According to The Register:
An eagle-eyed Wal-Mart clerk in Caro, Michigan may have foiled a dastardly terrorist plot simply by alerting police to a suspicious purchase made by three men of Middle-Eastern descent, the Associated Press reports. Police are holding the men on terror charges because they bought 80 pre-paid cell phones in violation of Wal-Mart policy, which limits to three the number of phones one can buy....In the van the men were driving, police found an alarming cache of nearly 1,000 cell phones, which "can be used as detonators....Adham Abdelhamid Othman, Louai Abdelhamied Othman, and Maruan Awad Muhareb now face felony charges of collecting material to support terrorist acts and surveillance of a vulnerable target with intent to commit terrorism.
The story describes how such phones are sometimes purchased in large lots and then stripped of their prepurchased air time (which is worth more than the phone) for resale at a profit and how terrorists have probably been trained to use that scheme as their excuse if they get caught with a cache of phones.
By the way, this isn't the first time this has happened. Practically the same thing happened in Southern California last December. Regardless of which reason it is (terrorism or funky reselling scheme), it seems like the downsides of allowing pre-paid cell phones far outweigh any benefits. I'm not saying that eliminating them is a silver bullet to the problems that cell phones can cause. There are obviously lots of ways terrorists can lay their hands on cell phones. But why make it easy? I don't know why, but his makes me think of how the courts put 321 Studios out of business for publishing DVD copying software (as if the courts can keep a lid on that sort of software). If we're that worried about copyrights that we can put a company out of business, how about national security?