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March 7, 2015 6:25 PM   Subscribe

The Pigeon King and the Ponzi Scheme that Shook Canada

The original, award-winning exposé of Pigeon King International by Better Farming magazine does not appear to be available online, but they do have an extensive archive of online articles regarding PKI and Arlan Galbraith. Alt link. The archive should be considered a spoiler for the main link. The magazine's editorial staff explained their investigative methods here.

A (MLM) Skeptic: Scam Study: Pigeon King

2008 Farm and Dairy newspaper article: You’re raising what? Pigeons!
posted by zarq (22 comments total) 16 users marked this as a favorite
Who would have guess that a pigeon-meat business would result in all this squabbling?

posted by percor at 6:49 PM on March 7, 2015 [10 favorites]

Fascinating story, but lets see if Metafilter can be strong enough to make it two comments in without stooping to puns.
Dammit percor!
posted by qinn at 7:27 PM on March 7, 2015 [3 favorites]

What I find fascinating and alarming about this -- besides the issue of what Galbraith actually thought he was doing -- is the demonstration that even in this internet age of easy availability of information, it's entirely possible to run a multimillion dollar business/scam that doesn't bear any real scrutiny but which law enforcement and regulators and just general folk all think is perfectly normal.
posted by Ivan Fyodorovich at 7:45 PM on March 7, 2015 [1 favorite]

My takeaway is that the writer tried very hard not to be condescending to everyone mentioned and failed. However, "Thornton began investigating Pigeon King in the summer of 2007 after being tipped off by a Mennonite nut grower" is intriguing.

As usual, I could be wrong.
posted by skyscraper at 7:51 PM on March 7, 2015 [1 favorite]

Ponzi scheme stories are essentially all the same, and yet I find them endlessly fascinating. The question of what Galbraith thought he was doing is an interesting twist. Is it possible to be so naive about pyramid schemes that you can be in denial about the fact that you're running one?

Irrelevantly, I found myself thinking that if anybody is ever going to get people to start eating pigeon on a regular basis, pigeon meat needs a better name than "squab." Because "squab" sounds gross. They'd need a name that made it sound tasty and simultaneously hid its connection to the pigeons and doves we all see around us all the time. Kind of like how what used to be called "prunes" are labelled "dried plums" at the grocery store these days.

I think the people who were willing to be extensively interviewed, like Christine Bults, are pretty brave, because it's so easy to see in retrospect that this was a scam, and they open themselves up for a lot of judgment and ridicule. I appreciated hearing her family's story. That moment when she started to think there couldn't really be a market for all the pigeons Galbraith was hauling off her farm every month, and started just hoping things would hold together long enough for her to get her loan paid down. A thing I'm always troubled by in Ponzi scheme stories is how much people lose and how unrecoverable their losses nearly always are.
posted by not that girl at 8:37 PM on March 7, 2015 [1 favorite]

He's a real Birdy Madoff.
posted by ecorrocio at 8:47 PM on March 7, 2015 [3 favorites]

not that girl: "Kind of like how what used to be called "prunes" are labelled "dried plums" at the grocery store these days."

Or the invention of Chilean Sea Bass.

Back to the topic at hand. So, did anyone come out OK in this? The article mentions that the first few breeders were getting great returns, but it neglects to say if any of them was lucky enough to cash out at the right time.

Seems like devastation to all involved. Very heartbreaking.
posted by InsertNiftyNameHere at 9:21 PM on March 7, 2015 [1 favorite]

doesn't the company name PIGEON KING tell you all you need to know?!?
posted by oneswellfoop at 9:28 PM on March 7, 2015

oneswellfoop: "doesn't the company name PIGEON KING tell you all you need to know?!?"

Good call.
posted by InsertNiftyNameHere at 9:31 PM on March 7, 2015

The first "clients" of a Ponzi scheme always do well; that's how it starts growing. And this scheme ... doesn't sound implausible; it's not like the "airplane game" or whatever they're calling it now; there really could be a decent market for pigeon meat. Mind you, a common characteric of Ponzi schemes is that they're sold on the basis of a business that is actually profitable on a small scale, but impossible to expand. Ponzi himself claimed to be arbitraging postal coupons.
posted by Joe in Australia at 3:58 AM on March 8, 2015

When the crux of the whole enterprise is selling your product to a single buyer, and that buyer is less than forthcoming about who his customers are, wouldn't you see for yourself whether such a market exists? And be suspicious when you find that basically no one but Galbraith is buying pigeons at all?

And from that last (laudatory) link: And the Rinkeses acknowledge after their breeders have lived their 10-year productive life, they’re sent for slaughter to be served in high-end restaurants as $100-per-plate squab or for pigeon pie or soup.

