A friend of mine was working for a company that decided to put on a run in Southern California. They advertised it and opened registration well before the permits were filed. Seems like the RD really didn't think it would be very hard to put on a 12k through city streets, and filed the permits something like 2 months before the race. Got back a "no" and changed the course to a couple loops plus some sections on paths. Got back another "no" and changed the course to I believe it was 6 loops plus some sections on paths. Thankfully that was a "no" too (can you imagine lapping people five times in a race, or trying to organize the logistics of such a thing?) and they ended up cancelling the race a week or two before the date.
I don't think many people registered for that one (the RD was probably expecting at least 5000 people) and I'm pretty sure everyone got their money back. Point is this RD, probably a hobbyjogger from upper management, was not trying to scam anyone--he was just completely oblivious about putting on a race.