Let me post the timeline of events, and some other information, so that everyone is clear that the guy who sold the prototype did NOT try and get it back to the original owner... which seems to something people are saying to justify the sale as legal. A couple side notes: the guy shopped it to Engadget first, and the fact that it was found in a bar and taken home (stolen) was part of their story (just a photo of it) which broke before Gizmodo's. Also, here is the statute in case anyone is curious: So, to be clear, California law states that the guy should have turned it over to police. The fact that he sold it for $5000 means that he knew it was worth more than $100. By law, it was stolen. That is a fact. Here is the Timeline: 1. He finds the iPhone on a bar seat. 2. He looks at the guys Facebook profile and other information on the phone while he is at the bar. 2. He wakes up next morning to a bricked iPhone that won't turn on. (i.e. the facebook profile is no longer visible) 3. He sells it to Gizmodo. He also tells Gizmodo the name he saw on the facebook profile, obviously the guy who lost it. Bottom Line: He knew the name of the owner of the device within minutes of getting his hands on it in the bar. He knew the guy had a facebook. He never tried to contact the guy, which would have been as easy as a facebook search. He says he tried to contact Apple... perhaps he did to legally cover his ass (he says there was a ticket created, who knows). To be sure, the guy wanted Apple to not take it seriously. If he wanted to return it, he would have done what ANY OTHER person with honest intentions would have done and tracked the guy down on facebook. Now... let's talk about Gizmodo. They say they didn't know the device was stolen when they bought it. (They say they didn't know it was real, now that they know it is they will return it.) It doesn't matter whether it was real. They knew that the phone they were purchasing was found in a bar, and taken home. Taking something home you find in a bar is legally classified as theft. Whether it was an iphone 3GS, a japanese fake, or an original brick phone from the 80's... they knew that they were buying something that was taken unlawfully from a bar. Aka, they knew they were purchasing something that was stolen. Has absolutely no relevance whether it was fake or real. At this point, they know the name of the guy who lost it... and scope out his facebook, twitter, etc... and make no attempt to contact him. Even though they were on his Facebook page, and could have hit Send Message quite easily. Instead they start writing a story about how the guy lost the phone. They then tore it apart and saw all of the Apple Stamped Internals, and got to the "Plug into iTunes" screen. Now they knew it was real. They then proceeded to post the trade secrets they had more than a "Reason to believe" were Apple's. Any rational human being can see that Gizmodo is in DEEP, DEEP ****... as they should be.