Xenu-City.Net - One City. One Cult.OCCUPIED CLEARWATER
THE TRADENET BLUE BALLS

Blue ball
The MLM scam:
TradeNet's Laundry Solution
"I make it my business to know what's going on with the Church, it's always been my - my - one of my purposes is to be strongly, have a very strong communication line with the Church because my spiritual freedom, your spiritual freedom, her spiritual freedom, their spiritual freedom, these two guys' spiritual freedom and your spiritual freedom is far more important than anything that we're doing and talking about today. It just is. And I would sacrifice this all, I would turn it over right now, I would nuke it, I'd send everybody home, lay off a stick of dynamite, I'd blow away this whole fucking town to save that."

L.W. "Bill" Cooper, TradeNet President
TradeNet board meeting transcript, Aug. 18, 1997
CONTENTS

Cast of Characters
Multi-level marketers and unindicted Snow White conspirators.

TradeNet Documents
Company transcripts and correspondence, obtained from the Florida Attorney General's office.

State Investigations
Documents from the files of the Oregon Department of Justice and the Utah Division of Consumer Protection.

News Articles
Media coverage of the move into Dunedin, and the subsequent fraud investigations.

More Links
TradeNet distributor sites (that STILL haven't been taken offline), American Technologies Group exposed, and a.r.s discussion of Erwin Annau and friends.

What were they laundering?

TradeNet Marketing was a Scientologist-owned and -run multi-level marketing company based in downtown Dunedin, Florida, just minutes north of Scientology's Flag Service Organization. When they moved in, there was a good deal of concerned discussion among the citizenry that perhaps the cult from Clearwater was expanding into Dunedin. The folks at TradeNet were quick to assure everyone that they were just another fine upstanding business, and the religious choice of their executives had nothing to do with the company or its activity.

Months later, the documentation would show otherwise.

TradeNet's cash cow was a fraudulent consumer product called the Laundry Solution, which purportedly harnessed the power of "structured water" to clean clothes without detergent. Marketed as an environment-friendly way to do the laundry, it was simply one of a dozen similar scams at the time. Inevitably, they attracted the attention of various consumer protection departments in several states, including, among others, Oregon, Utah, and Florida.

Certain documents, which had been subpoenaed by the Florida Attorney General's office in Tampa, were discovered by the St. Petersburg Times. The Times found that some of TradeNet's internal business documents contained explicit references to the Church of Scientology and the Flag Service Organization, and mentioned this in a feature article about the cult's activity in Clearwater. That's when the 'Net came into the picture, and the readers of a.r.s followed the course of TradeNet's demise.

