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Pigeon King arrested, charged with fraud

Fraud- and bankruptcy-related charges have been laid in Kitchener, Ont. against the province’s self-styled Pigeon King.

Arlan Galbraith, 62, turned himself in to Waterloo Regional Police on Wednesday in Kitchener, where according to police he was held for a bail hearing at Provincial Court and then released until his next court date Jan. 25.

Galbraith, whose pigeon-breeding business, Pigeon King International, collapsed in 2008, is charged with one count of fraud over $5,000 and four counts under the Bankruptcy and Insolvency Act, Waterloo Regional Police said.

The fraud charge relates to allegations that the accused defrauded individuals in Canada and in the U.S. of “monies exceeding $1 million” between 2004 and the date of bankruptcy in 2008, police said.

The four bankruptcy charges, meanwhile, relate to alleged violations involving “fraudulent contracts and failure to comply with bankruptcy regulations.” No further charges are anticipated at this time, police said.

“Police estimate that approximately 1,000 people invested a total of $20 million in the purchase of pigeons while allegedly being promised guaranteed financial returns,” the Waterloo release said.

The police investigation leading to these charges has reportedly been ongoing since the summer of 2009, before Galbraith was ordered into personal bankruptcy in December last year.

RCMP Cst. Laurence Yim said Thursday that the investigation has involved speaking to all 1,000-odd alleged victims, and taking a similar number of statements.

Pigeon King, which sold breeding pairs of pigeons to farmers and other investors in several provinces and states, had caught the eye of U.S. law enforcement officials as far back as late 2007.

That’s when Iowa’s attorney general publicly expressed “concerns” that the business opportunity PKI offered to would-be pigeon producers might not involve any purpose other than “providing inventory for new growers in furtherance of a ‘Ponzi’ type of investment scheme.”

RCMP describe a Ponzi scheme as one in which investors receive returns not from earnings, but from the principal paid in by later investors. “No legitimate investment exists and the money from later investors is used to pay off earlier obligations.”

“Salivating”

The PKI story, followed doggedly for years by farm media in Ontario, got an additional hit of infamy in February this year when it was profiled on the U.S. TV newsmagazine 60 Minutes, as part of a feature on Ponzi schemes and human gullibility.

Toronto-born 60 Minutes correspondent Morley Safer, in an essay on CBS News’ website in February, described Galbraith as “a plain-faced-salt-of-the-Earth fellow, who favours Iron Boy overalls (and) travelled the breadth of Canada and rural America marketing a scheme that would make hard-pressed farmers rich.”

Galbraith “claimed he had contracts for millions of birds for Asia and the Middle East. The Saudis were salivating for North American birds, and Mr. Galbraith’s Pigeon King enterprise would satisfy the hunger,” Safer wrote.

Galbraith has not yet entered a plea to the charges in Kitchener and the allegations in the charges have not been proven in court.

Neither RCMP nor a Waterloo police spokesperson would say where Galbraith now lives, other than that he still resides in Ontario. Better Farming magazine reported in September that Galbraith’s home and 300-acre property at Cochrane, about 100 km north of Timmins, had been auctioned off for $225,000.

The RCMP’s Yim on Thursday urged Canadians to carefully consider financial proposals that promise exorbitant rates of return.

“If it seems too good to be true, you’ve got to question it,” he said, and report it, if need be, to the Canadian Anti-Fraud Centre. (The CAFC, a joint police agency based at North Bay, Ont., was known until recently as Phonebusters.)

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