Bradford Colbert, a state public defender who teaches law at the William Mitchell College of Law. “You can argue that he’s the guy behind all of this and Petters was taken advantage of by this Reynolds.”
That still might be difficult to prove, however. Government prosecutors may not need to call Reynolds at all because they will have the testimony of other direct participants in the alleged fraud on which to help base their case. The U.S. attorney’s office declined to comment Wednesday.
Federal prosecutors do not have to call Reynolds as a witness in the case. But given the intense defense interest in the background of Reynolds, he could be called as a hostile witness by the defense team.
The courtroom drama that could follow would pit lawyers representing Petters, the well-known and once philanthropic Twin Cities businessman who owned Sun Country Airlines and Polaroid even as he allegedly duped investors out of billions, against Reynolds, who engaged in insurance fraud, check forgery and drug trafficking, fled the country for a period and once wore a wire as a government informant.
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