© AgMedia Inc.
by BETTER FARMING STAFF
Waterloo Regional Police Service’s fraud squad has escalated its review of a former pigeon breeding scheme into a criminal investigation.
Staff Sgt. Wally Hogg, a spokesperson with the fraud squad, says police spent the last several months reviewing information and following up on calls about the former Pigeon King International to determine whether the case was a civil or criminal matter.
“We realize there are civil litigations going on,” Hogg says, adding police had to establish criminality before launching a criminal investigation. They are now gathering evidence to lay a charge, a process that could take at least two months, he says.
PKI, owned and operated by Arlan Galbraith, was a Waterloo-based scheme that involved selling pigeon breeding pairs for as much as $500 and buying back offspring for up to $50 each. The business collapsed last June leaving nearly 1,000 breeders in Canada and the United States saddled with a pile of worthless pigeons.
The fraud squad, in partnership with the Royal Canadian Mounted Police, has been looking into the case since June 2008. In January, each police force assigned two officers full-time.
Police have occasionally referred to the review as an investigation, but Hogg calls these “semantics” and emphasizes the criminal investigation was only launched this month and previously “it’s been a review of the complaints that we have received.”
Hogg says the case is “unique to us.”
The length of time taken with the review had to do with the volume of complaints. “Each file had to be looked at, reviewed, confirm the information; lots of things actually,” he says. BF
PKI summary
Comments
CrimeBustersNow
While investigating another pyramid fraud in the summer of 2007 a farmer brought this scheme of Galbraith's to my attention explaining how the money flowed. It took literally 5 minutes to figure it out. So, does any of this make sense. Anyone following the Madoff Ponzi scheme will know that the private investigator who uncovered that fraud figured it out in 20 minutes once he established the "money flow" and lack of any real investment, and that scheme was far more involved than PKI.
All that necessary was to verify what this farmer was relating was indeed factual. He directed me to a farmer raising PKI pigeons. The farmer showed me the "paper" on it, and the letter offering 18% for doing nothing when Galbraith was touting he had multi-millions of dollars and a "debt free" business, which if true, he would have had no problem obtaining money from any lending institution for a few points over prime. Big red Flag!!!
I then called Galbraith. He confirmed everything stating he was "building a breeding flock". When I enquired if he was taking the money from the last "investors and using it to pay the contracts of the earlier investor he admitted there was nowhere else for these 10's of millions to come from. "Simple deduction, Watson".
In November 2006, I was sued for $10,000,000 in the Ontario Superior by two companies operating pyramid frauds out of Mississauga while police and government authorities simply sat back watching the vicious spectacle doing nothing, and have done nothing to this day. In the precedent setting decision directly linking the product masked pyramid scheme to a "naked scheme" (one without product) easily recognized by, and accepted by police authorities, the judge ruled my investigation and research was correct in ever detail even stating at Paragraph [35] "In the absence of evidence that even begins to rebut the assertions made by Thornton...." then going on to rule in his decision that both the "operations" were prima facie Criminal Code and Federal Competition Act violations. One of these scams we were successful in shutting down by contacting Interpol, Scotland Yard, the local police and England's High Court when they tried their nonsense in the U.K.
The Fraud Squad here, blindly, conveniently, doggedly and contrary to law, cling to their flawed concept that product masked schemes are "legal". They did with PKI, notwithstanding not only my having informed them of, and presenting to them the Ontario Superior Court decision and pointing them in the direction of several professions on the subject ....i.e. math and business professors, forensic accountants, the organization Pyramid Scheme Alert, and Lawyer, Michael Webster LLB PhD former professor and now specializing in corporate corruption who I retained to give a legal opinion specifically on PKI which he posted publicly to his website in a 5 part series. Anyone following this story will remember that the concept touted that PKI was legal, notwithstanding all that information provided to the Fraud Squad, was "pushed" on the farmers and the public world-wide on both CTV & CBC TV. "We can't see anything illegal" stated the fraud detective on CTV. The CBC anchor simply and gratuitously stated "It is clearly legal in Canada."
You are invited to read the Ontario Superior Court decision referred to at www.crimebustersnow.com.
Getting no where with the fraud Squad, a citizen interested in that court decision had contacted me. I informed him about the PKI operation and how I could easily prove this decision also applied to PKI. He suggested posting on "Craig's List" where Better Farming found the story and contacted me. I then directed Robert at B.F. to Galbraith's former employee Bill Top.
Bill Top had contacted me after his wife had been informed by a friend of the email to Arlan I posted to the internet after Arlan refused to acknowledge my opinion that this was a classic Ponzi scheme and to immediately stop writing contracts that would, again in my opinion, see hundreds, even thousands more farmers losing 10's and hundreds of millions of dollars. Bill Top had been filling me in on his difficulties with the government about two years previous when he had described PKI's system pointing out it was unsustainable. That is quite a story of government indifference.
Considering Bernie Madoff's Ponzi fraud exposed in December 2008 with Bernie already in jail awaiting sentencing, and myriad Ponzi schemes collapsing almost daily and these guy being held in jail almost immediately should be the impetus for farm families to be demanding answers. Less than six months to investigate and close down, through the courts, a Canadian fraud attempted in the U.K. and only weeks and sometimes only days to arrest Ponzi fraud artists in the U.S.: Answers should be demanded.
