Pigeon King’s Galbraith facing fraud charges

December 7th, 2010 Other News

(Scroll to bottom for links to past coverage.)

COCHRANE, Ont. — A Canadian man accused of creating a Ponzi scheme to farmers in both Canada and the United States is now facing charges of fraud and bankruptcy law violations in Canada.

Arlan Galbraith, 52, of Cochrane, Ontario, owner of Pigeon King International, was arrested and charged with one count of fraud over $5,000 and four counts under the Bankruptcy and Insolvency Act.

According to the Royal Canadian Mounted Police Kitchener Detachment Commercial Crime Section and the Waterloo Regional Police Service Fraud Branch, an investigation they conducted resulted in the allegations of fraudulent activities and resulted in Galbraith’s arrest.

The Farm and Dairy initially brought readers the story of the Pigeon King and the alleged scheme that involved selling pigeons to farmers for breeding and raising.

The scheme involved renting barns and farmers purchasing the birds to be marketed as squab. The scheme involved farmers in Ohio, Pennsylvania, New York, Iowa, Indiana, Michigan and Kansas, as well as in Canada.

Police claim a total of $1 million was bilked out of people in Canada and the United States between 2004 and 2008.

Estimates show that about 1,000 people invested a total of $20 million in the purchase of pigeons into the scheme.

When Galbraith filed bankruptcy in June 2008, he revealed debts of more than $23.5 million to breeders and vendors across the U.S. and Canada. He also owed over $2.8 million to owners of barns he rented across the U.S. and Canada. There were a total of 24 U.S. operators renting barn space including four in Ohio and six in Pennsylvania.

Galbraith had promised investors that the pigeons were to be sold in pairs to farmers for breeding as part of a plan to ultimately produce pigeon meat.

He also owed money to a total of 49 Ohio breeders and 85 in Pennsylvania.

Galbraith appeared for a bail hearing Dec. 1 and was released. Another court date is set for Jan. 25, 2011.

The Farm and Dairy is working to uncover more details of the criminal investigation in the Canadian court system.

Related coverage:

Pigeon King International: Breeders struggle to get rid of pigeons (7/10/2008)

Pigeon King owes $23 million (7/10/2008)

Bankruptcy filing says Pigeon King owed $23 million (7/3/2008)

UPDATED: Pigeon King goes bankrupt (6/26/2008)

Pigeon King International bankrupt (6/19/2008)

Pigeon King gets wings clipped in Maryland (6/12/2008)

Washington finalizes cease and desist order against Pigeon King International (5/15/2008)

Washington takes action against Pigeon King International (5/1/2008)

Pigeons point to Ponzi scheme (3/13/2008)

Pigeon idea may not fly: Iowa investigating company for scheme (2/21/2008)

You’re raising what? Pigeons! (9/13/2007)

Pigeon King owes $23 million

July 10th, 2008 Andrea Zippay

SALEM, Ohio — More details have emerged regarding the financial status of the defunct Pigeon King International and its bankruptcy proceedings.

In a statement signed June 26, PKI owner Arlan Galbraith revealed debts of more than $23.5 million to breeders and vendors across the U.S. and Canada.

Galbraith sent a letter to breeders telling them of his bankruptcy June 17. The formal filing was made July 2.

Galbraith revealed owned assets of only $46,003, including a 2007 Dodge 1500 pickup truck and 2008 GMC van valued at $20,000 each.

He listed ‘trade fixtures’ at his Waterloo and Moorefield offices at $3,000 each, and the remaining $3 of his assets were attributed equally to livestock; loans, advances or accounts receivable; and cash on hand.

In the lurch

Galbraith’s accounts payable totaled a staggering $23,542,400, including money owed to Alma Poultry Farm in Moorefield, Ontario; various barn rental or pigeon breeding creditors, and trade accounts.

At the time of the bankruptcy, Galbraith owed some $2.8 million to owners of barns he rented across the U.S. and Canada.

One of those barn owners, Rudy Gingerich of Danville, Ohio, previously told Farm and Dairy he was the first in the U.S. to go into business with Galbraith.

Gingerich would travel the state to pick up about 3,000 young birds Ohio breeders were selling back to the company each month, and hold them on his farm in the barns rented by Galbraith.

According to the filing, Galbraith rented Gingerich’s barns for $2,100 a month. His losses over the next four years from Galbraith’s breach of contract total more than $100,000.

The highest rental loser is a farm in Moorefield, Ontario, which had been paid $5,000 a month in rent, for a total loss of $240,000.

Bankruptcy documents identified 12 Canadian and 24 U.S. operators who rented barn space to Galbraith. In the U.S., four are in Ohio and six are in Pennsylvania.

Breeders

Although Galbraith previously refused to provide a full list of contracted breeders, the latest filing shows 168 breeders in Canada and 277 in the U.S. Those breeders were owed $20 million, according to the filing.

However, the list is likely incomplete since it does not include the names of all known breeders Farm and Dairy has interviewed about pigeon breeding in the past year.

The list names 49 Ohio breeders and 85 in Pennsylvania.

Galbraith’s top creditor in the U.S. was a farm in Green Ridge, Mo., owed $700,000. The next two creditors on the list debt-wise were in Republic, Ohio, at $250,000; and Enon Valley, Pa., at $225,000.

Vendors

Galbraith also carried $277,000 of debt owed vendors, according to the filing. Some of those vendors included radio stations, print publications, feed stores, printing companies and Bell Canada telephone.

The filing also included a list of 16 people previously employed by Pigeon King International. The filing said those people were mailed notice of the bankruptcy the week of July 1.

Still more

Galbraith’s total amount owed to abandoned contractors will climb higher as more details about finances emerge.

According to bankruptcy trustee BDO Dunwoody Limited, Galbraith initially operated the pigeon breeding business as a sole proprietorship, so many of the early contracts are with him personally and not the Pigeon King International entity.

BDO Dunwoody Limited is not representing Galbraith, only Pigeon King International, in proceedings. Figures of Galbraith’s own debts were not available.

No assets

Breeders with contracts with PKI, Galbraith or his other company, Benn Contracting Inc., were included in the filing.

Galbraith’s own Sacred Dove Ranch, which was incorporated in February 2007, “apparently had no assets or liabilities,” according to the bankruptcy trustee handling the matter.

