Friday, November 8, 2013

Now it’s pigeon soup

In another bizarre development at his trial for fraud, Pigeon King International founder Arlan Galbraith said he planned to market pigeon soup.

He originally told his sales staff that the pigeons he was buying on contract could be sold to pigeon fanciers and people who keep pigeons to race or as a hobby.

But when that no longer seemed plausible and a newspaper for Amish farmers in Pennsylvania began questioning the viability of the business, he switched his sales pitch to raising pigeons for meat, known as squab.

He is accused of defrauding hundreds of investors to whom he sold breeding pairs of pigeons for as little as $50, or as much as $500, accompanying the deal with a contract to buy back offspring at profitable prices.

He could only afford to buy offspring as long as he could continue finding investors for breeding pairs.

Iowa State officials banned him because they called his business a Ponzi scheme – i.e. with no ultimate profitable market for pigeons.

That and extensive and multiple awards-winning coverage in Better Farming raised enough questions to dim the company’s prospects.

Galbraith put the business into bankruptcy in the summer of 2008, seven years after he started selling pigeons as breeding stock.

There was testimony that he told Mark Wolfe, one of his salesmen who was a recent university graduate,  that he would retire when he had made $10 million and then would turn the business over to Wolfe.

But in cross-examination after Wolfe testified that he thought Galbraith was well-intentioned, Galbraith called Wolfe lazy.

Earlier he accused another salesman, Bill Top of Drayton, of conspiring with “the Amish mafia” to bring down the business. Top countered that there’s no such thing as an Amish mafia.

Top was successful in marketing pigeons and contracts to more than 100 Amish and Mennonite farmers in Pennsylvania.

Crown attorney Lynne Robinson says Galbraith garnered about $40 million in revenues and when he stopped selling, he had signed contracts to buy $340 million worth of pigeons.

Besides one count of fraud, Galbraith faces four charges under the Bankruptcy Act, infractions such as failing to turn in a credit card and drawing advances from a bank account.