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Scam Artist Duo Nabbed for Selling Non-existent Phones

Arik Klein, who is president of SafeSky Software and has served two prison terms for fraud since 1997.

A man described by a Tel Aviv court in 2003 as a "serial fraud offender" was one of two Israeli business partners arrested by Tel Aviv police yesterday over attempts to secure investments in a disposable cell phone venture, one of several projects that police say are just covers for an elaborate scam that has attracted millions of shekels in investments from businesspeople in Israel and abroad.

Arik Klein, who is president of SafeSky Software and has served two prison terms for fraud since 1997, and Amos Bouchnik, the company's chairman, were arrested on suspicion of forgery and fraud under aggravated circumstances. They will be brought before the Tel Aviv Magistrate's Court today for a remand hearing.

SafeSky says its disposable Talk & Walk cell phone is inexpensive - Klein has told investors it costs only NIS 9 and doesn't need to be insured - comes pre-paid and is made of recyclable materials. It is being marketed as a good fit for "people on the go, tourists, and thrifty spenders who want to save money on their monthly phone bills." Klein has told investors that Nokia has already invested in the project and produced two disposable phones and displayed.

Police say the whole phone enterprise is fraudulent and that none of the products described on the company website actually exist.

This isn't the first time the two have been accused of being scam artists.

In 2009 they announced that a Taiwanese company was paying $370 million for 37 percent ownership of SafeSky's Life Keeper heart monitor patch, marketed as a patch that can warn wearers of an impending heart attack. But the deal turned out to be a hoax that fooled local and foreign businesspeople as well as former Mossad official Hagai Hadas, who served as a director of the company.