Related coverage:

Pigeon King International: Breeders struggle to get rid of pigeons (7/10/2008)

Pigeon King owes $23 million (7/10/2008)

Bankruptcy filing says Pigeon King owed $23 million (7/3/2008)

UPDATED: Pigeon King goes bankrupt (6/26/2008)

Pigeon King International bankrupt (6/19/2008)

Pigeon King gets wings clipped in Maryland (6/12/2008)

Washington finalizes cease and desist order against Pigeon King International (5/15/2008)

Washington takes action against Pigeon King International (5/1/2008)

Pigeons point to Ponzi scheme (3/13/2008)

Pigeon idea may not fly: Iowa investigating company for scheme (2/21/2008)

You’re raising what? Pigeons! (9/13/2007)

Pigeon King International: Breeders struggle to get rid of pigeons

July 10th, 2008 Andrea Zippay

SALEM, Ohio — Randy Snyder took his time researching the Pigeon King International breeding opportunity before he jumped in with both feet and his entire life’s savings.

That was in December 2007, when he signed a $50,000 contract with Arlan Galbraith and his Pigeon King International business. His brother bought a contract, too, and the two started raising birds near Bucyrus, Ohio.

The opportunity, which promised the Snyders’ initial investments back within 12-18 months, was for them to buy breeding pairs of pigeons and sell the offspring back to the Canadian company.

But the brothers’ first shipments of young birds — scheduled to go out this week — never went, and the paychecks promised them are now just a dream.

The Pigeon King business, widely criticized as a fraud, went bankrupt in June.

The Snyders and other breeders like them, caught in the middle of the Pigeon King International bankruptcy, are struggling with hundreds or thousands of pigeons and wondering what they’ll do next.

Empty pockets

Randy Snyder, who said he’s recovering from a motorcycle accident that broke his back and is still unable to work, said he’s hurt by the whole situation.

“I wanted a way to support myself, and invested my life savings. Now Arlan is sitting with a big, black bag of money,” he said.

He and his brother found out about the bankruptcy last month by a fluke. Getting ready to ship their first birds, the brothers had to call to tell Galbraith how they wanted paid: They could be paid days in advance or after they made the shipment, Snyder explained.

Both brothers called the pigeon company’s Canadian office to report their preference. All they got were full voice mail boxes. The next day, they were notified by letter of the bankruptcy.

Getting rid

On July 3, Snyder said he was in the process of disposing of his birds by gassing and burying them.

“The whole thing makes me sick. I was out there hand feeding these babies with syringes and now I have to kill them? I can’t believe I been so stupid.”

Nearby, in Ashland County, Jim Watson knows he can’t afford to buy much more feed to care for the 4,000 birds he owns.

But he’s not sure he wants to gas and bury this birds, either.

In the letter Galbraith sent to his breeders to notify them of the bankruptcy, he suggested letting the birds fly free.

“Even though they’re dumb birds, you get attached. I hate to kill them, but I also don’t think my neighbors would appreciate that many loose up in the air,” Watson said.

Hardship

It was never Watson’s dream to go into the pigeon business, he said. The farm he purchased 11 months ago, on the Ashland-Wayne county line, came with the birds.

Watson said his barn was a PKI breeder barn, owned by Galbraith. Watson billed Galbraith for rent space and feed, and waited for the young birds to be picked up when they reached 5 weeks old.

He used the income he made raising the birds to make payments on the farm, and without that income, it’s getting more difficult to get by each month, Watson said.

He’s not been reimbursed for the last $1,800 in feed he put into the pigeons.

“That’s not a big loss compared to others you’re hearing, but I can’t afford to buy much more feed unless a market is proven.”

Watson said he’s been busy making phone calls to trap shooting associations, hoping to find someone with a need for the pigeons, but with no luck.

“I don’t want to have to kill them,” he said. “But I’m not even sure I have what are truly squab pigeons, if they do find a meat market.”

“I just really would like to get out at this point. Maybe it will all come together,” he said.

Baited

Randy Snyder believes Galbraith used Amish businessmen as bait to lure others into signing contracts to raise pigeons.

“Everybody believes an Amish guy when he tells you how good it is,” Snyder said of the income potential Galbraith advertised and that he saw with his own eyes on the farms he visited before signing a contract.

“The Amish won’t sue. He preyed on them,” Snyder said.

Telephone

“I left a [phone] message for Arlan and asked him to please send my money back. There’s no reason I should lose my house because he lied to me,” Snyder pleaded.

“He called all these people fearmongers. He’s the biggest mongrel out there. He made millions off guys like me. The least he could do is give our money back.”

Come together. “Everybody’s embarrassed they were too damned stupid to fall for it. We admit it. We were taken,” Snyder said.

The bankruptcy trustee handling the case has called a meeting of creditors July 30 in Kitchener, Ontario.

“Nothing is going to happen [to Galbraith] unless us breeders get together and make a noise. Something has to come out of this,” Randy Snyder said.

“We’ve got to come out of the woodwork and stick together.”

Related coverage:

Pigeon King International: Breeders struggle to get rid of pigeons (7/10/2008)

Pigeon King owes $23 million (7/10/2008)

Bankruptcy filing says Pigeon King owed $23 million (7/3/2008)

UPDATED: Pigeon King goes bankrupt (6/26/2008)

Pigeon King International bankrupt (6/19/2008)

Pigeon King gets wings clipped in Maryland (6/12/2008)

Washington finalizes cease and desist order against Pigeon King International (5/15/2008)

Washington takes action against Pigeon King International (5/1/2008)

Pigeons point to Ponzi scheme (3/13/2008)

Pigeon idea may not fly: Iowa investigating company for scheme (2/21/2008)

You’re raising what? Pigeons! (9/13/2007)

Bankruptcy filing says Pigeon King owed $23 million

July 3rd, 2008 Andrea Zippay

SALEM, Ohio — More details have emerged regarding the financial status of the defunct Pigeon King International and its bankruptcy proceedings.

In a statement of affairs for the company, signed June 26, PKI owner Arlan Galbraith revealed debts of more than $23.5 million owed to breeders and vendors across the U.S. and Canada.

Galbraith revealed owned assets of only $46,003, including a 2007 Dodge 1500 pickup truck and 2008 GMC van valued at $20,000 each.

