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Investors cautioned about pigeon scheme – Attorney General’s office investigating

By Staff | Dec 15, 2007

DES MOINES–Anyone in northwest Iowa who was approached about buying into a pigeon breeding scheme should take heed, according to the Iowa Attorney General’s office.

Pigeon King International Inc., which has established what appears to be a pyramid marketing scheme based out of Waterloo in Ontario, Canada, as well as in a number of North Central states, has had its business placed on hold by the Attorney General’s office. According the information distributed by the company, investors have the “opportunity” to pay $500 per pair of pigeons with a minimum investment of 100 breeding pair, for a $50,000 investment.

The only problem is finding an established market for the pigeons–other than passing on the investment “opportunity” to others.

And, at $500 a pair, that would be some pretty expensive pigeon pie. A number of northwest Iowans have reportedly invested in the plan to the tune of $100,000 or more.

“We have been asked about the validity and legality of solicitations for major investments in pigeon-breeding operations,” said Bob Brammer of the Attorney General’s Office. “We are investigating this matter. We believe that potential investors/buyers should be very cautious and examine the situation very carefully — especially the question of whether there is a realistic and independent market for pigeons now and in the futures.”

“Pigeon King International, Inc., based in Waterloo, Ontario, invites investors/buyers to invest as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs.”

After the company’s business plan was questioned by the public, it has stopped seeking any more investors in Iowa.

“Pigeon King International has informed our office that as of Nov. 13 they would not solicit more Iowa investors, but we still warn any Iowan to be extremely cautious if they face an opportunity to make such an investment,” Brammer said. “Furthermore, Pigeon King has stated to our office that it will continue to make all payments required by existing contracts with Iowans.”

Those contracts call for Pigeon King to buy back squabs.

“The Farm Division of the Iowa Attorney General’s Office has issued a formal ‘Civil Investigative Demand’ or CID to Pigeon King International, Inc., and Arlan Galbraith, president and CEO of the company. The CID, which was issued in November, asked Pigeon King and Galbraith to provide various detailed information about their operation and plans for the future,” Brammer said.

“The Civil Investigative Demands states the Attorney General’s Office has concerns that Pigeon King International business practices may be violating the Iowa Consumer Fraud Act and the Iowa Business Opportunities Law, including ‘misleading consumers regarding the true viability of establishing several large pigeon processing plants within a time frame that would allow the business opportunity marketed by the respondent [Pigeon King International] to have a legitimate independent business purpose’ other than ‘providing inventory for new growers in furtherance of a Ponzi type of investment scheme.'”

“To comply with the Civil Investigative Demand (CID), responses must be made under oath and received by the Attorney General’s Office by Dec. 19, 2007,” Brammer said. “A Civil Investigative Demand can be enforced by Iowa courts, and the State of Iowa can seek a court injunction if a respondent refuses to comply with a CID.”

Anyone who has been approached about the investment may call Brammner at the Iowa Attorney General’s office at (515) 281-6699.

Contact Michael Tidemann at (712) 362-2622 or mtidemann@esthervilledailynews.com and visit our photo sharing Web site at cu.esthervilledailynews.com