The man behind the $4 smartphone in India has been arrested on allegations of fraud, with some analysts calling the phone a classic ponzi scheme. Mohit Goel introduced the Freedom 251 phone for pre-sale last year in February priced at only 250 rupees, or about $3.70 USD. It was due to be released sometime in June.
The phone’s pre-sale announcement generated a lot of customers, but those customers say that have not received the phones for which they’ve paid. Ayam Enterprises says that it paid 3 million rupees, or about $45,000 USD, after the phone’s creator persuaded them to distribute the cheap phone.
The company says only 1.4 million in devices were delivered to them for distribution and staff working for Ayam Enterprises began to receive death threats when they started asking where the rest of the phones were, or where the money was if the phones couldn’t be delivered in a timely manner.
The arrest has been confirmed by the BBC with police, who say that Mr. Goel will appear in court thanks to several other complaints that have been filed against him from other parts of India. The police say they’re investigating the claims thoroughly for any evidence of a scam. However, the police spokesperson says that technology-related fraud is all too common in the country.
We’ve always doubted the authenticity of these claims since the idea of a $4 smartphone sprang up, so it’s not surprising to see this is the way the story is going. If it sounds too good to be true, it probably is.