In the lurch

Galbraith’s accounts payable totaled a staggering $23,542,400, including money owed to a poultry farm in Ontario; various barn rental or pigeon breeding creditors, and trade accounts.

At the time of the bankruptcy, Galbraith owed some $2.8 million to owners of barns he rented across the U.S. and Canada.

Bankruptcy documents identified 12 Canadian and 24 U.S. operators who rented barn space to Galbraith. In the U.S., four are in Ohio and six are in Pennsylvania.

Breeders

Though Galbraith previously refused to provide a full list of contracted breeders, the latest filing shows 168 breeders in Canada and 277 in the U.S. Those breeders were owed a total $20 million, according to the filing.

The list names 49 Ohio breeders and 85 in Pennsylvania.

Vendors

Galbraith also carried $277,000 of debt owed vendors, according to the filing. Some of those vendors included radio stations, print publications, feed stores, printing companies and Bell Canada telephone.

Still more

Galbraith’s total amount owed to abandoned contractors will climb higher as more details about finances emerge.

According to bankruptcy trustee BDO Dunwoody Limited, Galbraith initially operated the pigeon breeding business as a sole proprietorship, so many of the early contracts are with him personally and not the Pigeon King International entity.

BDO Dunwoody Limited is not representing Galbraith, only Pigeon King International, in proceedings. Figures of Galbraith’s own debts were not yet available.

Click here for more details as this story develops.

Related coverage:


UPDATED: Pigeon King goes bankrupt (6/26/2008)

Pigeon King International bankrupt (6/19/2008)

Pigeon King gets wings clipped in Maryland (6/12/2008)

Washington finalizes cease and desist order against Pigeon King International (5/15/2008)

Washington takes action against Pigeon King International (5/1/2008)

Pigeons point to Ponzi scheme (3/13/2008)

Pigeon idea may not fly: Iowa investigating company for scheme (2/21/2008)

You’re raising what? Pigeons! (9/13/2007)

UPDATED: Pigeon King goes bankrupt

June 26th, 2008 Andrea Zippay

Originally posted 6/20/2008 at 11:20 a.m. EST:

SALEM, Ohio — What once looked like a high-flying and profitable opportunity — a business sold under the promise to save family farms — has crashed to the ground.

Arlan Galbraith filed for bankruptcy on his Pigeon King International pigeon breeding business June 17.

The voice mail box at Pigeon King headquarters in Waterloo, Ontario, was full the morning of June 19 and not accepting messages. Communications manager Shelley Mason did not return messages left on her cell phone.

It’s true

In a letter dated June 17, Galbraith blamed fear mongers for the business’ collapse and had this message for breeders who worked for him:

“Recently, there has been more money going out of the bank than coming in, and there is nothing left. I have had to retain the services of a bankruptcy trustee to take over the affairs of the company. This means my hands are now tied and the trustee is responsible for everything.”


Scroll to the bottom of this page or click here for the full text of the letter Arlan Galbraith sent to his pigeon breeders.

In the letter, Galbraith mentioned he was suffering from Hodgkin’s lymphoma and that “battling the vicious, rabid fear mongers has proven much more difficult” than fighting the cancer.

Galbraith blamed those outsiders for “[eradicating] the confidence of everyone contemplating doing business with PKI” and said widespread negativity in the media have prevented him from borrowing money or selling the business.

Galbraith called his business “dead in the water” and “reduced to ashes by fear.”

Galbraith called his business “dead in the water” and “reduced to ashes by fear.”

Business background

Pigeon King International Inc., which billed itself as the world’s second-largest pigeon breeder, is based in Waterloo, Ontario.

The company, owned and operated by Arlan Galbraith, invited investors and buyers to pay as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs.

Growers entered contracts that promised a guaranteed selling price and market for the birds’ offspring. Galbraith repeatedly told breeders the birds were to be sold to new investors or on the market for meat or as pets.

According to the company Web site, Galbraith also had plans to eventually offer pigeon as an alternative to chicken on the global market and was “developing a special line of squabbling meat pigeons.”

Criticism

Many criticized the business venture, claiming it a fraud or a Ponzi scheme.

A Ponzi scheme is defined as an investment fraud in which early investors are paid with money obtained from later ones in order to create the illusion of profitability.

Since December 2007, Iowa, Washington and Maryland have investigated and then filed cease and desist orders against Galbraith’s company and ordered him to stop doing business or soliciting growers in those states.

Galbraith told Farm and Dairy in a May 12 phone interview he had also voluntarily agreed not to do business in South Dakota.

Expenses

In one paragraph of his two-page letter, Galbraith mentioned overall costs of doing business as a factor in the business’ collapse.

He attributed cash shortfalls to costs incurred in holding barns, feed, fuel, and the weakening U.S. and Canadian economies.

Galbraith also said the Canadian government wants him “to pay hundreds of thousands of dollars in back [Goods and Services Tax],” which he did not collect from his breeders in Canada.

“In order to pay this huge amount I will have to sell my home,” he wrote.

Reactions

Ohio breeders involved in the collapse are expressing a variety of reactions.

Rudy Gingerich, who bred pigeons on his Pigeon Paradise Farm in Knox County, was the first in the U.S. to go into business with Galbraith.

After a visit to Canada in late 2004 — where he recalls a friendly Galbraith picking him up at the bus depot and taking him for tours of Canadian operations — Gingerich ordered 300 pairs of the breeders.

Seven months later, Galbraith visited Ohio and told the Amishman how quickly PKI was expanding. Galbraith needed a holding barn in the states, he said.

He cut Gingerich a $20,000 check on the spot to pay for concrete for that barn, eventually paid for five more just like it on Gingerich’s property and even shared plans for a Canadian pigeon processing plant with the man.

“I took him for an honest guy, but I guess not,” Gingerich said June 19.

His role

Gingerich, who was recruited as an agent for Galbraith, would pick up about 3,000 young birds Ohio breeders were selling back to Galbraith each month.

Those young birds were housed in holding barns on Gingerich’s farm until he got word of a new contract from Galbraith, at which time he’d deliver pairs of birds to the new breeder.

Gingerich said he had “no idea for sure how many” pigeons he had in each of the six holding barns on his farm, but could say that he has about 8,000 ‘homers’ in his own grower barn.

With two varieties of pigeons in his barns — high flyers, which are a crossbred, smaller pigeon, and homers, which are more of a meat-type bird — he’s got to find something to do with the birds, and quickly.