According to the Florida Attorney General's office, each of the three principals in TradeNet, Erwin Annau, L.W. "Bill" Cooper, and Alberto Guerrero, donated between $700,000 and $750,000 in laundry ball royalties to the cult of Scientology. There are still outstanding refunds owed to the customers and distributors who were defrauded.
CAST OF CHARACTERS
  • Erwin Annau - President, CEO, and owner of TOP Marketing (the top of the TradeNet pyramid scheme), and one-time Treasurer of TradeNet; former financial advisor for Scientologist artist Gottfried Helnwein; fled to the U.S. when Helnwein's offices were raided by police at the behest of the Austrian Tax Office; declared a "Suppressive Person" by the cult after the TradeNet fiasco was exposed.
  • L.W. "Bill" Cooper - President of TradeNet, and the point person responsible for paying the refunds to defrauded customers and distributors. Now owner of the Largo Spa, where you can get your aromatherapy, manicure, massage, and "power peel" all in one convenient place (but presumably, no laundry balls).
  • Alberto Guerrero - Member of the board of directors; according to TradeWins, the internal newsletter for TradeNet distributors, Guerrero "is responsible for introducing the Laundry Solution to TradeNet".
  • Brian Andrus - Moderator of the infamous board meeting in which Erwin Annau was scapegoated; former Southeast US Secretary of Scientology's Guardian's Office (GO); mentioned in the Stipulation of Evidence in the "Snow White" federal criminal case as the GO agent who held federal witness Michael Meissner captive; one of the GO "unindicted co-conspirators" listed in the excellent GO Roundup.
  • Lynn Irons - CEO of TradeNet for an interim period.
TRADENET DOCUMENTS
  • TradeNet board meeting transcript
    August 18, 1997
    "This, is not a First Dynamic thing. This, is Third Dynamic. When I sat across the table from John Collins and he laid it on the line, he said, 'Bill, I'm pissed at you. You know why I'm pissed at you? Because that - the 100,000 people out there know you're Scientologists. You guys are fucking up' ."
  • Minutes of Teleconference - TradeNet and ATG
    John Collins, ATG, April 25, 1997
    "Dr. Lo has written 3 books on the subjects of physics, quantum mechanics, and mathematics in cartoon form similar to KTL (Key to Life Course). Other books are being written on electricity, Ie crystals, and science."
  • Letter to Lynn Irons
    John Collins, ATG, June 19, 1997
    "We are creating truly credible and effective competition. So expect an attempt to buy you or ATG. They will fail to take you out. They could and may take out others like Quinn and Ansley. TradeNet they will not."
  • Letter to TradeNet Directors
    Penny Fleming, TradeNet Distributor, August 30, 1997
    "If there have been problems with Erwin's ethics, handle them with ethics tech. If there have been problem's with anyone's ethics in TradeNet or ATG or anywhere, handle them with ethics tech. Use your Third Party tech. HANDLE IT."
  • "Knowledge Report" to TradeNet and WISE
    Erwin Annau, November 13, 1997
    "On Oct. 20, 1997 Bill Cooper and I met at the Clearwater Charter Committee in order to sort out the problems of Trade Net having used TOP Marketing's merchant account way over the originally agreed upon time and accumulating serious potential liabilities in terms of potential charge backs."
  • "Knowledge Report" to WISE Charter Committee
    Erwin Annau, December 19, 1997
    "Both investigators wanted to know where my, Cooper's and Guerrero's money went. He wanted to know the extent of the donations. I told him what I donated, but could not give him an answer about the others. They assume that about 1 million dollars went to the church... The investigators wanted to know how they could get the money back from the church and if the church would refund the money."
  • Suppressive Person Declare: Erwin Annau
    CoS International Justice Chief, April 18, 1998
    "Erwin Annau, currently of Clearwater, Florida, and formerly of Austria, is hereby declared a Suppressive Person. Per HCO PL 23 Dec 1968RB, Rev. 8 Jan. 1991, SUPPRESSIVE ACTS, SUPPRESSION OF SCIENTOLOGY AND SCIENTOLOGISTS, a suppressive person is, 'one that actively seeks to suppress or damage Scientology or a Scientologist by suppressive acts.' --LRH."
Excerpt: TradeNet board meeting transcript
Aug. 18, 1997

...

(Erwin) So? I don't necessarily go to jail.

(Bill) No...

(Erwin) There's a xxx possibility.

(Erwin) And just to clear that thing up, because he doesn't understand, you even in the United States have the same law, if you are an IRS audit -in the middle of an IRS audit, you go to another country and you set up another operation there, and you come back to Aus-, to America, and they are - and they think that you owe them money, you go to jail.

(?) Right. Correct.

(Erwin) With no conviction yet, you just go to jail on the grounds that you might leave the country again and never come back.

(?) Sure.

(Erwin) That's the reason. And that is something that anybody can xxxxxx; I've done nothing in Austria that's any grounds for a judge to put me to jail, but they can put me to jail just merely on the fact that I might go abroad again and never come back.

(?) Actually I didn't know that.

(Erwin) OK.

(Bill) That is a factor. So I see that as senior; and that, that - even that isn't the most senior thing, because I happen to know, because I just- I make it my business to know what's going on with the Church xxx, it's always been my - my - one of my purposes is to be strongly, have a very strong communication line with the Church because my spiritual freedom, your spiritual freedom, her spiritual freedom, their spiritual freedom, these two guys' spiritual freedom and your spiritual freedom is far more important than anything that we're doing and talking about today. It just is. And I would sacrifice this all, I would turn it over right now, I would nuke it, I'd send everybody home, lay off a stick of dynamite, I'd blow away this whole fucking town to save that. And right now I happen to know that your future, your spiritual future, is on the line here. Make no mistake. I mean, I just keep my ear to the ground and I just listen to what's going on, you know, and when I go to these business meetings and they pull me aside and they say, "What's going on with Erwin? Where the fuck is he? How come he's not doing his thing? He didn't desert us, heh heh?" And I'm like...

