Pigeon King wins parole while victims divvy up PKI scraps

by BETTER FARMING STAFF

Ontario’s Pigeon King, whose wings were clipped two years ago following a fraud conviction, is out of jail — at least in part — thanks to a loophole in Canada’s legal system.

Arlan Galbraith, convicted in December 2013 of fraud of more than $5,000 and sentenced in March 2014 to seven years in prison, was released this year on July 17 on day parole and has been staying in an undisclosed community residential facility ever since.

During the mid-2000s until its bankruptcy in 2008, Galbraith’s Pigeon King International pigeon-breeding Ponzi scheme bilked investors of more than $70 million. Under the scheme, investors bought pairs of pigeons for breeding and sold the offspring back to Galbraith who in turn sold the birds to other investors.

During the 2013 trial 48 victims filed impact statements although some estimates place the number of investors in Canada and the United States at nearly 1,000.

At the time of Galbraith’s arrest the PKI scheme was considered Canada’s largest Ponzi in terms of the number of victims involved.

Galbraith has never publicly expressed remorse or admitted he did anything wrong, and refused to speak at his sentencing.

His full parole takes effect July 17, 2016, and he regains full freedom March 2021 when he is 74 years old.
 
Following a July 15 hearing, Parole Board of Canada member C. Trowbridge directed both day and full pre-release parole for Galbraith to take immediate effect. A parole board document released to Better Farming indicates Galbraith was well behaved while awaiting trial and in prison, and his release is conditional on:

• Avoiding contact with victims of the Pigeon King International scheme;
• Providing financial documentation to his parole supervisor;
• Avoiding a position of responsibility “paid or unpaid,” for financial management;
• Avoiding self-employment or operating a business;
• Undertaking employment that has not been cleared by his parole officer.

Holly Knowles, regional manager, community relations and training for the Parole Board of Canada Ontario region, said although the previous federal government eliminated accelerated (early) parole reviews in 2011, some people, like Galbraith, still qualify for an early parole review.

She explained the loophole arose from court challenges that successfully argued provisions that made the legislation retroactive were unconstitutional. Consequently, some people who committed crimes before the date could still qualify for an early parole review.  

“Accelerated parole review is a very specific kind of parole review, and it’s for offenders who are first-time federal offenders and who are convicted of non-violent offences,” Knowles said.

She also noted that victims who have registered with the board receive an offender’s parole decisions; victims can also submit information for the board to take into consideration when it is making decisions. They will also receive notice of any related hearings and can also obtain information about board decision-making “as well as the decision itself,” she said.

Knowles said that even though Galbraith is on day parole victims could still register with the board, which can be reached at 1-800-518-8817.

Lynn Robinson, the Crown attorney who led the prosecution against Galbraith, said she was unaware that he had been released on day parole. However, she did not find the early release surprising, noting typically when an offender is sentenced to time in the penitentiary they will serve one third of their time there.

He is still under sentence, she added.

Robinson said the conditions accompanying Galbraith’s parole “do address any concerns I have about re-offending.”

On Wednesday at a Holiday Inn in Kitchener it took Galbraith’s creditors only 18 minutes to attend to the final details of his and his former business’ bankruptcies.

During the brief session the creditors voted to consolidate the two bankruptcies. BDO Canada bankruptcy trustee Susan Taves said a bankruptcy court is likely to accept the registration of the consolidation of the bankruptcies and the creditors’ other decisions.

The combined claims from the two bankruptcies totaled $71 million, an amount that is $30 million more than what was listed in original 2008 documents. Taves explained that when creditors filed claims some were claiming higher amounts. "That is normal," she said.

The final dispensation to creditors might be made as soon as March.

Not that there will be much.

About 80 creditors owed $3 million will receive roughly five cents for every dollar they are owed. The value of the sale of Galbraith’s Cochrane property, cash and investments, GST credits and vehicles totals $438,000. After trustee, legal, auction and miscellaneous costs were recovered, there’s approximately $130,000 left to pay claims.

Another 260 creditors owed $68 million were deemed to be “contingent creditors” and ineligible for payment, another decision made Wednesday. Contingent creditors are those owed money for future barn rental or for birds that were never shipped.

Breeder-farmers will receive 75 per cent of the $13,000 payout, with 25 per cent going to institutional creditors.

While advance notices of the meeting were issued, most of the votes cast by creditors were proxies, about 29 in total. Only four creditors attended in person, and most of the 90 chairs were empty.

“There’s not much to say,” according to Regan Millian, Dungannon, a bankruptcy inspector: the poor attendance at today’s meeting indicates that most victims have moved on. “It’s been eight years,” said Millian, a creditor in both bankruptcies. Another inspector, George Lomas of Alberta, who largely represented Hutterite colonies in the West, did not attend the Kitchener meeting.

Dale Leifso, a Walkerton area resident and a former pigeon breeder who in 2013 estimated his losses from the scheme to be $300,000, said he did not qualify for settlement funds. “What a terrible slap in the face that was,” said Leifso, reached by phone on Wednesday. “BDO, they made sure they got their two cents out of this whole debacle. If my wife and I did not qualify for one penny then what a sham this whole operation was.”

Leifso had not known about Galbraith’s partial release in July.

Most creditors at the meeting refused to speak to the press. At least one attendee had been a witness at Galbraith’s 2013 trial. She and Millian were also not aware that the parole board had signed a release for Galbraith.

Taves said Galbraith was not required to attend the creditors’ meeting. BF