Say what? High-end restaurants are not going to be roasting ten-year old pigeons. And they're not going to charge a hundred bucks. The most expensive squab dinner I'm aware of goes for $44 at Naha in Chicago: Whole Roasted Dressed Squab with Licorice Scented Purple Sweet Potato, Broccoli Rabe, Braised Shallot, Cranberries, Spaghetti Squash and Rose Petal Marmalade. (And it's delicious.)

Anyhow, an absorbing read!
posted by Short Attention Sp at 5:02 AM on March 8, 2015

Say what? High-end restaurants are not going to be roasting ten-year old pigeons. And they're not going to charge a hundred bucks. The most expensive squab dinner I'm aware of goes for $44 at Naha in Chicago: Whole Roasted Dressed Squab with Licorice Scented Purple Sweet Potato, Broccoli Rabe, Braised Shallot, Cranberries, Spaghetti Squash and Rose Petal Marmalade. (And it's delicious.)

I can go you one better. According to this Edible Manhattan article, the Winter tasting menu at Per Se in Manhattan was $295 in 2012 ($310 today,) and included squab.

I thought this was fascinating:
Ariane Daguin, the famous French tastemaker behind gourmet ingredient supplier D’Artagnan, has helped Americans forget prejudices against fowl and other fauna. (Her father, Michelin-starred chef André Daguin, remains a star for championing magret, the large breast of the Moulard— the duck breed prized for foie gras—served rare.) In New York Daguin is very well known for foie gras, and, to a lesser extent, rabbit—both meats that are beloved in France but have something of a PR problem in America. Pigeon fits that portfolio perfectly, and under her wing, the bird has found favor here, albeit not under that name. Today D’Artagnan provides most fine Manhattan restaurants with their squab, dispatching 1,800 to 2,500 birds per week.

D’Artagnan offers several breeds of squab, but the King breed is their star. “I really fell in love with that when I arrived here because we don’t have that breed in France, and it’s exceptionally plump,” says Daguin. “I think I’ve been raving so much about it that some people in France have now brought it there.”

D’Artagnan sources squab from a cooperative of free-range farms in California. They’re harvested at about 28 days old, when the squabs reach adult size but before their young muscles toughen. “We have a very funny way to test whether the squab are the right age when they arrive at our loading dock,” Daguin says. “We open the cages, and if they fly out, that means they’re too old.”

posted by zarq at 7:21 AM on March 8, 2015 [1 favorite]

Something worth noting here is that quite a bit of Galbraith's pyramid was built on Anabaptist farmers, whose communities are significantly different than ours. First, they have a very different understanding of animal husbandry than we do, and for me that's the more intriguing failure. That there seemed to be zero interest in breeding the animals for traits either market would have supported—squab or racing—is very surprising. But the fact that the market seemed to be supporting what I'm sure all participants agreed were very attractive prices, perhaps there wasn't yet a perceived need for selective breeding.

The fact that his victims were primarily Anabaptists may also be a reason why this went on so long. There wasn't much in the way of centralized information about what was going on, instead there was trust and word-of-mouth; Families sharing with other families. If one family shares their success story, it would be very unusual for an Anabaptist to question the information. And since there wasn't much documentation or even public anecdotal evidence that any government agency had access to, I'm not surprised that an official response took so long. The author of the article certainly notes that this scheme had a major impact on a lot of Anabaptist communities, and the very private nature of those communities makes it difficult if not impossible to dig into how deeply affected those communities were, but a key feature of this crime is that it exploited certain cultural elements of a specific group of people, and that's what really upset me about how sympathetically the author frequently portrayed Galbraith.
posted by Toekneesan at 9:31 AM on March 8, 2015 [4 favorites]

I'm also one of those people endlessly fascinated by Ponzi schemes and pyramid/MLM schemes.

I can recall reading about a few others that have specifically targeted Amish or Mennonite communities. There was this one in Ohio, where the guy running it was Amish himself.

One of the things that ends up working in the favour of the scammer is the fact that you can always find people, whether they're part of a tightly-knit religious community or not, who either will be just greedy enough that they're willing to ignore the early red flags, or, when the penny drops, just ashamed enough that they got taken that they'd rather the whole thing just go away. Add to that a community where word travels slower because of technology (or rather, the lack thereof), and you've got yourself some pigeons. Also, if you have a community that would rather handle things amongst themselves rather than involving the authorities, it can give your scam longevity it might not have otherwise.

It seems likely Galbraith could have structured the scam differently and run it longer, but it's maybe unsurprising he didn't. All Ponzi and pyramid scams have to collapse eventually. Consequently, the person running one better have an exit strategy. The weird thing is, most don't or they cobble together one too little, too late. Even the eponymous Charles Ponzi himself stuck around too long - nothing was stopping him, at one point, from disappearing with a pretty sizeable take.

