Howard Ruff Hired as Chief Executive of FundAmerica
Doomsayer, newsletter publisher and book author Howard Ruff on Monday was named president and chief executive of FundAmerica Inc. and announced that he and his associates intend to buy the controversial company’s outstanding stock.
He replaces FundAmerica founder Robert T. Edwards, who was arrested July 19 by Florida authorities on charges of operating an illegal pyramid scheme. The company and Edwards maintain that FundAmerica is a legitimate business.
Edwards, who was released on $1 million bond, resigned as president, CEO and a director last week. The company’s operations are under investigation in several states, including California, Texas and Florida.
Ruff, who publishes “The Ruff Times” newsletter and is author of the 1978 bestseller “How to Prosper During the Coming Bad Years,” said in a release that he is prepared to invest his own money in FundAmerica if necessary.
The value of the proposed transaction, which FundAmerica said in a statement could be completed in two to four weeks, was not disclosed. Ruff’s partners were also not named.
Irvine-based FundAmerica is struggling to survive following Florida’s raid. The company’s assets were frozen last week after a FundAmerica investor filed a $150-million class-action lawsuit in San Francisco federal court, charging the company with fraud and racketeering.
Some of the company’s 100,000 members reported that they are no longer getting checks for bringing in new members. To many, the company’s problems are threatening its survival.
“He (Ruff) doesn’t agree,” said Michael Baybak, a Ruff spokesman. “It’s evident a new slate and a new ownership is coming in. There is a wholesale transition here.”
FundAmerica also said Monday that board member William Dexter resigned and was replaced by Mitchell Blumberg, a Houston real estate developer.
Ruff is the lastest well-known name to be attached to FundAmerica.
Arthur Laffer, noted supply-side economist and adviser to former President Ronald Reagan, resigned from FundAmerica’s board last week following revelations that Edwards had allegedly operated pyramid schemes on three continents.
Ruff, 59, made his reputation in the 1970s predicting a financial apocalypse that never came. At one point, he called on society to horde gold and food to survive the future. Before writing his bestseller, he wrote another book titled “Famine and Survival in America.”
Now, he is a bit more relaxed. This year’s conference for Ruffians in Los Angeles was titled “How to Grow Rich Before You Grow Old.” The Ruff conference--one of the largest annual such events for investors--attracted about 1,500 people in May.
Ruff resides in Mapleton, Utah, and runs the Jefferson Institute, which offers courses on starting part-time businesses.
FundAmerica has been operating since 1986. The company does business in eight states, including California, and took in more than $33 million in the first four months of this year.
FundAmerica officials say the company operates a legitimate multilevel marketing program. The company charges membership fees in exchange for rebates on such things as airline tickets and long-distance phone service.
But Florida regulators charge that the company is a dressed-up version of an age-old scam--the pyramid scheme. They say FundAmerica has no real product and derives all of its revenue from membership fees.
