Former Mapleton Township resident Bill Top testified last week against Pigeon King International (PKI) and its owner Arlan Galbraith.
Top resigned from the company in 2006 amid concern that there was no end market for the pigeons being sold by the company to customers throughout Canada and the U.S.
CTV reported that during cross examination on Nov. 6 Top told Galbraith, who is representing himself in the case, that PKI was “a corrupt business” and Top “did the right thing by stepping down.”
Galbraith, 66, is accused of conducting a pigeon breeding scheme in which hundreds of investors, including many from Wellington County, lost millions of dollars.
Galbraith is charged with fraud and four violations of the Bankruptcy Act in connection with the collapse of his business. The trial began last week in Kitchener and is expected to last about eight weeks.
PKI, which employed about 50 people and had offices in Moorefield and Waterloo, declared bankruptcy in 2008, leaving hundreds of thousands of pigeons in limbo, and some investors wondering if they would lose their farms.
At the time, a letter to breeders from Galbraith said the move to declare bankruptcy was motivated by several economic factors and a “spiteful campaign” organized by his critics.
PKI, which had several holding barns throughout central and northern Wellington County, would charge independent breeders up to $500 for a pair of breeding pigeons in return for a guarantee to buy back all their offspring for 10 years for about $50 each.
Many investors would buy 200 pairs of pigeons or more at a time, for a total investment upwards of $100,000. Some even transformed parts of their farm operation in order to breed pigeons.
Bankruptcy documents filed by PKI indicated seven of 12 Canadian barns rented by PKI were located within Wellington County, as were the homes of at least 12 employees.
The documents showed total PKI liabilities based in the county (for breeders and rented barns) were over $1.3-million.
Galbraith originally offered pigeons for racing but later changed his business model. He often claimed, as he did on the PKI website, the goal was to “offer quality squab at a very affordable price on a massive scale,” which he said had never been done before.
He also predicted avian influenza would destroy the North American chicken industry – and pigeons, being very resistant to most strains of avian flu, would take over the market.
In 2007 and 2008 PKI was banned from conducting business in Washington, Maryland and Iowa, and had agreed with a South Dakota state attorney to stop its activities in that state as well.
U.S. officials, including Iowa Attorney General Tom Miller, questioned the validity of PKI’s business, specifically “whether there is a realistic and independent market for pigeons now and in the future.”
Top previously told the Advertiser Galbraith billed himself as a family man and touted his pigeon breeding company as a way to “save” family farms that were in financial trouble.
The company had many Amish farmers in the U.S. and southern Ontario as investors, Top said, some of whom contacted him with their concerns.
“I received hundreds of calls from Amish people crying on the phone because they’re worried about losing their farm,” he previously told the Advertiser, noting the issue has divided many of those families.
Top said he quit his PKI position as a U.S. salesman in February of 2006 after he became suspicious about the abnormal growth of the company and its number of breeders.
In just six months Top said he helped PKI grow from just seven U.S. breeders to about 135.
He took great pride in his role in that growth, but said he began to wonder about the actual market demand for the pigeons. After repeated attempts to get an answer from Galbraith, Top said his boss finally came clean.
“I sat down with Arlan one day and he actually said, ‘I’m in the business of selling breeders,’” Top said in 2008.
He resigned and remained silent for some time, largely due to what he called “intimidating” threats of a lawsuit should he speak poorly of the company.
But having had his own family lose its farm under different circumstances, Top said he had to speak out with the hope of saving other families from the same fate.
Top said current and prospective investors eventually started to listen to him, particularly after the scheme was first profiled in several on-line and magazine articles by Better Farming.
“The final nail in the [PKI] coffin” came when many PKI investors opted out after talking to him, Top said – which he estimated could have cost the company upwards of $1.5-million.