But I guess that just tells us that "alot" is never enough if you're the type of person who'd run a scam like that.

I too thought the NYT piece was a little too empathtic to Galbraith, but at the same time, it does lay out what a vindictive psychopath he is. It struck me that his decision to represent himself was a last chance to browbeat and bully his victims, and he jumped on it.
posted by mandolin conspiracy at 10:39 AM on March 8, 2015 [1 favorite]

From reading similar accounts I get the impression that many Ponzi Schemers are in search of a feeling rather than financial gain per se. They get to be wealthy providers of wealth, and the head of a family that is rewarded the more it believes. There are many many people who would lie to give others what they want in the short term with little thought for long term consequences.

In that sense I think asking whether a ponzi schemer of a certain kind knew what they were doing is lateral to their own priorities: they believe in the process rather than the result. What little "origin story" was provided casts him as a man who already had reason to define himself in terms of his ability to provide for others.

I suspect that the Ponzi schemers who are in it for the wealth alone are the ones that know to disappear when the going's good.
posted by tychotesla at 12:52 PM on March 8, 2015 [3 favorites]

WILD story. Thanks for sharing.

The NYT article made a good point he was actually keeping and feeding all those pigeons at cost... I'm just amazed he was able to keep it up for so long.

And here's the CrimeBustersNow website...I can't really understand what you're supposed to do other than look at the cool 3D Flash animation? Maybe with bagging the Pigeon King he feels he can rest...
posted by pravit at 1:32 PM on March 8, 2015

Maybe with bagging the Pigeon King he feels he can rest...

I went to that page on my iPad, so saw it with no Flash at first. It gives you the static text-as-image rant that appears in the Flash sequence, about some banks and one Alan Kippax.

Judging by all the random underlining in the rant, I don't think he's resting so long as the money Kippax took is missing.

If you want to see some Mr. CrimeBustersNow (a.k.a. David Thornton), in action he appears in the CBC investigation of Kippax. He appears around 12:55 in. I mean, he's right to be angry about the guy because Kippax is well and truly an awful human being.

But he could really use a web designer, or at least a WordPress template or something.
posted by mandolin conspiracy at 2:16 PM on March 8, 2015

I think that tychotesla is onto something. These big ponzi-schemers are very likely going to be distinct from your garden-variety con-artists and in important ways. The optimum size for any scam of this sort is much, much smaller where you maximize your returns against a minimal risk. You grow beyond that, you're certain to draw a lot of unwanted attention. It really can't be primarily about the money for these kind of folk, it has to be something else. And most professional con-artists I've heard of are quite aware of what they're doing -- a big part of what they'e about isn't the money, either, but a sense of control and superiority. But these big ponzi guys are different, I've seen a common thread in these accounts of what really looks like some amount of self-delusion.

My sense is that through this self-delusion they walk a line between avarice, deceit, manipulation, and all the supposedly positive, honest things they present themselves as doing.

Not that it matters. Galbraith badly damaged a whole bunch of people. In terms of justice, I don't think it matters at all how much he was honest with himself about what he was doing and what his motivations were. There was no way he didn't know about the actual reality of what he was doing and what was going to happen.
posted by Ivan Fyodorovich at 11:11 PM on March 8, 2015 [2 favorites]

This story would be an excellent subject for an Errol Morris film.
posted by scottjlowe at 1:03 PM on March 9, 2015 [1 favorite]

This story would be an excellent subject for an Errol Morris film.

Fast, Cheep and Out of Control?

*backs away slowly*
posted by mandolin conspiracy at 1:15 PM on March 9, 2015 [2 favorites]

Hi guys. I am the blogger at A (MLM) Skeptic, and thanks for the link. That was one of my earlier pieces and I didn't link as much as I *should* have, my apologies for making it a bad research piece.

There is a footnote: Galbraith was FINALLY sentenced to 7 years in 2014:


The problem is a lot of these ponzi schemers are either self-delusional or narcissistic (or both), the ends justify the means, and all that. They feel they are entitled to bend the rules when it inconvenienced them. Galbraith basically blamed the victims for hamstrung his vision of the factory and all that. Bolze who ran a scam in Arizona tried to protest his prison sentence enhancement (because he defrauded seniors) by claiming "they knew what they were getting into". Paul Burks of ZeekRewards was famously quoted by newspaper "I never told them to put in more than they could afford to lose. Don't blame me."

It is a sad observation that as long as there are sheeple, there will be wolves (and foxes) out to prey upon them.
posted by kschang at 12:08 PM on March 10, 2015 [4 favorites]

These get rich schemes really show how we squabble around for more money for our nest eggs, don't they?
posted by clvrmnky at 4:58 AM on March 11, 2015

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