There's a bit of a phenomenon in Sydney (possibly elsewhere, I wouldn't know) of companies doing this.

I call them VC-bait or grant-bait. There's a handful of grants you can get for startups here, so they'll get all of those, get some free hosting from Microsoft, put up a landing page etc. If they're lucky they'll get a few tens of thousands from private investors, then fall over a few months later.

I'm not sure if it's intentional or if people are just clueless, but in any case they make a bit of money, pad out the CV a bit and move on. I wouldn't got so far as to say they're defrauding investors