About Pyramid Scheme AlertPyramid Scheme Alert ResourcesPyramid SchemesDonate to PSAPyramid Scheme Alert Action


Pyramid Scheme Alert (PSA) provides current and historical news items that are of interest to our members and visitors. None of the reports or commentaries is intended to imply that any of the referenced companies have been charged or convicted as illegal pyramid schemes.

See a Canadian Television News Report on the Pigeon King Scheme.

Read an in-depth Analysis by Canadian Attorney, Michael Webster, on the Pigeon King Scheme.

June '08 Update on Canada's Pigeon-based Ponzi:
Pigeon Scam Collapses; Farmers Ruined. Canadian and US Federal Regulators Stand by and Watch

June, 2008

The Ponzi scheme disguised as a pigeon breeding business, called Pigeon King International is now finished, bankrupt and closed. As many as 1,000 family farmers in Canada and the USA were lured in. Most lost their entire investments. Better Farming Magagine which had painstakingly detailed the scam to the public, the media and the goverment, reports that entire retirement funds were lost by some investors.

The Canadian authorites were notified as early as August, 2007 of the growing scam and the scale of losses that were impending. Consumer watchdog, Dave Thornton, published on the internet an open letter to the scheme's organizer, Arlan Galbraith, calling the company an "Illegal Ponzi Scheme and Money Laundering Fraud." The Iowa Attorney General issued a warning to consumers in December, 2007. Pyramid Scheme Alert reported the scam on its website in January, 2008. Better Farming Magazine did an award-winning in-depth report on the scheme, and the Canadian Broadcasting Corporation (CBC) did a full television report.

Some farmers invested as much as $1,000,000. Many reinvested money they gained from the scheme. Returns were obtained from the investments of later investors. The perpetrator Alan Galbraith who operated "Pigeon King International", had no external market for the pigeons. He sold "breeders" and then contracted to buy the offspring at agreed upon prices. The selling prices of the breeding pairs and purchasing prices of the offspring were arbitrary but promised very high rates of return to the farmers who invested.

Galbraith constructed an elaborate lie about markets and future sales of the pigeons and he falsely inflated the values of the pigeons. In effect, the ponzi merely used the poor pigeons to launder the money and disguise the fraud, just as many multi-level marketing scams use soap and vitamins.

Alan Galbraith who organized the scam is still at large. He claimed he had a plan that would "save the family farmer." Canadian authorities never prosecuted the scheme and still have not brought charges against Galbraith. The collapse is as much a scandal for the government as for the those who lost their money, many of whom were in Amish and Hutterite religious communities.

As reported earlier by Pyramid Scheme Alert, the Canadian authorities played "hot potato" with the case, handing it back and forth, with each agency claiming the fraud was not covered in its jurisdiction. Some Canadian authorities seem to imply that ponzi schemes were legal in Canada!

An official from the Competition Bureau, Canada's equivalent to the U.S. Federal Trade Commission (FTC), wrote, " the business practices of Pigeon King International do not appear to meet the definition of a "scheme of pyramid selling" which must first and foremost meet the definition of a "multi-level marketing plan" as stated in section 55. (1) of the Act. I have taken the liberty to forward your concerns to the Ontario Provincial Police Anti Rackets Section."

In other words, Canada's Competition Bureau claimed it only recognizes a Ponzi scheme as a fraud if it meets the technical definition of a multi-level marketing scam. Other types of Ponzi frauds are ignored! The Competition Bureau passed the "hot potato" to the Ontario Provincial Police, which did nothing. Some police officials told consumer advocates they were "too busy investigating murders and home invasions." Others explained that such investigations were expensive, time consuming and complex and were beyond their capabilities. This same argument is frequently used by do-nothing regulators in the USA.

According to Better Farming Magazine, the investments of ruined farmers could exceed $1 billion. Additionally, as many as .5 million pigeons are now vulnerable to neglect, starvation or slaughter. Their economic value, which had been falsely established in the fraud, has now evaporated, and the farmers will not be able to afford to keep them. The pigeons are now equivalent to the dead inventory that MLM participants are left with after they fail to make the promised profits and quit the schemes. The pigeons raised in this Ponzi are now a health and animal cruelty concern in Canada.

As is typical in all pyramid and ponzi cases, the whistle blowers are being blamed by the perpetrator for causing the collapse. Galbraith sent a letter to investors in which he blamed "fearmongers".

In fact, the whistle blowers should be receiving medals from the Canadian government for doing what the government would not do, and thereby saved many others from losses. The collapse of pyramids always brings pain, but lessens the scale of the pain that would have been caused if the scan had continued.

Pyramid Scheme Alert wishes to congratulate and thank the whistle blowers on this terrible scam which has ruined so may farmers. The include:

-- Dave Thornton of Crimebustersnow.com, a tireless consumer watchdog who, at great cost to himself, notified the government and some banks that had financed Pigeon scheme investments. He personally warned many farmers who were saved from investing.

-- Bill Topp, a former employee of Pigeon King International, who recognized the company was operating a scam and came forth with facts . He published a letter to authorities at his own expense and risk. See his letter.

-- Robert Irwin, the publisher of Better Farming Magazine. Read his full account of the scams collapse.

-- The State Attorney General Offices of Iowa, the first state that banned the scam and warned consumers about it. Iowa was followed by similar actions of authorities in Washington state, Pennsylvania and Maryland.


Pigeons, Soap, Vitamins and Weight Loss Pills

Consumers Need to Understand How Fraudulent Ponzi's and Pyramid Schemes are Disguised.
--A Consumer Bulletin

Now Available,
Updated, Revised and Expanded

  • The most comprehensive and easily understood analysis of Multi-level Marketing
  • The true facts about MLM income promises and claims.
  • Eleven (11) MLMs Analyzed with Income Data
  • Charts on each MLM with Summaries and Explanation

Read before you invest… Read if your friends or family want you to join an MLM… Read to understand why and how money is made and lost in MLM.

This page last updated on 6/19/08