Owner guilty of fraud in Pigeon King scheme
Pigeon King International (PKI) owner Arlan Galbraith has been found guilty of fraud in connection with a pigeon breeding scheme that bilked area farmers out of millions of dollars.
Galbraith was placed in jail following the Dec. 6 jury decision and will return to court, likely next month, for sentencing. Prosecutors are seeking a nine-year prison term.
Galbraith, 66, was expected to be back in court on Dec. 12 to set a date for sentencing and to possibly argue for his release on bail until sentencing (the result of the appearance was not known by press deadline).
Former PKI salesman Bill Top declined to comment on the guilty verdict when reached by the Advertiser on Dec. 9.
“I’m not giving interviews,” said Top, a former Mapleton Township resident who resigned from the company in 2006.
Now living in Alberta, Top was one of several former employees to testify against PKI and Galbraith during the four-week trial.
Top testified that he quit Pigeon King amid concern that there was no end market for the pigeons being sold by the company to customers throughout Canada and the U.S.
CTV reported that during cross examination Top told Galbraith, who represented himself in the case, that PKI was “a corrupt business” and Top “did the right thing by stepping down.”
PKI, which employed about 50 people and had offices in Moorefield and Waterloo, declared bankruptcy in 2008, leaving hundreds of thousands of pigeons in limbo (the province eventually spent at least $100,000 for the gassing of about 175,000 pigeons) and some investors wondering if they would lose their farms.
PKI, which had several holding barns throughout central and northern Wellington County, would charge independent breeders up to $500 for a pair of breeding pigeons in return for a guarantee to buy back all their offspring for five or 10 years at about $50 each.
Mapleton Township’s Ron Bults, whose wife Christine testified against Galbraith and PKI, also declined to comment when reached by the Advertiser on Dec. 9.
Metro News reported Christine Bults testified on Nov. 12 that she and her husband got a loan in 2005 for $125,000 to buy breeding pigeons from Galbraith and to renovate a barn on their Drayton-area farm.
When PKI collapsed in 2008, the Bults’ still owed about $86,000 and were left with 3,000 pigeons, Metro News reported.
Many PKI investors reported similar stories of buying 200 pairs of pigeons or more at a time, for a total investment upwards of $100,000, and transforming parts of their farm operation in order to breed pigeons.
Bankruptcy documents filed by PKI indicated seven of 12 Canadian barns rented by the company were located within Wellington County, as were the homes of at least 12 employees. The documents showed total PKI liabilities based in the county (for breeders and rented barns) of over $1.3-million.
Overall, the PKI bankruptcy left hundreds of farmers in Canada and the U.S. with estimated losses of upwards of $20 million - not to mention flocks of worthless pigeons. A forensic accountant examined contracts after the bankruptcy and estimated PKI had $357 million in obligations to existing breeders.
In an email to the Advertiser Crime Busters Now president David Thornton said he felt his website had to act in the mid-2000s to stop Galbraith and PKI.
“I could see that at the rate Galbraith was going and the support he had behind him, he could easily destroy not only the North American farm community, but Europe and Asia as well, where he was planning to go next in his dream to become the world’s largest pigeon producer,” wrote Thornton, who was among the first to warn others of the alleged pyramid or Ponzi scheme.
Galbraith originally offered pigeons for racing but later changed his business model. He often claimed, as he did on the PKI website, the goal was to “offer quality squab at a very affordable price on a massive scale,” which he said had never been done before.
When PKI filed for bankruptcy in 2008 Galbraith sent a letter to breeders claiming the move was motivated by several economic factors and a “spiteful campaign” organized by his critics.
Galbraith took the latter claim to new heights during the trial, during which he was repeatedly advised by a judge to get a lawyer.
Galbraith continued on his own, often in a bizarre manner, and repeatedly suggested at least one media outlet, the “Amish mafia” and the poultry industry were among those conspiring against him and his business.
In the end, however, a jury agreed with the prosecution and several of its witnesses, who stated there was no legitimate end market for the pigeons.
Despite that fact, Galbraith billed himself as a family man and touted his pigeon breeding company as a way to “save” family farms that were in financial trouble, Top previously told the Advertiser.
Top said he quit his PKI position as a U.S. salesman in February of 2006 after he became suspicious about the abnormal growth of the company and its number of breeders.
After repeated attempts to get an answer from Galbraith, Top said his boss finally came clean.
“I sat down with Arlan one day and he actually said, ‘I’m in the business of selling breeders,’” Top said in 2008.