He’s not alone in it, either: Gingerich estimated that there are 70 pigeon breeders in Ohio affiliated with Galbraith who must now sell their flocks.

Liquidation

Last week, before Galbraith pulled the plug, Gingerich brought in 50 tons of feed for the birds, he said. Under contract, Galbraith used to pay for the feed costs Gingerich had as an expense for ‘warehousing’ birds.

The morning after the collapse, Gingerich paid $10,000 of his own savings to the feed mill in an attempt to save his own name and reputation, and to not hurt the feed business.

“I feel bad about it. I told the guy I’m going to pay for [the feed.] But I’m not going to buy any more.”

“I have no idea how I’m going to get rid of the birds. It’s sad.”

Galbraith wrote in his letter that breeders were free to dispose of the birds as they see fit.

“You can sell them for whatever price you want to whomever you want. You can auction them off. You can let them free fly [sic] and forage in the fields with the wild pigeons. You can gas them and bury them on your farm. The choice is yours.”

Gingerich, who said he feels let down, is trying to find a silver lining in the situation.

He said he plans to continue feeding the homers and is working with Case Farms as an outlet for the birds.

“There’s still a ‘maybe’ for me. Others are losing serious money. That’s what hurts me.”

More optimistic

Tim and Lucy Burkholder, who own 220 breeding pairs and about 800 young pigeons on their Richland County farm, were optimistic about their future.

The family had been raising pigeons nearly three years and are “not quite sure” what will happen now, Lucy Burkholder said.

“Tim always wondered how long it would last. Of course it was a shock to hear, but we didn’t think it couldn’t happen,” she said.

“It sucks. Something good was going and all of a sudden it’s not going at all anymore,” Tim Burkholder said, noting the pigeon contracts weren’t his main income.

Under pressure

Burkholder, who declined to say whether he had made back his initial investment, pointed out that while many people will be upset with the bankruptcy news, nobody has proven Galbraith did anything illegal.

“They have nothing to pin him down on. He’ll leave a lot of people sitting, but nobody could take that false pressure as long as he did,” Burkholder said of media and outsiders’ criticism of the business.

“It’s not all the media’s fault, but it’s not all his fault, either.”

The Burkholders had already put the wheels in motion June 19 to find another market for the pigeons they’ve got.

Tim Burkholder said he’s looking into plans to “hook up” with a squab processor, which would allow him to sell 4-week-old birds on the meat market.

He acknowledged the price he’d receive for the young birds would be less than what Galbraith was paying him, but pointed out he’d have less feed expense to help balance the payout.

The Burkholders, and numerous other Midwest breeders involved in the business, were previously selling pigeons to Galbraith at 24 weeks of age.

“All I need is a market now. I don’t need to panic. There’s not going to be as much money, but I’m not sitting bankrupt,” Burkholder said.

Share your thoughts and discuss the Pigeon King International bankruptcy with other readers at Farm and Dairy’s Community forums. Click this link to go there now.


Galbraith’s letter to breeders

Following is the exact text of the letter Arlan Galbraith issued to growers and breeders following the collapse of his Pigeon King International business:

Notice:

Effective June 17, 2008, Pigeon King International Inc. and Benn Contracting Inc. have been destroyed by FEAR MONGERS.

My heart is breaking as I write this letter. During the past few years I have been fighting a battle with a serious type of Cancer called Hodgkin’s Lymphoma. I was motivated to beat this Demon Cancer, by a strong desire to continue to build my company for the benefit of all involved, so I poured my heart and soul into it.

However, battling the vicious, rabid FEAR MONGERS has proven much more difficult compared to my episode with Cancer.

PKI records prove how well the company was doing prior to the onslaught of jealous protesters bent on destroying me, my company and everyone associated with the company. In fiscal year 2007 PKI paid out over (12,000,000.00) Twelve Million Dollars to purchase pigeons from North American Farmers.

You all know who the fear mongers are and you know their RING LEADER. You also know how they used the internet, email, phone, mail, fax and the media to spread their hateful attack and poison the minds of the public. The FEAR MONGERS have been able to eradicate the confidence of everyone contemplating doing business with PKI. Potential clients have adopted a wait and see attitude. Bankers have been adversely influenced against PKI and are discouraging their clients from doing business with us. Because of widespread negativity in the media PKI cannot borrow money or sell the business. Government regulators have become nervous because of the media coverage against us. The FEAR MONGERS have targeted a wonderful business with a proven track record and outstanding business model, and undermined it to the point where it is dead in the water. During the past several months, we have lost hundreds of deals, costing us millions of dollars, all because of the FEAR MONGERS. In the past week alone we lost several very large deals we were counting on. Had it not been for these multi million dollar losses, we would be in the same strong position we were in prior to the Fear Mongers attacking us on every front.

Other contributing factors have also worked against us at the same time. The need for and cost of establishing, maintaining and operating holding barns has sky rocketed. Our overall feed costs have gone through the roof. In addition, fuel costs are rising rapidly with no end in sight. The USA economy and our own Canadian economy are weakening, which has a negative impact on the confidence of our customers.

However, had the FEAR MONGERS not targeted us, we would still be a thriving company establishing the first of several squab processing plants. Instead we have been reduced to ashes by FEAR. Fear is the strongest weapon in the world and it has been used since the beginning of time to manipulate and control people.

To make matters worse, in the early years, we did not charge GST (Goods and Services Tax) on our Canadian sales of breeding stock to farmers. I believe that pigeon breeding stock was no different than poultry (where there is no GST payable). However the government ruled that they wanted GST on pigeons but not poultry. Now the government wants me to pay hundreds of thousands of dollars in back GST which I did not collect from my breeders in Canada. In order to pay this huge amount I will have to sell my home.

Recently, there has been more money going out of the bank than coming in, , and there is nothing left. I have had to retain the services of a Bankruptcy Trustee to take over the affairs of the company. This means my hands are now tied and the Trustee is responsible for everything.

All breeders and landlords will be receiving written notice from the Trustee in the next few days, which will explain the role of the Trustee in this matter. Farmers with the free $8.00 contracts and Benn Contracting free contracts, and landlords/caretakers of company owned flocks, plus all holding barn landlords are free to deal with the pigeons in their barns in any way they choose. You can sell them for whatever price you want to whomever you want. You can auction them off. You can let them free fly and forage in the fields with the wild pigeons. You can gas them and bury them on your farm. The choice is yours. When your inventory of feed is used up, PKI or the trustee cannot supply more feed. Our staff is unemployed June 20, 2008.