(Erwin) What business meeting?

(Bill) It's the downtown business meeting, that volunteer thing that we signed up for. And of course OSA's there and then Ben Shaw takes us...

(Erwin) ...two weeks? Because I was on tour.

(Bill) I know that. They weren't asking about that. They were asking about your OSA program, you know, and, and because I know you and I know how you operate, you know, I have no doubt, I have absolutely no doubt that the statement that Brian says is absolutely true. And if he gets declared, guess what, can't talk to him. If you do, you get declared. And I think it's dangerous. I really think that's a danger. Not only that, if you get declared, I can't talk to you, you know, so there's that. I mean, all the rest of this, is just, I mean, we don't need to talk about anything else. If you guys get deported, I'm going to feel like shit, because I didn't do something about it, you know. We can help you and I have absolutely zero animosity, as a matter of fact, Erwin, I'm probably your best friend on this planet. I have - my ARC is not demoted at all, I completely understand where you're at, I understand how you operate; sometimes I find it amusing, sometimes I admire it, but it's perfectly irrelevant. This, is not a First Dynamic thing. This, is Third Dynamic. When I sat across the table from John Collins and he laid it on the line, he said, 'Bill, I'm pissed at you. You know why I'm pissed at you? Because that - the 100,000 people out there know you're Scientologists. You guys are fucking up."...

THE UNIVERSITY OF UTAH

February 26, 1997

Robert J. Meier, Investigator
State of Utah
Department of Commerce
Division of Consumer Protection
160 East 300 South
Box 146704
Salt Lake City, Utah 84114-6704

Subject: Evaluation of Claims for "The Laundry Solution"

Dear Robert,

We have evaluated the following two claims of the manufacturer of "The Laundry Solution":

  1. "It forces the dirt to leave the fabric because dirt is positively charged and 'the Laundry Solution' is negatively charged, thus creating an electronic release of dirt."

  2. "[the Laundry Solution] is Structured water that emits far-infrared electro magnetic waves through the walls of the container into your laundry water."

With regard to the first claim, the charge on the nylene ball was measured using an electrometer. Under humid conditions or with a film of water present, no measurable charge was observed (charge less than 100 femto-Coulombs [fC] or 10-13 Coulombs). In dry air the ball could be charged, either positively or negatively, by rubbing with an appropriate substance. Since, in a washing machine the ball operates under water, there is no evidence that significant electrical charge, either positive or negative, is present on the ball during use.

With regard to the second claim, the emission of far infrared radiation was measured using a grating spectrometer and a fourier transform infrared spectrometer from visible wavelengths (0.6 micrometers [µm] to 100 µm). The nylene ball emits no infrared or far infrared radiation other than that which all bodies in the universe do at the same temperature. [All bodies in the universe emit radiation called black body radiation. The spectrum of black body radiation is completely determined by the temperature of the body. For bodies at about 70° Fahrenheit (300 Kelvin), the peak intensity of this radiation is at about 10 µm wavelength.] Over the range from about 3 to 30 µm, the measured infrared radiation from the ball corresponds to a temperature increase of less than 0.5 K above an ambient temperature of 300 K.

Sincerely,

P. Craig Taylor
Professor and Chair

Department of Physics
201 James Fletcher Building
Salt Lake City, Utah 84112
STATE INVESTIGATIONS
  • AG Warns Laundry Globe Distributors To Stop Selling Products In Oregon
    Oregon Dept. of Justice, Nov. 12, 1997
    "Upon hearing the marketing claims, the Department of Justice obtained the various products and had them tested by a qualified, independent laboratory. Results of the tests indicated that the water in the spheres had no special characteristics. The 'globe products' essentially contain nothing more than water, blue dye and a foaming additive contained within an impermeable plastic shell. The Department therefore concluded that the products do not constitute nor create a detergent substitute."
  • Blue Ball Affidavit
    Dr. Andrew W. Blackwood, Oct. 28, 1997
    "Any claim that the container can both isolate the water and permit the emission of an electric field, as claimed in some of the promotional materials, conflicts with basic scientific principles, including the laws of thermodynamics and the conventional understanding of electricity."
  • Assurances of Voluntary Compliance
    Circuit Court of Oregon, Nov. 12, 1997

