Pigeon King agrees to pay $1,000 and stay out of Washington state UPDATED

Wednesday, May 7, 2008

© AgMedia Inc.

by MARY BAXTER & ROBERT IRWIN

The department is also requiring the company to pay $1,000 to cover the costs of investigation into the matter.

“Basically they wasted their time worrying about somebody that’s not even interested in doing anything in their state – which I would have told them if they’d ever thought to call me,” said Arlan Galbraith, the company’s owner, on May 5.

Galbraith and his Waterloo, Ontario based company offer farmers various types of pigeon breeding contracts that include a guaranteed buy pack provision.

The consent order was issued on May 2 but not publicized by the department until this week. It follows a notice issued in March by the department, that it planned to order Galbraith and his company to “cease and desist,” from operating in Washington if he didn’t deliver proof of being a viable business. The company had the options of responding, requesting a hearing or entering an agreement concerning the issue.

Galbraith was adamant that his company had never been interested in doing business in Washington state. “They just assumed I was doing business in Washington state,” he said.

According to state documents, the company was found to be in violation of its business opportunity laws, which require businesses offering opportunities to register if planning to operate within state boundaries.

The documents also say Galbraith issued “misstatements of material facts and/or omitted to state material facts necessary in order to make the statements made, in light of circumstances under which they were made, not misleading and/or engaged in acts and practices that operated as fraud or deceit.”

Martin Cordell, the department’s chief of enforcement, said the department will take action without contacting a business first if it’s fairly clear that a law has been violated. In the case of Pigeon King International, he noted the first action taken was to issue a notice, which meant the business did have an opportunity to respond before further action was taken.

Cordell said the department decided to look into the business after a Washington resident brought the business opportunity to their attention. He said around the time the resident made the inquiry his department had been made aware of the company. Cordell said he could not recall how the business had been brought to his department’s attention.

Cordell also noted that the company would be able to operate in the state – if it complied with the state’s registration requirements. Those requirements include providing certain written disclosures concerning financial statements, something Pigeon King International has so far failed to provide.

Late last year, the State of Iowa took similar action, issuing a civil investigative demand that required Pigeon King International to cease its operations there and deliver proof it had “a legitimate independent business purpose” other than “providing inventory for new growers in furtherance of a ‘Ponzi’ type of investment scheme.”

According to Erin McIntyre, an enforcement attorney with the State of South Dakota, correspondence between her office and Pigeon King International has resulted in the company voluntarily stopping its activities in that state.

Citing privacy laws, McIntyre declined to comment on when the correspondence took place or who initiated it.

In a telephone interview Galbraith told Better Farming he has no interest in doing business in South Dakota.

Watch Better Farming.com for more coverage on this issue. BF