Some of you may feel better if you have someone to blame for what is happening. In that case, blame the FEAR MONGERS AND ESPECIALLY THEIR RING LEADER. They have obliterated an awesome company with a great staff, and they did their evil deed with no regard for the employees, contractors, landlords and all the fine family farmers involved with the company.

Because of the horrendous stress I am under, my Cancer will very likely flare up again. I am sure these horrible FEAR MONGERS are proud of what they have done, and will likely brag about how they brought down The Pigeon King.

My heart goes out to all who are associated in any way with me and my companies.

God Bless!

Yours Very Truly,

Arlan Galbraith

President of Pigeon King International Inc. and

Benn Contracting Inc.

Pigeon King International bankrupt

June 19th, 2008 Andrea Zippay

SALEM, Ohio — What once looked like a high-flying and profitable opportunity — and sold under the promise to save family farms –seems to be crashing to the ground.

At least one Ohio breeder has confirmed rumors Arlan Galbraith has filed bankruptcy on his Ontario-based Pigeon King International pigeon breeding business.

Lucy Burkholder, whose husband Tim owns 1,000 pigeons as part of a contract with Galbraith, said by phone June 19 that the couple confirmed the rumors were true.

The Burkholders raise pigeons in Shiloh, Ohio, in northern Richland County. Lucy Burkholder said the family had been raising pigeons nearly three years and are “not quite sure” what will happen now.

“Tim always wondered how long it would last. Of course it was a shock to hear, but we didn’t think it couldn’t happen,” she said.

The voicemail box at Pigeon King headquarters in Waterloo, Ontario, was full Thursday morning and not accepting messages. Communications manager Shelley Mason was not immediately available for comment via her cell phone.

Check back for further developments in this story.

Pigeon King gets wings clipped in Maryland

June 12th, 2008 Andrea Zippay

SALEM, Ohio — Another state has clipped the wings of Pigeon King International.

Maryland’s Securities Commissioner filed an order requesting Pigeon King International and its owner, Arlan Galbraith, show cause for doing business there.

The order, filed May 19, said the state had “determined that grounds exist to allege that Pigeon King violated the registration, disclosure, and antifraud provisions of the Business Opportunity Act.”

The order also ordered PKI to cease and desist from offering the business opportunity and to prove why the company shouldn’t be permanently barred from doing business in the state.

Order of events

According to the order, Pigeon King sold a business opportunity to a resident of Gambrills, Md., in April 2007.

Galbraith agreed to sell that person 170 pairs of breeding pigeons at $200 per pair. Galbraith also agreed to buy back all offspring produced for $25 per bird.

Based on that scenario, Commissioner Melanie Senter Lubin said Pigeon King had sold a business opportunity in the state, but was never registered to do so. Galbraith also failed to provide that buyer a disclosure statement, which is required under state law.

The state said Galbraith “made omissions of material fact … by failing to provide a prospective buyer with financial statements … and substantiation for its ability to repurchase pigeons at a guaranteed price for a fixed period of time.”

Galbraith had through the end of the day June 5 to respond to the order, according to commission spokesperson Raquel Guillory.

As of presstime, Guillory had not returned phone calls to say whether Galbraith had complied. She previously said if no response was received, the order would go into effect and Galbraith’s business will be barred immediately and permanently.

Others

Since the beginning of March 2008, Iowa and Washington have both filed cease and desist orders against Galbraith and his company, with allegations that the business is a scheme or a fraud.

Galbraith told Farm and Dairy in a May 12 phone interview he had also voluntarily agreed not to do business in South Dakota.

Why pigeons? Pigeon King International, which bills itself as the world’s second-largest pigeon breeder, invites investors and buyers to invest as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs.

Galbraith, in turn, contracts with the growers to buy back the offspring. He’s told them the pigeons will be sold to new investors, and on the marketplace for meat or as pets.

Galbraith’s Web site says he has contracts with hundreds of growers in North America and tells of plans to eventually offer pigeon as an alternative to chicken on the global market. He’s currently “developing a special line of squabbling meat pigeons,” according to the site.

Related coverage:

Washington finalizes cease and desist order against Pigeon King International (5/15/2008)

Washington takes action against Pigeon King International (5/1/2008)

Pigeons point to Ponzi scheme (3/13/2008)

Pigeon idea may not fly: Iowa investigating company for scheme (2/21/2008)

You’re raising what? Pigeons! (9/13/2007)

Washington finalizes cease and desist order against Pigeon King International

May 15th, 2008 Andrea Zippay

SALEM, Ohio — The State of Washington has finalized its cease and desist order against the Canadian company Pigeon King International.

That state’s securities division entered the final consent order May 2.

Investigation showed pigeon breeder Arlan Galbraith and his company violated the state’s Business Opportunity Fraud Act and were not registered with the state to offer business opportunities there.

Galbraith said in a phone interview May 12 that the order “doesn’t mean anything, really. It sounds important, but it’s not,” and credited the action to “lots of troublemakers out there who are complaining.”

“I’m not even interested in doing business there. I’m not interested in doing business in any state where I’m not welcome, case closed.”

The state also fined Galbraith $1,000.

Jealousy

Galbraith dismissed the Washington action and said he’s also voluntarily agreed not to do business in South Dakota.

“A lot of people are trigger-happy, and I don’t know why. They assume I started this business a couple months ago, when in fact I have a perfect track record of paying [growers] for pigeons every four weeks for the past seven, almost eight years,” Galbraith said.

“It’s always profitable to the farmer. I challenge any hog or cattle business to make the same claims on a consistent basis,” he said.

Galbraith also pointed fingers at “the troublemakers” as being jealous of his growers.

“There’s a lot of jealousy out there, not just of me, but also the people who raise pigeons. They’re very successful. There are always complaints from those who don’t do business with us, from the friends and neighbors of the growers. That’s not a good reflection on human nature, is it?”

In the money

Pigeon King International, which bills itself as the world’s second-largest pigeon breeder, invites investors and buyers to invest as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs.

Galbraith, in turn, contracts with the growers to buy back the offspring. He’s told them the pigeons will be sold to new investors, and on the marketplace for meat or as pets.

