Conspiracy killed Pigeon King?

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Wagler, who has been helping former contract holders with plans to either pursue a venture to market the former PKI birds as squab or exit the business, asserts the business was targeted by people who did not want it to succeed.

“There’s far more behind this than meets the eye,” he said Wednesday from his home near Embro. “I am convinced that you guys (Better Farming) were used by whoever is behind funding David Thornton to bring the company down.”

David Thornton is president of Crime Busters Now, a non-profit organization that uses smear tactics to target those believed to be committing fraud. Thornton and his organization allege that because PKI appears to have had no market besides new investors it is a Ponzi, a form of fraud similar to a pyramid scheme where new investments are used to pay the return on older investments. Thornton claims police and most media organizations are conspiring to protect fraudulent activity.

Last week, Arlan Galbraith, the owner of the Waterloo-based PKI, notified his contract growers, suppliers and holding barn operators that he had handed his business over to a bankruptcy trustee. By Wednesday the company’s offices in Waterloo and Moorefield were closed.

Wagler, who worked out of the Moorefield office in latter months, observed that the company’s business appeared to drop markedly after Better Farming published an article about it in December. The article examined the business’ method of operation.

“It ended up in every bank, every lending institution and every credit union across the entire country and down into the States,” he says.

Nevertheless, Wagler says he was completely unaware of Galbraith’s decision to permanently close the company’s doors until the evening of Monday June 16.

He received an email that had been issued to suppliers, staff and some contract holders while in a hotel room in Toronto. He’d been on his way to a farm show in Western Canada where he planned to represent the company then do sales calls.

“You can understand we’re all getting over a state of shock,” he says, noting that he’s on the hook for an $1,100 telephone bill and did not receive payment for his last shipment of birds.

Although he has known Galbraith for more than two years and told reporters on Saturday that he considers him a close friend, Wagler says he has not heard from his former boss since PKI’s closure. Wagler claims to know where Galbraith is located – “most know” - and how to reach him but he’s waiting for Galbraith to take the first step.

“I have some hurts there.”

Better Farming’s calls to Galbraith’s residence in Cochrane, where he was spotted last week, have not been returned.

In the meantime, Wagler says he’s working with the Waterloo Regional Police Service’s fraud squad on the issue and that a police investigation is “ongoing.”

Last Saturday about 250 growers met in Stratford from across the province to establish plans for short-term support and discuss the possibility of building a business venture using the former PKI pigeons. After the meeting, Wagler showed reporters a cooler filled with trays of two squab each sitting on a tray of rice and suggested plans were afoot to sell the birds into the meat market.

Wagler says he’s reluctant to offer details of the new venture because some people want to destroy it. He wouldn’t say who. “You (media) can be a source of information to them that we don’t want to be part of at this stage.”

He says the venture is in the “formative” stages. “The markets are there and we’re working on it.”

Wagler estimates there are about 300 former contract holders in the province and suggests getting involved in the venture won’t be for everyone. The sudden collapse of the business has left a number of former contract holders facing some tough financial circumstances, he explains.

Nor would effort be made to extend the venture south of the border, he says, noting that there are the hurdles of border regulations and the possibility of differences in laws between the two countries.

He notes that although the birds have come under criticism for being too small for squab, at least one unnamed processor views the birds as a potential opportunity and is “begging” the group of former contract holders not to put them down. People from different ethnic groups “want what we’ve got.”

Wagler says he doesn’t know if any money could be recovered from PKI to launch the new venture.

“That would only be determined by a bankruptcy trustee.” As of Tuesday, no trustee representing the business had emerged and no action on filing a bankruptcy had been taken, he notes. “That’s a surprise to all of us.”

If Galbraith doesn’t file for bankruptcy then the only option former contract holders would have would be to “force it,” he says. “And if we force it, who pays the costs if there’s no money there?”

Staff Sergeant Wally Hogg says the Waterloo Regional Police Service’s fraud squad is reviewing six complaints, the largest of which involves an investment of about $50,000.

It could be at least two weeks before a decision is made on whether a criminal investigation will be launched, Hogg says. He notes that the fraud squad is holding off contacting the crown attorney in case more people want to contact police, “knowing that there’s a lot of investors out there.”

Hogg says he’s not aware if Galbraith has actually declared bankruptcy but notes it can take some time for a trustee to decide whether to take on a case.

Wagler has been in touch with the fraud squad, Hogg confirms; the former sales consultant has not registered an official complaint.

Of Wagler’s assertion there was a conspiracy to drive PKI out of business Hogg says: “That’s the first I’ve heard of it.”

In his e-mail announcing the failure of his business, Galbraith repeatedly blamed “fear mongers.” In a June 4 interview with Better Farming, Galbraith questioned whether the magazine had been involved in “fear mongering.”

During the same interview, Galbraith was asked whether risk to his investors had changed  following the action taken by four U.S. states. “It doesn’t affect it at all,” he said. “It doesn’t affect me either.”

Iowa, one of those states that took action against PKI, suggested it was a Ponzi scheme.

Toronto-based lawyer Stephen Sofer, who specializes in fraud, says that a Ponzi scheme is considered a type of fraud in Canada “because the perpetrator never discloses all the facts, namely that there is no genuine business plan, that he or she is paying returns to the investor only from the monies paid by new investors and that no returns will likely be received as soon as no new investors can be found.”

Sofer says section 380 of the Criminal Code of Canada covers Ponzis.

Galbraith published his final newsletter, June 9, a week before pulling the plug on his business. An article in The Pigeon Post entitled: "Traditional farmers envy pigeon farmers," proclaims: "While over 1,000 North American pigeon farmers are enjoying consistently profitable market prices for their production, thousands of other non-pigeon farmers suffer financial uncertainty." The article singles out pork, beef and cash crop farming as being particularly unattractive and concludes that pigeons are the way to go: "When you have a project on your farm that the whole family can work at and it is fun as well as profitable that is as good as life gets. You should not look for life to get any better than that."  BF

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Ontario Ministry of Agriculture, Food and Rural Affairs pigeon information page

PKI summary