Without Feathers, Reservitz returned to an old skill to pay the bills: he gambled, playing cards and placing bets on sports events. In the late 1970s federal investigators charged Reservitz with possession of counterfeit money, but a magistrate dropped the charges because federal agents were unable to prove Reservitz knew the money was bogus.
Around 1980 Reservitz appears to have developed a source of information inside the Bank of New England. Reservitz says he then became involved in six or seven major frauds using bogus checks, some of which were, at least initially, quite successful. But two of those schemes eventually went sour and contributed mightily to the downfall of Larry Reservitz.
Reservitz testified he had worked with a man named Irwin Swartz to carry out those scams. Using fraudulent paperwork, they had arranged for a financial investment concern to transmit $2 million to the account of a Chicago jeweler in 1980. After the money transfer had occurred, Swartz, purporting to represent the financial concern, picked up $2 million worth of jewels for the jeweler. It was a scheme that netted Reservitz more than $100,000. But three weeks later, Swartz was arrested in Montreal while making a pick-up at a coin shop in a similar scam. Swartz was convicted of fraud and sentenced to a decade in prison. Despite pressure from investigators, Swartz initially refused to name Reservitz as the mastermind of the scams, because Reservitz was paying him to remain silent. But Swartz eventually cut a deal, and Reservitz was indicted on a variety of charges, including wire fraud, conspiracy, and obstruction of justice.
At about the same time, Reservitz erred again. He attempted to buy a truckload of marijuana form undercover agents of the Drug Enforcement Administration. That cost him a three-year sentence.
Swartz was partly through his testimony in the fraud case when Reservitz cut his own deal. He pleaded guilty on July 13, 1984, to five charges and secretly agreed to cooperate in criminal investigations for the federal government. Reservitz immediately informed investigators of another scheme that he was already helping orchestrate: an attempt to pass a bogus $12 million check from an account at the Bank of New England. The participants, Reservitz said, were Jack W. McNatt, 39, of Boxford, a departmental-systems manager in the corporate-agency department at the bank, and Arcangelo “Bochie” DiFronzo, 49, a Somerville man who was then co-owner of New England Mail Services Group. They were convicted this April following a trial at which Reservitz and his tapes were the star witnesses.
While Reservitz was gathering evidence for his new friends at the FBI, he had supported himself by gambling, he testified. He bet on sporting events, and he played gin with the fellows over at the swank Cavendish Club, in Brookline, where his gregarious personality made him a favorite.
It was while Reservitz was wearing a hidden tape recorder for the McNatt-DiFronzo investigation that he revealed his involvement in the Hubbard-check scheme. According to transcripts, Reservitz, sipping black Sanka in a Cambridge restaurant, chuckled as he told DiFronzo that Scientologists thought Flynn was behind the check scam. “They think that I’m part of a conspiracy to defraud the church, that I’m tied up with Michael Flynn [and other Flynn associates] . . . I’ve never heard of these people. I wouldn’t know these people if they stood up in front of me.”
