Monday, May 19, 2008

Ponzi pigeons? Washington state thinks so

The state of Washington has issued a cease-and-desist order to Pigeon King International, which officials in at least one state suspect is a Ponzi scheme, reports Farm and Dairy, based in Salem, Ohio.

Andrea Zippay writes, "Investigation showed pigeon breeder Arlan Galbraith and his company violated the state's Business Opportunity Fraud Act and were not registered with the state to offer business opportunities there." Galbraith dismissed the state's action. The order "doesn't mean anything, really. It sounds important, but it's not," he told Zippay. He said the action resulted from "lots of troublemakers out there who are complaining." The state fined Galbraith $1,000, which prompted him to say he is not interested in doing business in Washington or any state where he and his company are not welcome.

Pigeon King International tags itself the world's second largest pigeon breeder and "invites investors and buyers to invest as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs. Galbraith, in turn, contracts with the growers to buy back the offspring. he's told them the pigeons will be sold to new investors, and on the marketplace for meat or as pets." (Photo by Mike Segar, Reuters)

Farm and Dairy reported that the Iowa attorney general completed an investigation of the company in March and expressed concern that Pigeon King was a Ponzi scheme, defined "as an investment fraud in which early investors are paid with money obtained from later ones in order to create the illusion of profitability."

Galbraith said Pigeon King owns more than 2,900 pairs of breeding pigeons in Ohio, Indiana, and Pennsylvania, and conducts business in several U.S. states and Canadian provinces. The company's Web site was under construction at the time of this post.

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