Heavy is the head that wears the crown

The Pigeon King delivered his closing statement to the jury dressed in his only suit. His name was Arlan Galbraith, and he was representing himself. He had abruptly fired his lawyer nearly two years earlier, during the long lead up to the trial, and then ignored the judges who advised him to hire another. He seemed adrift but also supremely confident. One of his former employees, who testified for the prosecution, speculated that he must have watched too much “Law & Order”: “I think he sat down one day and said, ‘Yeah, I can do this.’ ”

It was December 2013, and Galbraith was being tried in Ontario Superior Court in Kitchener for engineering what a prosecutor described as “one of the biggest frauds in our history.” He was 66 and heavyset with graying hair, narrow eyes and a listless, nasal voice. “A very nice-looking, trusting face,” is how one woman, who invested $80,000 in his company, described him.

The suit Galbraith wore was dark, and we know it was his only suit because one of the many outlandish questions he put to witnesses during the monthlong trial was this: “Do you believe that this suit is the only suit I own and that I bought it in 1997? Do you believe that?” He worked into the same rambling cross-examination the fact that he was now “homeless,” staying in a friend’s 16-square-foot cabin in the “remote bush of far northern Ontario” — a detail that, like his only suit, he felt undermined the idea that he could have stolen money from hundreds of people. Two days later, he mentioned to another witness that the cabin had no indoor toilet.

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Galbraith’s reign as Pigeon King lasted seven years, from 2001 to June 2008, when his empire imploded. The prosecution likened his company, Pigeon King International, to a Ponzi scheme — much like Bernard Madoff’s operation, which happened to crumble just months after Galbraith’s, except that where Madoff’s scheme centered on stocks and securities, Galbraith’s used live birds. Pigeon King International sold breeding pairs of pigeons to farmers with a guarantee to buy back their offspring at fixed prices for 10 years. Initially, Galbraith told farmers that the birds were high-end racing pigeons and that he planned to sell the offspring to the lucrative markets that support the sport overseas. Later, Galbraith changed his story, telling farmers that the birds were part of his trailblazing plan to elevate pigeon meat, known as squab, from a fringe delicacy in North America into the next ubiquitous chicken. But in the end, “they were neither,” the prosecutor said; Galbraith never sold a single pigeon for sport or meat. He seemed to have merely taken the young birds he bought from Pigeon King International farmers and resold them, as breeding pairs, to other Pigeon King International farmers, shuttling pigeons from one barn to another. And this meant continually recruiting new investors so he would have the cash to buy the pigeons his existing investors produced every month. When Galbraith’s scheme finally fell apart, Pigeon King International had almost a thousand breeders under contract in five Canadian provinces and 20 U.S. states. He’d taken nearly $42 million from farmers and walked away from obligations to buy back $356 million worth of their baby birds, ruining many of those investors. A forensic accountant determined that signing up enough new pigeon breeders to pay off those contracts would have dug him into an even deeper, $1.5 billion hole. (All figures in this article are in Canadian dollars.)Continue reading the main storyAs more details came to light, Pigeon King didn’t look like a reasonable business. But it didn’t make much sense as a scam either. For seven years, until the day Galbraith shut down the company, he picked up breeders’ young pigeons on time and never broke a contract or missed a payment. In one three-year period, he paid out $30 million to farmers and other creditors. Many of his early investors walked away with six-figure returns. “I was doing the opposite to what a criminal would do,” Galbraith argued at the end of the trial. He paid the business’s major expenses in full, sometimes months in advance, and didn’t vanish when it was clear his company was coming apart. Instead, he stuck it out and wound up with virtually nothing. (Some years, Galbraith paid himself about $400,000, but he used much of that money to bail out the company.) Even his paranoid-sounding claims that he was taken down by a “fear-monger’s smear campaign” turned out to be basically true. He had no trouble signing up new investors until his credibility was attacked by a prominent Amish intellectual, an eccentric with a bullhorn and a small, muckraking farming magazine.

“I am not a lawyer,” Galbraith told the jury, summing up his case. “I am just a farmer and an entrepreneur, trying to defend myself against charges, which, I believe, should have never been brought against me in the first place.” He compared himself to Steve Jobs, a “risk taker and visionary,” and explained that all he ever wanted was to put “joy on people’s faces, by providing them with a better life through pigeon farming.” Even a few of his victims weren’t sure whether he meant to con them. During the trial, Galbraith asked a farmer named Ken Hoffman, “In spite of losing approximately $125,000, if Arlan Galbraith invited you to join him for dinner, to talk about the past, the present and the future, would you have dinner with him?” Without hesitation, Hoffman responded, “I certainly would.”

The story Galbraith was telling was simple: He started a business and failed. Then again, the prosecution’s story was even simpler: Galbraith was a liar. “Use your everyday common sense,” the prosecutor told the jury. “This isn’t a mistake.” The legal case against Galbraith seemed irrefutable: He misled many people, destroying lives. But to actually understand who the Pigeon King was — skilled con man or hapless businessman or hapless con man or all three — it may help to put common sense aside.

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