Scott Kliger, the founder of free411.com defrauded a company I used to work with and our investors of $50K by agreeing to develop some technology for us and then trying to pass off open source code as the deliverable. Meanwhile, he used the funds to build free411.
I don't think he'd dispute it. He gave the money back eventually, but after he'd developed his product and obtained investor funding for it. Unfortunately our project lost a fair bit of traction and our investors lost confidence.
