Pigeon King scam, 7-year prison term for Galbraith.
KITCHENER – The folksy force behind a huge pigeon-breeding scam targeting conservative religious communities was sentenced Tuesday to seven years in prison.
Arlan Galbraith, 67, was convicted of fraud for luring hundreds of Canadian and U.S. farmers – mostly Mennonites, Amish and Hutterites – to raise birds at lucrative buy-back prices.
Investors lost an estimated $20 million when Pigeon King International, based in offices in a Waterloo commercial plaza, collapsed under its own weight in the summer of 2008.
Galbraith, who got his hands dirty and often did media interviews in overalls, insisted the eight-year-old business was a legitimate venture that was sabotaged by critics jealous of his success.
But after a month-long trial in Superior Court in Kitchener at which he entertained onlookers while representing himself, jurors concluded otherwise in December.
They accepted the prosecution’s contention the business was an unsustainable pyramid scheme that required more and more new investors to pay existing ones.
Crown attorney Lynn Robinson, who argued for up to 12 years in prison, called a former salesperson for the company to explain why Galbraith targeted traditional communities for sales.
Bill Top, who later resigned and actively warned people about the pigeon scam, said he once heard Galbraith and his former wife ridiculing those groups for their simple lifestyles.
“The strongest comment he made … was they were aliens and he didn’t know why they would live that way in this day and age,” Top told the hearing. “He thought it was a joke.
“It was business. It was money in his pocket. I don’t know if there was a
While promoting the scheme, Galbraith portrayed himself as the saviour of the family farm for giving farmers an opportunity to make money breeding pigeons.
Under the terms of five or 10-year contracts, he agreed to buy all the offspring back at rates virtually guaranteeing lucrative profits.
Early investors were told he intended to sell pigeons to hobbyists interested in them for sport.
But by the end of the scheme, Galbraith’s pitch had morphed into establishing a vast network of breeders to process baby pigeons for meat and rival the chicken industry.
Although he had plans drawn up for a plant in a remote area of northern Ontario, it was still years away from being built.
In the meantime, Galbraith’s obligations under the buy-back deals had mushroomed to more than $350 million.
Had investors been found to cover that amount, jurors were told, the commitment over the next decade would have been more than $3 billion.
Despite bringing in $42 million in the last four years, Galbraith also went personally bankrupt after the collapse of the company. As a result, there was no hope of restitution for victims.
“There is no money at the end of the rainbow to give back to these folks,” Robinson said.
After ignoring pointed advice from judges and representing himself at the complicated trial, Galbraith finally hired a lawyer for the sentencing.
David North stressed Galbraith didn’t live a lavish lifestyle or sock away money, redistributing it instead to other investors. Farmers who got in on the deal early actually made money.
Arguing for a sentence of less than six years, he also said Galbraith has lost up to 40 pounds since going into custody following his conviction.
“It would be a crushing sentence for someone who is quickly becoming an old man,” North said of the prosecution’s call for nine to 12 years. “And to what end, to what end?”
Looking gaunt and worn in a dark suit hanging off his frame, Galbraith was uncharacteristically silent when given that opportunity to address Justice Gerry Taylor before the prison term was imposed.
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