Investors in Arlan Galbraith's alleged pigeon Ponzi scheme fail to show for prosecutor's meeting
Saturday, June 18, 2011
by BETTER FARMING STAFF
A key witness in the Crown's case against alleged pigeon Ponzi mastermind Arlan Galbraith withdrew from a victims' meeting Thursday. Bill Top a former Pigeon King International salesman, who joined the conference held in Kitchener, by telephone from his Sydney Nova Scotia home, told Better Farming he objected to the participation of Mark DeWitt, another former PKI salesman.
Top says after he stopped working for PKI he told DeWitt, who now lives in Ottawa and some other pigeon salesmen who followed him, that PKI was a scam.
Assistant crown attorney Lynn Robinson, who called the meeting, confirms that Top left the meeting after she heard him object to DeWitt's presence.
It's a problem because Robinson needs all the former employees to prove her case, she says — not just ones that get along with each other. "I need Mr. DeWitt to testify. I need to have a positive relationship with him at least as far as that goes."
It's true of any case, she says, using a gang stabbing as an example. "I have to be nice to the other gang members, talk to them and try to get their evidence from them because I need it. And they have right to be informed as to what's expected of them and they have the right to be informed of how everything's going."
Robinson expresses concern about the low turnout at the meeting. Only 10 people attended in person and another two joined in via telephone, she says. Three were former employees of Galbraith’s. The others were former investors in his scheme, Pigeon King International. The meeting was open to the 917 people who filed statements with police.
"I think people are feeling what I call witness fatigue or victim fatigue," she says. That the meeting occurred in the middle of crop season didn't help. "We had regrets extended to us from a number of (members in) the Mennonite community," she says. Her office is working on ways to exchange information with victims.
“They are entitled to talk to the court or to file a victim impact statement and we just want them all to know that,” she says.
Galbraith's Pigeon King breeding scheme offered pigeon breeding pairs for as much as $500 and bought back offspring for up to $50 each. After the company failed in 2008 the Waterloo Regional Police Service's fraud squad and the RCMP began a joint investigation, acting on allegations the operation was a Ponzi scheme.
They charged Galbraith in December 2010 with one count of fraud over $5,000 and four counts under sections 198 (2) and 199 (b) of the Bankruptcy and Insolvency Act. He has not been convicted of any charges. Police estimate about 1,000 people invested a total of $20 million in the scheme, hoping for profitable returns.
Robinson says she would not be able to prove beyond a reasonable doubt that Galbraith began the venture with a Ponzi in mind. "But at a certain point the numbers that are in his own handwriting make it clear that he who is writing those numbers knows that he was defrauding people," she says.
Money from later investors was used to pay earlier investors. The only benefit to Galbraith was a "modest" increase to his lifestyle. "That's less money than I make," Robinson says of the $50,000 a year that she says Galbraith drew from the company. She notes that assets the company helped fund, such as a home in Kitchener and an estate near Cochrane, Ontario, were already seized through bankruptcy actions.
Both Galbraith and his business have been declared bankrupt.
She says the search for funds was why the police investigation into the case took so long. "The police wanted to make sure that they left no stone unturned searching for where did the money go."
Galbraith has not yet indicated whether he will plead guilty or fight the charges. He claims that he is gravely ill but Robinson hasn't seen anything to substantiate the claim.
If Galbraith pleads guilty the judge will reduce his sentence, she predicts. She could not estimate by how much. "It's really hard to talk numbers at this point because I don't know exactly how much he'll admit."
Sometimes what happens is that an individual admits to part of a charge but not all of it and then a decision has to be made about whether to continue to fight the portion of the issue that hasn't been acknowledged. "That's why I want to talk to everybody," she says. If three quarters of those who lost money "don't want to participate, I need to know that before I go into negotiate."
While she says she wants to see Galbraith punished, "we also have to work on healing the community." There was nothing criminal about the behaviour of anyone else involved in the scheme, but there is a basic morality issue, she says. Some investors profited from the venture while others lost their homes. “Everybody has to come to terms with the fact that their neighbour got in and got out and that’s where their money is.“ Those who made money have to come to terms with having made gains from "a criminal scheme" that may have bankrupted a neighbour.
Robinson estimates that there will be movement in the case in the next couple of months and by Christmas it will be known whether they are dealing with a guilty plea or a preliminary hearing and trial.
Robinson says no one in the room seemed surprised with what she had to say. She declined to identify those who attended in person. She explained that she did not know what their wishes were concerning remaining anonymous.
Those who want to file victim impact statements or keep in touch about the proceedings can contact Laurie Black Rooney at 519-741-3300x2278.
Galbraith’s next scheduled court date in Kitchener is August 24. He could not be located reached for comment. Details surrounding his release on bail are subject to a publication ban. None of the charges or allegations against him have been proven in court. BF