When I began investigating pyramid/Ponzi schemes authorities tried to deny, with the exception of a few, that they even exist. Now consider an excerpt in an email I received today from a concerned B.C. church minister we are trying to assist in getting two of these schemes out of the church. I sent him a copy of an email I sent to the A.G. of British Columbia: His reply??? ...... "I sent the letter to our M.P. Mr. Ron Cannon who did get back to us via phone. He stated to my wife that there are so many of these things going on, and always have but gave no indication that anything was going to be done." Attitude most times is everything, certainly in law enforcement and politics.
dave - CBNow
I for one would like to get some of my money back that this pigeon scheme cost me and my family! I don't care who gives it to me or where it comes from but I want it back. If the government were held liable maybe they would be more pro active BEFORE innocent hard working people get hurt. If it seems like I am mad and fed up, I AM!
Canada is earning a reputation around the world as being a safe haven for schemes like this. I regret saying this, but the Americans are far superior to us Canadians when it comes to dealing with this kind of thing.
I do understand your frustration but this is not 100% accurate.
Numerous agricultural based scams occurred in this U.S. (jerusalem artichoke, emu, earthworm) with little done to the organizers and the farmers lost everything. In each case, the victims received nothing in compensation for their losses.
The Americans are superior in prosecuting INVESTMENT scams that hurt the rich but not agricultural based scams.
Publicity always helps. There seems to be a healthy appetite right now, for schemes of this sort to be made public for what they are. More media attention about pki would be a good thing by BF and others. Find out what the mandate of various arms of the government are, such as Consumer and Corporate Affairs, Attorney General etc. They work for the government the same as the police do. How can several branches of government allow an operation to carry on business for 6 or 7 years, in plain sight of everyone, and then after its demise, call in another branch of government to carry on a criminal investigation?
If I build a shed on my property bigger than 9 feet by 10 feet, without a permit, I will have all kinds of things to answer for. But this pki thing did way more damage than any shed I could ever build, and yet those responsible, and those that put themselves in positions of responsibility, have done nothing.
I myself was a pigeon breeder with PKI. For you to want to make the government solely liable for YOUR lost investment in PKI is outrageous. Did you not perform your own due diligence before investing your hard earned money? I sure did. Yes, I’m upset....but I certainly cannot only blame the government for my bad choices.
You want your money back... doesn’t everyone? You don’t care who or where it comes from? That makes no sense... you certainly cannot expect the Canadian taxpayers to reimburse you for your investment choices.
There is a huge difference in attitude towards PKI and Arlan Gailbraith from former PKI breeders. Those breeders who received their initial investments back and perhaps even made money do not seem so upset as those who invested money and received NOTHING back. The whole premise of a PONZI scheme is the fact that new investors cover the investment and pay outs of earlier investors. Judging from the comments of the previous "pigeon" it is obvious that he didn't lose 100% of his money. I do not think that it is constructive for PKI breeders to act negative or with indifference towards one another. How does anyone perform due diligence in such a grand scheme as this?
One part of due diligence is ascertaining whether or not the investment is legal. For a person living in Canada, particularly Ontario, he would of said yes it was. But for a person living in Iowa or one of the other states that banned this business/scheme, the answer is it was illegal. A big difference. For a business to be allowed to operate for over 6 years, with out even a hint of suspicion being mentioned, by departments or ministries that are set up solely for the protection of its citizens....this is not acceptable. IF all the due diligence I did satisfied me fully that this business was viable, BUT the government had hinted that this was looking like a ponzi scheme, we would of avoided it like the plague. On the other hand, IF all the due diligence left me less than 100% confident, BUT the government had allowed it to establish itself and had nothing negative to say about the business, then that would be maybe the deciding factor in making the business something I would invest in.
It seems to me that any time you say that you are going to do something for someone, you bear a heavy responsibility to do that thing. And on top of that, the tax man took a lot of money from PKI. That just adds to the responsibility.
I wonder what the price tag will be for the police investigation and the subsequent court time now that this has collapsed. Sorry to say to this online visitor, but the Canadian tax payer will be picking up this tab!
If any of the pigeon farmers apply for AgriStability they will probably end up with a payment for 2008 or 2009 (or have their margin drop for that year closer to a payment), depending on what they did with the birds and when.
When I heard about some dear friends of mine getting involved with an investment idea I was curious and looked into it. I happened to be at the ploughing match and ran into the "King" himself. After a brief chat I suspected that this was a Ponzi scheme. My farmer friend is now the wiser from this whole ordeal but not until he lost the family nest egg that his father and grandfather worked so hard to earn.
Dave, I have been following your relentless investigation and detailed correspondance since my friend "invested" back in the summer of 2007. I would like to say I have the utmost respect for what you have done. I just wish the authorities had acted sooner.
All the best
KW
It is appropriate that he be investigated. This scheme caused harm to many people, and no doubt lead to unnecessary financial stress for families that was not warranted. It is unfortunate that this happened, hopefully the legal process will do it's just work.
I to wish those that invested in this scheme are able to recover their investment.
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