    TradeNet Marketing, Inc. and L.W. Cooper
    "Based on scientific analysis and test results obtained from qualified independent laboratory, the Department finds that each respondent knew or should have known that in truth and in fact, the product claims described in paragraph 9, 10, 11 and 12 are false; that the publications and test results contained in the booklets described in paragraph do not substantiate them; and that 'IE crystals' or 'structures' do not constitute or create detergent substitute, enhance detergent action or improve gas mileage or automotive engine performance."

    TOP Marketing Business Consulting, Inc. and Erwin Annau
    "TOP developed TradeNet's marketing, promotional and training plans and produced promotional materials regarding characteristics, ingredients, uses and benefits of the TLS Globe which TOP and Annau disseminated in Oregon to Oregon residents. TOP is a founding distributor of TradeNet products and has also distributed the TLS Globe to Oregon residents."

    American Technologies Group, Inc.
    "The Department has caused scientific analysis and testing to be performed on the products promoted as containing IE crystal DOJ believes that the claims made by the marketers of the products, including TradeNet, were not true."

  • Consumer Protection Says Laundry Ball Claims Don't Wash
    Utah Division of Consumer Protection
    "The tests from San Rafael determined that the liquid inside the ball was blue colored water and was not 'structured' in any way different from ordinary water. Based on their results of the tests, Consumer Protection charged that the claims made by TradeNet were in violation of the Consumer Sales Practices Act."
  • Laundry Ball makers pay $10,000 settlement
    Utah Division of Consumer Protection
    "TradeNet Marketing, Inc., charged by the Utah Division of Consumer Protection with violating the Utah Consumer Sales Practices Act regarding claims about a 'laundry ball' cleaning product, has agreed to pay a $10,000 settlement and provide refunds to dissatisfied Utah customers."
NEWS ARTICLES
  • New business
    St. Petersburg Times    , Jan. 24, 1999
    Bill and Jen Cooper have opened Largo Spa at 1679 Indian Rocks Road, Largo, offering everything from facials to "power peels" used to fight brown spots, acne scars and other skin discolorations.
  • Ocean Optics has new site
    St. Petersburg Times, Mar. 20, 1998
    "TradeNet bought the building in July for $1-million. At that time, some Dunedin merchants expressed concern about the company's ties to the Church of Scientology. Some said they were afraid Dunedin would start seeing the uniformed church staffers who have had such a presence in downtown Clearwater, where the church has its spiritual headquarters."
  • Troubled firms headquarters is for sale
    St. Petersburg Times, Feb. 22, 1998
    "When TradeNet arrived in downtown, some in Dunedin expressed concern that the company's ties to the Church of Scientology would lead to a church expansion into downtown Dunedin."
  • Oregon says laundry ball a wash
    www.fraud.org, Dec. 9, 1997
    "TradeNet Marketing, Inc., and TOP Business Consultants, Inc., the Florida based manufacturers and marketers of a supposed laundry detergent alternative known as The Laundry Solution, Globe or SuperGlobe, have agreed to stop marketing their product in the state of Oregon and to pay the Oregon Department of Justice $190,000, $65,000 of which will be used for consumer refunds. A third company,     American Technologies Group, Inc., of California, will also pay $20,000 for its role as a supplier of TradeNet."
  • State investigating sales of laundry ball
    St. Petersburg Times, July 29, 1997
    "The Florida Attorney General's Office issued a subpoena Friday asking for a number of TradeNet documents, including papers that would back up the company's claims about its products."
  • Do "laundry balls" that supposedly replace detergent really work?
    The Straight Dope, July 25, 1997
    "Laundry balls/disks allegedly eliminate or greatly reduce the need for conventional laundry detergents. You get different stories about how they work, including a lot of hokum about 'structured water' and 'nanotricity' and whatnot, none of which makes much sense."
  • Scientology says it isn't moving into Dunedin
    St. Petersburg Times, March 12, 1997
    "It has been brought up at gatherings for weeks - at Mardi Gras, at a chamber mixer, at the morning coffee klatch, at a Kiwanis Club breakfast. Then there have been phone calls to City Hall and the newspaper. People want to know: Is the three-story building in the heart of downtown being bought by Scientologists?"
MORE LINKS
  • TradeNet/TOP - CW-Scientology company in serious legal trouble
    Martin Ottman, alt.religion.scientology, Jan. 22, 1998
    "TradeNet sold millions of a complete useless laundry detergent (blue coloured water) last year and made big bucks at the beginning. The Scientologists who own the company donated then huge sums to the Church of Scientology and WISE."
  • "The Laundry Solution"
    ChemEd-L Discussion List, Jan. 8 - 10, 1997
    "Isn't pseudoscience entertaining!? What is the size of the globe? If large enough, the only value I can see is the 'modern' equivalent of beating your clothes on a rock!"
  • Random TradeNet Distributor
    " 'The Laundry Solution' causes water molecule clusters to disassociate from each other, allowing much smaller individuel water molcules to penetrate into the innermost parts of the fabric."
Troubled firm's headquarters is for sale