Galbraith’s Web site tells of plans to eventually offer pigeon as an alternative to chicken on the global market. He’s currently “developing a special line of squabbling meat pigeons,” according to the site.

Warned

In March, the Iowa attorney general’s office finished its investigation into the company and warned of its concern that Pigeon King International was a Ponzi scheme.

A Ponzi scheme is defined as an investment fraud in which early investors are paid with money obtained from later ones in order to create the illusion of profitability.

Opportunity

Pigeon King International owns 1,600 pairs of breeding pigeons in Ohio alone, plus 1,300 pairs in Indiana and in Pennsylvania, according to the Web site. A number of farmers in both Ohio and Pennsylvania also raise pigeons for the firm.

One southeast Ohio farmer recently reported receiving a mailed postcard that touts the benefits of becoming involved in pigeon breeding with Galbraith, proof the company continues its push in the Buckeye State.

Galbraith said his company currently does business in several U.S. states and Canadian provinces.

Last fall, Farm and Dairy featured Monroe County pigeon breeders David and Marlene Rinkes, who said they have never had trouble with receiving payment from Galbraith and dismissed the idea that breeding pigeons was a scheme.


Video

See Pigeon King Arlan Galbraith explain his business on Canadian talk show The Hour.


Related coverage from Farm and Dairy:

Washington takes action against Pigeon King International (5/1/2008)

Pigeons point to Ponzi scheme (3/13/2008)

Pigeon idea may not fly: Iowa investigating company for scheme (2/21/2008)

You’re raising what? Pigeons! (9/13/2007)

Washington takes action against Pigeon King International

May 1st, 2008 Andrea Zippay

SALEM, Ohio — The state of Washington has ordered Arlan Galbraith and his company, Pigeon King International, to cease and desist operations there.

Washington’s securities division filed the order March 19 after it determined the company violated the state’s Business Opportunity Fraud Act.

Any company that offers a business opportunity in that state must register with the securities division, and Galbraith or PKI had not registered, according to state records.

Timeline

Since the order was handed down, Galbraith has requested a hearing with the securities division, according to Martin Cordell, chief of enforcement.

Cordell said that hearing has not been scheduled, but noted 90 percent of the division’s cases are settled before a hearing.

How it works

Pigeon King International, which bills itself as the world’s second-largest pigeon breeder, invited investors and buyers to invest as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs.

Arlan Galbraith, in turn, contracted with the growers to buy back the offspring. He told them the pigeons would be sold to new investors, and on the marketplace for meat or as pets.

The order said at least one Washington resident had requested information on the pigeon business opportunity from Galbraith, and that he “failed to provide … disclosure documents, financial statements and a reasonable basis on which the revenue projections for the business opportunity were made.”

Not alone

Earlier in March, Iowa Attorney General Steve Moline wrapped up his investigation into the pigeon business offered by Galbraith.

Moline issued a statement saying his office “did not receive information that eliminated our concern this was a Ponzi scheme” and warned potential investors to look twice before getting involved with the company.

Nine people to watch in 2009: Vogel, Obama, Vilsack, Pacelle, Crossen, Smith, Galbraith, Clatterbuck, Pryor/Clark

January 8th, 2009 Farm and Dairy Staff

If you don’t recognize these people by now, you will by the end of the year. Here are Farm and Dairy’s picks for Nine People to Watch in 2009. Read the rest of this entry »

The most popular stories on www.farmanddairy.com in 2008:

January 1st, 2009 Farm and Dairy Staff

Here are the news stories you clicked again and again on our Web site in 2008, with starting with the “most clicked” at the top:

Thursday, June 24, 2008 (and updated June 26)
Pigeon King goes bankrupt

Tuesday, June 24, 2008
Columbiana County man is using wind to power his home

Thursday, July 3, 2008
Ohio passes revamped line fence law

Thursday, November 13, 2008
California bans gestation crates, hen cages; which state is next?

Wednesday, August 20, 2008
Elanco/Eli Lilly to buy Monsanto’s Posilac (rbST) brand

Thursday, May 1, 2008
Washington takes action against Pigeon King International

Thursday, December 5, 2002
Go Navy! Ohioan brings farm skills to U.S. Naval Academy

Thursday, October 23, 2008
N-P-K nightmares: Fertilizer prices force farms to cut back

Friday, August 29, 2008
John Deere expanding U.S. tractor works; investing in Brazil

Farm and Dairy’s 2008 top stories in review

December 31st, 2008 Farm and Dairy Staff

Weather woes

Weather is always a hot topic in the farmhouse. In March, an ice storm hit northeastern Ohio and western Pa., followed by 23 inches of snow in some places. Snow emergencies were declared in 60 Ohio counties and homes and farms were without electricity for days. And in September, remnants of Hurricane Ike stalled over Ohio, creating sustained winds of 54 mph and occasional gusts of 75 mph and almost postponing the opening of the Farm Science Review. Massive power outages and incident-related debris impacted all 88 counties, and Gov. Ted Strickland declared a state of emergency. An estimated 2 million residential and business customers were without electricity, some for more than seven days.

Record beef recall

In February, a California-based slaughter plant voluntarily recalled more than 143 million pounds of beef — the largest recall in U.S. history — after the USDA discovered animal handling violations at the facility that resulted in improper inspections. The violations were brought to light by a Humane Society of the United States investigation and video. HSUS also sued USDA to prevent downer cattle from being slaughtered. By the time of the recall, most of the recalled beef had already been eaten. The investigation also led to criminal animal cruelty charges against plant employees.

Pigeon King

Iowa, Washington, South Dakota and Maryland investigated Canadian Arlan Galbraith’s company, Pigeon King International, as a possible Ponzi scheme. Galbraith declared the business bankrupt in June, blaming ‘fear mongers’ for the collapse. Galbraith revealed debts of more than $23.5 million owed to nearly 450 angry breeders and vendors across the U.S. and Canada, many of whom were stuck with hundreds of birds, no feed and no sales outlet.

Farm bill

In late May, Congress voted to override President Bush’s veto of the new farm bill. (Although one section was inadvertently omitted in the official copy and both chambers had to re-vote, the president had to re-veto and then Congress had to re-override the bill. Whew!)

