Ontario’s Pigeon King has been sentenced to seven years in prison for defrauding farmers in a Ponzi scheme running across Canada and the U.S., according to regional media.
Arlan Galbraith, founder of Waterloo-based Pigeon King International (PKI), was sentenced Tuesday by Justice Gerry Taylor in Superior Court in Kitchener, following Galbraith’s conviction for fraud in December.
Brian Caldwell, writing Tuesday in the Kitchener-Waterloo Record, quoted Taylor as citing Galbraith’s apparent lack of remorse as an aggravating factor in sentencing. Galbraith “refuses to admit he did anything wrong” and “has not even offered an apology to his victims,” Taylor was quoted as saying.
CTV in Kitchener on Tuesday quoted a Crown attorney as saying no money remained to pay restitution to those who lost their investments in the pigeon-production scheme.
“The sad part about it is, (Galbraith)’ll be out in two years, two and a third years, and he carries on while (investors) are still trying to pay debts,” Bill Top, a former PKI staffer who testified against Galbraith, told CTV’s David Imrie.
Galbraith, now 67, was arrested in December 2010 on charges that he defrauded hundreds of Canadian and U.S. farmers between 2004 and PKI’s bankruptcy in 2008. Taylor denied Galbraith bail in December pending sentencing.
RCMP and Waterloo Regional Police at that time estimated about 1,000 people invested about $20 million to buy breeding pairs of pigeons, while “allegedly being promised guaranteed financial returns.”
Reports during the trial in Kitchener fleshed out those allegations, detailing how early investors were told the end-market for the birds would be pigeon racers and hobbyists, but the business plan later morphed into selling breeding stock to produce meat-grade birds for a never-built processing operation.
The Record quoted a forensic accountant as estimating PKI had $357 million in obligations to breeders at the time of its bankruptcy. Had PKI brought in enough money to pay those, it was estimated, its outlay to farmers over the following 10 years would have had to rise to over $3 billion.
U.S. authorities and Ontario farm media publicly sounded alarm bells over the PKI plan’s viability as early as 2007, warning it had the characteristics of a Ponzi scheme.
It’s now estimated most of the farmers who bought into the scheme in its last three years wound up losing money, the Record reported, noting the plan largely targeted Mennonite, Amish and Hutterite communities.
PKI’s bankruptcy documents from June 2008 showed about $23.5 million owing to the company’s unsecured creditors in Ontario, Manitoba, Saskatchewan and Alberta, and in 18 states across the U.S. Documents on file with BDO Dunwoody show creditors out tens or hundreds of thousands of dollars each, either for birds produced or for “barn rentals.”
Among all PKI’s unsecured Canadian creditors, producers and unpaid vendors, the largest amount owed was $1.5 million, to an Alberta Hutterite colony. — AGCanada.com Network