by Thomas C. Tobin
St. Petersburg Times, Feb. 22, 1998

DUNEDIN -- The downtown headquarters of TradeNet Marketing Inc. is for sale, and another Dunedin company is among the possible buyers.

The three-story glass building at 380 Main St. stands out in a downtown known for its quaint storefronts and restaurants.

TradeNet bought the building last summer for $1-million but has since fallen on hard financial times and is under investigation by government agencies in several states, including the Florida Attorney General's Office

One potential buyer is Ocean Optics Inc., which has been shopping around Pinellas County for larger quarters and would like to remain in North Pinellas, said the company's chief operating officer, M. Scott Farris.

Ocean Optics now is headquartered at 1237 Lady Marion Lane in Dunedin. The company manufactures sophisticated miniature spectrometers -- color-sensing machines that have many applications, such as measuring pollution in oil effluent or judging the quality of diamonds.

Ocean Optics reported $6-million in sales last year and has about 30 employees. It plans to keep its plant in Orlando.

Farris said the company is in the preliminary stages of a deal for the TradeNet building and might have more to say in a few weeks. He said company officials are fond of the location, which would allow Ocean Optics' out-of-town customers and distributors to shop and dine in a nice atmosphere while staying at nearby hotels.

When TradeNet arrived in downtown, some in Dunedin expressed concern that the company's ties to the Church of Scientology would lead to a church expansion into downtown Dunedin.

At the time, church officials in Clearwater said they had no such plans. They also noted that TradeNet was run by individual Scientologists, not the church.

According to state records, all TradeNet employees, including non-Scientologists, are required to take courses on the management and ethics principles of L. Ron Hubbard, Scientology's founder. Scientologists say the courses are secular.

In addition, records show, company officials kept church officials in Clearwater abreast of developments at TradeNet. This included the use of "knowledge reports," a method used by Scientologists to keep the church apprised of "hidden suppression, infiltration, subversion or corruption."

In a recent interview with state investigators, company president Leonard W. Cooper said the church is in no way involved in TradeNet's operations. Cooper did not respond to requests for an interview with the Times.

The possible sale of the building comes as the state investigation of TradeNet moves toward a conclusion. According to records, investigators have spent months interviewing former TradeNet employees and logging complaints from TradeNet customers and distributors who say they were denied refunds and commissions.

The company once marketed blue plastic balls that were sold as alternatives to laundry detergent, and a product that was said to improve engine performance in cars.

It has since discontinued those products. Records on file at the Attorney General's Office indicate that investigators want to ensure TradeNet complies with state laws regarding refunds.

TradeNet gave state investigators copies of its "basic training kit," which said the company would remain debt-free and planned to reach $10-million in sales by the end of 1996.

But, according to the transcript of an August meeting of TradeNet officials, Cooper reported that "we've got $2.5-million worth of debts that need to be addressed" and "creditors knocking on our door."

After a down payment of $300,000 on its building, the company was making monthly mortgage payments of $8,475. With other expenses, the monthly outlay on the building was nearly $13,000, Cooper said at the meeting.

Despite about $5,000 in monthly income from other tenants in the building, TradeNet was taking a loss of nearly $8,000 a month.

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