Nine times out of ten, most people know they’re committing fraud when they’re running a con or a scam. But then there’s that one – that one who, seemingly, just doesn’t know what they’re doing.
Arlan Galbraith could very well be that one in ten. Or, he could be a very, very good actor.
Arlan Galbraith was a failed Ontario, Canada farmer how turned to livestock breeding in order to make ends meet. His specialization? Pigeons.
Galbraith had been raising pigeons since he was six years old. He specifically bred and raised high-calibre racing pigeons.
In the 1950s, a neighbouring farm owner introduced Galbraith to the hobby in Souffville, Ontario. Galbraith was hooked. At that young age, he decided that this was his life’s passion – running a farm, and raising pigeons.
Galbraith dropped out of school in the 11th grade, and bought a farm with the help of his family. The farm was known for raising and slaughtering pigs and cattle. However, it was hit by hard times in the 1980s, and Galbraith was forced to declare bankruptcy.
Galbraith wasn’t down for the count for long. He was in his 30s, and had a young family to support. He went from farm to farm doing odd jobs, and bred ‘high-end rabbits and exotic birds for show’ on the side. But nothing could replace his love of pigeons and pigeon breeding.
“I have a plan to save the family farm”, Galbraith exclaimed in 2001. The farming communities across North America were in trouble. And Galbraith had the answer. His beloved pigeons.
Galbraith took out ads in small farming magazines. Under the company name Pigeon King International (PKI), Galbraith told farmers that he could save their farms, and put smiles back on their faces.
Referring to himself as The Pigeon King, Galbraith advertised that he would sell pairs of breeding pigeons ‘with a guarantee to buy back their offspring at fixed prices for 10 years’.
Farmers would buy a breeding pair for $500, and Galbraith would buy back ‘all of the offspring for ten years at $50 each’. (All currency that is referred to is in Canadian currency.) He informed buyers that they were breeding high-end racing pigeons for a profit.
Farmers were ecstatic. They had a sure-fire way to save their farms! Galbraith claimed that rich overseas pigeon-fanciers would buy the offspring for racing purposes. Through a newsletter, named Pigeon Post, Galbraith claimed that the pigeons were from a genetic line he’d developed called Strathclyde Genetics. The newsletter posted prices, testimonials, and various information on all things pigeon-racing.
However, the racing storyline didn’t last long.
At some point, Galbraith changed his selling strategy. The birds weren’t being bred for racing. They were being sold, bred, and bought for their meat. Galbraith was now telling buyers that they were part of a trailblazing plan to make squab – pigeon meat – a much sought after delicacy for foodies everywhere.
The racing wasn’t succeeding, and Galbraith supposedly had birds everywhere that he needed to sell and move. Except there was one glaring problem – he wasn’t selling the birds to racers or for slaughter.
Galbraith was re-selling the birds he bought back from farmers to new buyers. Which meant that Galbraith constantly needed new buyers in order to move the same birds around time and again, and their offspring. Shortly after maxing out on his contacts in Ontario, Galbraith pushed PKI into the American Midwest. He was quite keen on gaining buyers from the Amish and Mennonite communities.
At the height – and downfall – of PKI, Galbraith had ‘almost a thousand breeders under contract in five Canadian provinces and 20 U.S. states’.
Almost none of the breeders under contract thought anything was wrong. In fact, many of them made six-figure returns during the seven years that PKI was in business.
In 2007, The Pigeon King was quite roughly dethroned. Arlan Galbraith was accused by two men of running a Ponzi scheme.
David J. Thornton, founder of a website called CrimeBustersNow, was tipped off about PKI, and decided to look into it. At 73 years old, he made it his life’s mission to take down pyramids and Ponzi schemes. However, he was difficult to take seriously. He was often found getting arrested for harassment, disturbing the peace, and assault. But this didn’t stop him.
David Thornton began calling bankers and feed companies warning them that PKI was not a legitimate business deal. In order to reach the Amish and Mennonite communities, he called blacksmiths and asked them to warn the communities Galbraith hadn’t yet reached out to.
At the height of Thornton’s vigilante-like take-down of PKI, he stood outside the PKI offices in Ontario with a bullhorn, yelling about the Pigeon King conning people.
Despite Thornton’s crazed attacks, they seemed to work. By autumn of 2007, bankers were referring farmers seeking loans for PKI pigeons to the CrimeBustersNow site. However, some of the warnings lost their bluster when the site also prompted for fundraising.
In December of 2007, a critical exposé of PKI was published in Better Farming magazine. The magazine had a small staff, and was known in the eastern Ontario farming community. Having heard many rumours – both good and bad – about PKI, the magazine decided to investigate. It resulted in a 16-page “special investigation” that tore PKI and Galbraith an absolute new one.
The article undermined all the facts, figures, and promises Galbraith had sold to his buyers and investors with their own quotes and data from pigeon fanciers and squab processors.
When salesmen came calling to communities and farms, either to pitch, or to buy and re-sell birds to contracted breeders, the landowners were demanding answers to the accusations in the Better Farming article. The salesmen didn’t know what to do.
