Top Marketing Company owned by Scientologist Erwin Annau and the fraud in Florida, 1998.

The Scandal of washing balls and deceptive advertising.


Top Marketing Company Fraud and the FTC Investigation: A Multi-Level Marketing Scheme Involving Scientologist Erwin Annau.
In 1998, a significant fraud case unraveled in Clearwater, Florida, the headquarters of Scientology, involving a multi-level marketing (MLM) scheme that defrauded consumers. At the center of this scandal were Scientologist Erwin Annau and his company, Top Marketing, alongside Tradenet and individuals like John Collins from American Technologies Group. The scheme, which involved the sale of fraudulent washing balls, attracted the attention of the Federal Trade Commission (FTC), leading to an extensive investigation.

Background: The Rise of MLM and the Birth of Top Marketing
Multi-level marketing (MLM) companies have long been controversial, often blending legitimate business practices with deceptive sales techniques that exploit recruits. MLMs typically involve a hierarchical structure where individuals earn commissions not only from their sales but also from the sales made by those they recruit. While MLMs are not illegal, they are often criticized for resembling pyramid schemes, which are illegal in the United States.

Erwin Annau, a Scientologist and entrepreneur, founded Top Marketing Company, which became embroiled in a fraudulent MLM operation. The company was part of a broader web of companies that operated from Clearwater, a city known for being the spiritual headquarters of the Church of Scientology. At the time, Top Marketing and its affiliates, such as Tradenet and American Technologies Group (ATG), marketed an unusual product—the so-called "washing balls."

The Washing Ball Scam
The washing ball was sold as a revolutionary cleaning product, purported to replace laundry detergent with a simple ball that would clean clothes by releasing non-toxic, eco-friendly ingredients as it was tossed into a washing machine. According to marketing materials, these balls could effectively clean clothing without the need for harsh chemicals, making them a desirable, eco-conscious alternative to traditional detergents.

However, the reality was far from the claims. The washing balls were nothing more than ordinary plastic balls with no significant cleaning properties. The product was being marketed through an aggressive multi-level marketing scheme, which, like many others, relied on the recruitment of new sellers who were promised high commissions and financial success if they could persuade others to buy the product or join the sales force.

The Role of Tradenet and American Technologies Group
Tradenet, a company that was linked to Top Marketing, played a crucial role in facilitating the sale of the fraudulent washing balls. The company operated under the guise of being an online marketplace, but in practice, it was a vehicle for the MLM scheme. They relied on a network of distributors who would recruit others to buy or sell the washing balls, thereby inflating the value of the product and driving further sales.

John Collins, the founder of American Technologies Group, was another participant in the operation. His company was involved in distributing the washing balls and acting as a front for the scheme. The involvement of Collins, who was known for operating in the technology and investment sectors, lent a sense of legitimacy to the operation, making it more appealing to potential recruits.

However, the reality of the business model was far less legitimate. Most participants in the MLM program found themselves at the bottom of the pyramid, unable to recoup their initial investments. The vast majority of profits were being generated through recruitment rather than the actual sale of products.

The FTC Investigation and Legal Action
The FTC, responsible for protecting consumers from fraudulent and deceptive business practices, took notice of the operation in 1998. The agency began investigating Top Marketing, Tradenet, and American Technologies Group for their role in promoting and selling the fraudulent washing balls through an MLM scheme. The investigation uncovered that the companies were making false claims about the effectiveness of the product, while the majority of revenue was coming from the recruitment of new distributors rather than actual product sales.

The FTC found that the businesses were violating consumer protection laws by misleading customers about the benefits of the washing balls and creating an unsustainable recruitment structure. The agency also highlighted that the companies had failed to provide adequate information about the risks involved in joining the MLM, such as the likelihood that recruits would fail to make significant money or even cover their initial expenses.

Ultimately, the FTC sought legal action against the companies and their executives. The case resulted in financial penalties for those involved, and the washing balls were removed from the market. The scandal sent a warning to other MLM operations that engaged in deceptive practices and underscored the risks involved in participating in such schemes.

Scientology's Connection
The involvement of Erwin Annau, a senior Scientologist, raised questions about the intersection of business and religion. While Scientology is a controversial religious movement that has long been criticized for its business practices, it is important to note that the actions of Annau and his companies were not necessarily reflective of the Church of Scientology itself. However, the presence of Scientologists in the leadership of these companies added another layer of intrigue to the case.

It is worth noting that the Church of Scientology itself has faced scrutiny for its own business ventures, which include a variety of real estate holdings and training programs. While there was no direct evidence that the Church sanctioned the fraudulent activities of Annau's businesses, the case highlighted the potential for abuse in organizations tied to high-pressure recruitment and sales tactics.


The 1998 FTC investigation into the Top Marketing Company, Tradenet, and American Technologies Group marked a significant moment in the fight against fraudulent MLM schemes. The washing ball scam was emblematic of the deceptive practices that can thrive in such environments, where the focus on recruitment overshadows the sale of actual products. While Erwin Annau and others involved in the scam faced legal repercussions, the case served as a reminder of the importance of vigilance in consumer protection, especially in industries that rely on MLM structures. It also highlighted the need for regulatory bodies like the FTC to continue monitoring and investigating deceptive practices, particularly in a landscape where high-pressure sales and multi-level marketing can still thrive.