Petters -- duped by former mobster?

Tom Petters: was our local pariah duped himself?

Larry Reynolds -- whose real name is Larry Reservitz -- is a swindler and drug trafficker with connections to the New England mob. Petters's attorneys are arguing he is to blame for the entire financial scandal.

Using court documents and newspaper clippings, The Star Tribune has pieced together a fascinating portrait of a man who helped Petters bilk investors out of billions.

Reynolds said he got about $6 million in fees from Petters for laundering $12 billion in funds between 2002 and 2008. He pleaded guilty in St. Paul to conspiracy to commit money laundering and faces up to 20 years in prison.

Petters's trial is scheduled to begin in October. Petters's attorneys are pushing for the case against him to be dropped, suggesting that Petters himself might have been duped by Reynolds.

For more fascinating details on Minnesota's mini-Madoff, the Strib story is well worth a read.