New USDA leaders

Two-term North Dakota Gov. Ed Schafer was named U.S. secretary of agriculture in February, replacing Mike Johanns, who resigned Sept. 20, 2007, to run for a U.S. Senate seat. And after the 2008 presidential election, President-elect Barack Obama nominated former Iowa governor Tom Vilsack as his ag secretary.

The economy

The economy was a top F&D story in 2008 (“Build or bust: Dairies, suppliers seeing strong growth” July 2008). But as summer slid into fall, the grain markets also slid into the Dumpster. Corn futures hit 7.99 1/4 June 27 and now stand at 3.76; soybeans reached 16.35 July 3, and spiraled down to 8.62 in December. At the same time, farm inputs escalated, as we reported in October: Anhydrous ammonia up 55% in six months; straight urea up 67%; potash up 55%.

Wind power

As wind power grew in popularity during 2008, the Ohio Power Siting Board adopted rules for wind farms. The rules address issues like aesthetics, setback, noise, ice throw, blade sheer and shadow flicker. Salem resident Greg Courtney was one of the first in the area to install a wind turbine at his home.

Dairy labeling/rbST

Ohio and Pennsylvania adopted similar rules for dairy product labeling. New laws in both states allow dairy labels to say: From cows not supplemented with rbST. Claims such as “hormone-free” or “rbST-free” were banned. Many dairy farmers who were using rbST had to give it up when processors stopped accepting milk produced with the synthetic hormone. In August, Monsanto sold its rights to the rbST brand Posilac to Elanco.

Line fence law

In June, Ohio Gov. Ted Strickland signed into law updates to Ohio’s line fence regulations. The new law changed who was responsible for fence construction and upkeep, and to what extent; asked county recorders to get involved in keeping records; and gave township trustees enforcement power during disputes. The law went into effect in late July.

DFA dilemma

Dairy Farmers of America discovered a former senior executive and a dairy producer received unauthorized payments from the co-op. In separate instances, investigators discovered a $1 million payment and a $185,500 payment that were never approved by the board. The U.S. Commodity Futures Trading Commission later ordered Dairy Farmers of America and former staffers to pay a penalty of $12 million for attempting to manipulate the Class III milk futures contract and exceeding speculative position limits in that contract.

COOL

Mandatory country-of-origin labeling went into effect Sept. 30, declaring retail commodities must carry a label to indicate a country of origin. Many meat packers, however, are taking an end-run around the controversial edict, saying their products will carry a “Product of the U.S., Canada and Mexico” label instead.

Beef merger blocked

The U.S. Department of Justice, along with 13 states’ attorneys general, filed an anti-trust lawsuit in October to block beef feeding and packing consolidation they said would harm the industry. The case sought to block the proposed acquisition of National Beef Packing Company LLC, by Brazil-based JBS S.A. Currently, JBS is the third-largest beef packer in the U.S., and National is the nation’s fourth-largest. JBS is also the top beef packer in the world. If not blocked, the purchase would boost JBS into the status of largest U.S. beef packer and leave just three significant competitors — JBS, Tyson and Cargill — with 80 percent of the U.S. beef market.

Prop 2

In November, California voters overwhelmingly approved a ballot initiative that bans gestation crates, laying hen cages and veal crates. Producers were given until Jan. 1, 2015, to change their housing systems. The ballot initiative was backed mainly by the Humane Society of the United States, which previously helped pass similar ballot initiatives in Arizona and Florida. Farm groups nationwide were concerned with the measure and its eventual impacts on agricultural production across the country.

What was hot online?

And here are the most popular links in 2008 from Farm and Dairy’s Web site.

Pigeons point to Ponzi scheme

March 13th, 2008 Andrea Zippay

SALEM, Ohio — The Iowa Attorney General‘s office has wrapped up its most recent investigation of Pigeon King International, the Canadian-based pigeon breeding company, and warns potential breeders to look twice before signing with the company.

Demands

Late last year, Iowa Attorney General Tom Miller demanded PKI owner Arlan Galbraith provide various details about his operation and plans for the future amid concerns the entire operation was a fraud.

In examining documents Galbraith provided, “we did not receive information that eliminated our concern this was a Ponzi scheme,” said Iowa attorney Steve Moline.

A Ponzi scheme is defined as an investment fraud in which early investors are paid with money obtained from later ones in order to create the illusion of profitability.

Moline also said that in Canadian media interviews, Galbraith admitted he had not sold any pigeons to anyone other than new investors since 2005.

How it works

Pigeon King International, which bills itself as the world’s second-largest pigeon breeder, invited investors and buyers to invest as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs.

Galbraith, in turn, contracted with the growers to buy back the offspring. He told them the pigeons would be sold to new investors, and on the marketplace for meat or as pets.

Monitored

Moline said Galbraith has agreed not to solicit new growers in Iowa, and to fulfill payment for all current contracts. He said he was not aware of any other states investigating the matter.

A spokesperson for Ohio’s attorney general said there have been no complaints about the company reported here.

Related articles

Pigeon idea may not fly: Iowa investigating company for scheme (2/21/2008)
You’re raising what? Pigeons! (9/13/2007)

Pigeon idea may not fly: Iowa investigating company for scheme

February 21st, 2008 Andrea Zippay

SALEM, Ohio — The Iowa attorney general’s office is investigating Canadian-based Pigeon King International as a possible fraudulent scheme.

Background

Pigeon King International Inc., which bills itself as the world’s second-largest pigeon breeder, is based in Waterloo, Ontario.

The company, owned and operated by Arlan Galbraith, invites investors and buyers to invest as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs.

Growers enter contracts with Galbraith that promise a guaranteed selling price — and market — for the pigeons from Day 1.

Iowa no-no

“We believe that potential investors or buyers should be very cautious and examine the situation very carefully, especially the question of whether there is a realistic and independent market for pigeons now and in the future,” Iowa Attorney General Tom Miller said in a December statement.

Miller has issued a formal demand to Galbraith to provide various details about his operation and plans for the future, saying he may be “misleading consumers regarding the true viability of establishing several large pigeon processing plants within a time frame that would allow the business opportunity … to have a legitimate independent business purpose other than providing inventory for new growers in furtherance of a ‘Ponzi’ type of investment scheme.”

Phone calls to see whether any complaints were filed with the Ohio attorney general were not returned.