David Wagler, an influential figure in the Amish community, also warned farmers about PKI and Galbraith selling lies.
Between Wagler, Thornton, and Better Farming, Galbraith and PKI were grasping at straws in order to stay afloat.
Interestingly, Galbraith, at any given moment, had roughly 40,000 birds in 14 holding barns at any given time. Somehow, he truly believed that he was helping all of his contracted breeders keep their land and their farms. He refused to release or kill the birds, continuously moving them from breeder to breeder.
It reeked of a classic Ponzi scheme – except, instead of paying off old investors with money from new investors, he was moving birds around. Either Galbraith wasn’t aware that this was a scam, or he knew, and was just really, really bloody bad at it.
Alternatively, Galbraith was either extremely calculating in trying to fleece farmers through the use of his beloved pigeons, or he was just hapless, and not very good at business.
PKI declared bankruptcy. Galbraith also declared personal bankruptcy. He was exposed. And his breeders were left holding the bill. The birds they’d so carefully kept and bred were good for nothing – they couldn’t be taken seriously as racing birds, and they were cross-bred too many times, and way too small to be sold for squab.
During the course of the investigation into Galbraith and PKI, a forensic accountant found that nearly $42 million had been invested by farmers, and Galbraith was unable to buy back $356 million worth of baby birds. Farms, families, marriages, and lives were ruined. According to The New York Times Magazine, “singing up enough new pigeon breeders to pay off those contracts would have dug him into an even deeper $1.5 billion hole”. Galbraith had no chance at being able to do so.
With PKI’s downfall, Galbraith hid out at a ranch he’d purchased years earlier. He hid in the basement, keeping the house dark, with the lights off and the curtains drawn. He withdrew, and hoped the whole mess would go away.
There was no chance of that happening.
In December of 2010, Arlan Galbraith was charged with fraud. Crown prosecutor Lynn Robinson was hoping for a quick and speedy trial. But Galbraith slowed proceedings down at every turn. For three years, he would fire his lawyer, and file odd motions to try to postpone the trial. But that couldn’t last forever.
In November of 2013, Arlan Galbraith’s fraud trial began at the Ontario Superior Court in Kitchener.
Galbraith represented himself in court. He claimed that he wasn’t a criminal at all, and that his downfall was the result of a personal attack by a “fear-monger’s smear campaign”. He claimed that he’d started a business, and it had failed. He also, truthfully, claimed that he paid for all the business expenses in full, and many of his initial investors and buyers had seen major profits. Would a criminal do that, he asked the court.
He’d still be in business, paying off his investors, he claimed, had Thornton and Wagler not personally attacked him, and besmirched his good name.
The prosecution saw things quite differently. Galbraith had lied and misled so many of his investors. And he knew what to say, and how to say it, in order to get them to agree to buy into his pigeon scam.
The prosecution even argued that Galbraith had specifically targeted the Amish and Mennonite communities due to their overly trusting nature – which is a huge part of their community life – and their unwillingness to participate in the legal process. His newsletters and pamphlets often emphasized parts of scripture in order to endear him to them.
Galbraith did not make an opening statement in his defence, he did not take the stand, and he only called one witness. However, through rebuttals to the prosecution’s witnesses, he kept asserting that the pigeons were legitimately being bred for squab. His line of questioning often didn’t make sense, and the judge often got testy with him. When his efforts to show a visual aid kept being blocked because the witnesses had never seen it before, Galbraith simply gave up.
The jury was out for two days. When they returned, the found Arlan Galbraith guilty of fraud.
In March 2014, Galbraith returned to the courtroom for his sentencing. By this point, he’d finally hired a lawyer – not that it would do him much good. The lawyer tried to convince the judge to give Galbraith a lenient sentence.
Arlan Galbraith was a senior citizen (was 67 years old), had no criminal history, and had honestly and unknowingly participated in a scam. His lawyer claimed that Galbraith was a ‘diminished man’.
The judge was not sympathetic to Galbraith’s lawyers claims. While he did agree that Galbraith seemed to ‘lack insight into his serious criminal conduct’, this could not be used as an excuse. Lives, marriages, and farms were destroyed and devasted by Galbraith’s actions.
The judge sentenced him seven years and three and a half months.
Arlan Galbraith, The Pigeon King, is in prison in Northern Ontario, and has dropped his appeal.
The tragic tale has made its rounds as a play, called The Pigeon King, around southern Ontario playhouses.
Whether Arlan Galbraith was a diabolical con artist behind a flighty Ponzi scheme, or a hapless businessman who didn’t know what he was doing, is still up for debate.
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Sources:
The Pigeon King and the Ponzi Scheme that Shook Canada – Jon Mooallem – The New York Times Magazine
The Pigeon King Swindle – Rupert Taylor – Owlcation
Arlan Galbraith: the Pigeon King;s Ponzi Scheme Unravels – Moneyweek
Collapse of Pigeon King not just a ‘mistake’, jurors told – Brian Caldwell – Guelph Mercury Tribune
Galbraith gets seven-year prison term for Pigeon King scheme – Brian Caldwell – Guelph Mercury Tribune