I've come across more than one large capacity USB flash drive recently which is in reality half the memory size or less than it's supposed to be.
The latest one I've come across also had several virusses pre-loaded. It was not name branded and was acquired from a street vendor. It had a sticker on it saying it was supposed to be 8gb and had 2 executables in the root along with an autorun inf file to execute them. Luckily I have autorun disabled on all my machines for exactly this reason and my AV immediately went bezerk begging and pleading to quarantine the contents. One of the executables is scripted primarily as a keylogger, the other I'm not too sure about but it's probably an svchost. The drive has a low level hack applied to it causing it to show as a 8gig capacity on Linux and Windows OS. Windows native disk utilities reformatting or reinitialization makes no difference to it's reported size.
I made a tool adapting a delete program I wrote which makes a file in the root and fills it with asterisks to securely overwrite any residual data on the drive. It picked up that the actual drive size is slightly under 4gb before write failure occurred.
The bottom line is that these flash drives are a security risk as well as an out and out con. Saying that, it actually cost considerably less than a 4 gig stick is generally available for at retail prices so depending how you look at it, it might not be a con.