Fear mongers

Galbraith, who was repeatedly not available for comment, did speak his mind in the September issue of The Pigeon Post, his company newsletter, posted on his Web site:

“The people who find fault with the pigeon industry are always those who are not dealing with us. … If they would spend their time minding their own affairs and keeping their noses out of other peoples’ business, they would be much better off and the world in general will be a much better place.”

Not so sure

The accusations of pigeon raising being a scheme don’t fly with Monroe County, Ohio, breeder David Rinkes, whose hatchery business was featured in Farm and Dairy in September 2007.

At that time, Galbraith declined to give out hard numbers that revealed his annual sales or production, or hard figures to show the company’s growth and demand.

Rinkes, who also serves as a business development manager for Pigeon King, said in September the birds he sells are sent to other start-up breeders, or are sold as pets or for meat.

“I heard rumors about it [being a scheme], but I don’t believe it. He’s been real good to us,” Rinkes said of Galbraith, who bought 100 pairs from him in late December.

Rinkes said he did receive notice last spring that purchase prices would drop — Galbraith pays Rinkes $25 for each young bird, but newer breeders’ contracts only allow to be paid up to $18 per bird — but there have been no surprises otherwise.
“I ain’t never had a problem in two years with him,” Rinkes said.

The Iowa attorney general continues investigating the matter.

Related Story:
You’re raising what? Pigeons!.

You’re raising what? Pigeons!

September 13th, 2007 Andrea Zippay

WOODSFIELD, Ohio – A 32-by-40 pole building stands just off the edge of the gravel road, its new red metal siding gleaming in the bright September sunshine.
Other than a small white sign posted on one end of the barn, there’s no indication that this is anything more than a car garage, or that this place is involved in a business so cutting-edge, so alternative, so explosive, and so profitable.
David and Marlene Rinkes’ D&M Hatchery has been in business only a year, but already the couple is turning profits from breeding and raising pigeons on contract for the Canadian-based Pigeon King International.
Multimillion operation. Pigeon King founder Arlan Galbraith runs a multimillion dollar business from his Ontario headquarters, but declines to give out hard numbers that reveal his annual sales or production, or just how far-reaching this business is becoming.
However, the Rinkeses are proud of their 100 pairs of breeders and their offspring they sell, and offered up their numbers freely.
David Rinkes said in the year since he and Marlene started their hatchery, they’ve grown to average selling 100 young pigeons every month straight to Galbraith. Those 20-week-old birds are crated and hauled from the Woodsfield-area farm at $25 a pop, clearing $18,000 to $20,000 a year profit for the couple.
Marlene has made the birds her full-time business, and David still drives truck to supplement their income. But looking down the road, both see themselves expanding their numbers and spending all their time at home.
Jumped right in. David spied an ad for Pigeon King International in Farm and Dairy more than a year ago, and was surprised at the opportunity advertised: guaranteed sales, fast and high return on investment, easy work. It sounded like a perfect job for Marlene, and the perfect income boost for both of them, he thought.
So the couple called Ontario for information, then found themselves visiting two other pigeon breeders in Ohio’s Amish country to see their setups and hear their stories.
July 3, 2006, they moved 100 pairs of breeders into their newly built pole building and set out on a 10-year adventure.
Still small. The Rinkeses say their roost of pigeons is small when put up against other breeders who have several hundred pairs. But this size and its requirements is perfect for them, and likely for many others looking to get involved in the business.
It was a size they could afford, since they had to buy the birds, put up the building, dump gravel for the flooring, build laying boxes, and buy feeders and waterers. David said their initial investment was about $30,000 total, paid for with a home improvement loan.
So far, it’s paying off and bringing big smiles to Marlene’s face.
“It’s easy work, really, really easy, especially for the money,” Marlene said.
“We can make up to $2,500 a month without leaving home! Tell me how that’s bad,” David challenged.
No stress. Marlene said she spends about two hours per day with the birds, one hour each in the morning and evening for feeding and watering, putting on leg bands, and just spending time in the barn.
“There’s really no stress in this,” she admitted.
She checks nesting boxes for new eggs, for young birds just hatched, and watches the young birds fill in their naked bodies with feathers ranging from white to black to iridescent green and purple. She watches as they stray from the box a month later, jumping to the floor and learning to fly.
“It’s easy, a real good job for a woman. You just can’t be prissy about the poop,” she admits.
Both Rinkeses see raising pigeons as a lucrative business for many people, including retired folks or very young people, and possibly even the disabled who have trouble finding other income.
“They’re enjoyable and fun. It’s peaceful to just sit and watch them fly around,” Marlene said.
Options. Though the Rinkeses chose to put up a new pole building and secure the inside with plastic netting to protect the birds, they say there are other options for pigeon housing.
David suggests looking at old house trailers, hoop-shaped tarp buildings or school buses as inexpensive opportunities for pigeon houses.
Galbraith agrees. His how-to guide says pigeons will adapt to existing barns or sheds, truck boxes, old mobile homes, or grain bins with simple modifications.
The pigeons are extremely hardy, too. They tolerate extreme heat and cold well as long as the barn is ventilated and there are no drafts directly on the birds.
All it takes is a watchful eye, protection from predators and disease, plenty of water and some pelleted game bird feed.
“This is really something almost anybody can do,” David said.
Why pigeons? Galbraith has more than 50 years experience with pigeons, and his current genetic strain, Strathclyde, are flying-type sporting pigeons used to breed high performance flyers. The pigeons aren’t used for shooting, dog training, or shows.
David Rinkes said as strange as it sounds, some wealthy people buy pigeons as pets. He’s been told boxing legend Mike Tyson paid $50,000 for one pigeon to keep strictly for pleasure.
And the Rinkeses acknowledge after their breeders have lived their 10-year productive life, they’re sent for slaughter to be served in high-end restaurants as $100-per-plate squab or for pigeon pie or soup.
They don’t necessarily like the idea, but accept it as the end source for their birds.
In the meantime, while they’re fulfilling their 10-year contract with Galbraith, they let their birds fly free inside the pole building and give them the attention they need.
In return, the Rinkeses are collecting a monthly paycheck they’re pumping back into the business, and keep their eye on the opportunity over the next 10 years.
“You spend it to keep them alive and make more. It’s a real good opportunity.”
(Reporter Andrea Zippay welcomes feedback by phone at 800-837-3419 or by e-mail at azippay@farmanddairy.com.)