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Jason Chen's sloppy iPhone breakdown damaged the prototype and may have added vandalism to the list of pending charges against him and other Gizmodo staffers.  (Source: Gawker Assets)
Vandalism and sale of trade secrets are two of the top charges that may be leveled against Gizmodo's staff

Gizmodo/Gawker employees Brian Lam and Jason Chen are embroiled in a mess over the fourth generation iPhone that they purchased and then tore apart.  Lam and Chen contend that the iPhone was merely lost and that they are innocent.  Apple, however reported the phone stolen.

Documents concerning the case and the search of Chen's house have been released in the form of an affidavit pertaining to the search of Chen's home.  The damning summary of the case comes on page 12, which reads:

Suspect Brian Hogan found or stole a prototype iPhone 4G that was accidentally left at a restaurant by Apple employee Robert "Gray" Powell. Hogan identified the owner of the phone as Apple Engineer Gray Powell through the contents of the phone and through Internet searches. Rather than return the prototype phone to Powell and/or Apple, Hogan subsequently sold the iPhone Jason Chen in Fremont for $5000. Upon receiving the stolen property, Chen disassembled the iPhone, thereby causing it to be damaged. Chen created copies of the iPhone prototype in the form of digital images and video, which were subsequently published on the Internet based magazine Gizmodo.com.

It's will be mighty hard for Gizmodo to dispute that, except perhaps for the phone's status being stolen.  However, Apple had reported the lost phone prototype stolen before Gizmodo found it.

Gizmodo's writers appear to have not been truthful about at least one significant detail of the incident.  In their coverage they claimed they bought the prototype for $5,000.  According to multiple accounts the real total was close to $10,000.  Detective Matthew Broad describes in the affidavit an interview with Katherine Martinson, roommate of Brian Hogan, the man who found and sold the phone:

Martinson said Hogan later showed her a camera box that contained $5000.00 in $100 US Treasury Notes. Hogan told her that the money was a result of selling the phone to Jason Chen. Martinson said Hogan told her he has received a total of $8500.00 the sale of the phone, but she is not sure of the source of the additional $2500.00. Martinson said Hogan also told her that he will receive a cash bonus from Gizmodo.com in July if and when Apple makes an official product announcement regarding the new iPhone.

(Note: There seem to be some discrepancies in Detective Broad's numbers, he probably meant $5,000 and $7,500; not $5,000 and $8,500.  The take home message, though, appears to be that Gizmodo paid more than the $5,000 they claimed.)

The affidavit also reveals:

Martinson said she and other friends attempted to talk Hogan out of selling the iPhone prototype on the basis that the sale would ruin the career of Robert "Gray" Powell (Apple engineer who lost the phone). Hogan's response to her was that it, "Sucks for him. He lost his phone. Shouldn't have lost his phone."

It also reveals that Hogan had an accomplice -- his roommate Thomas Warner.  Warner, who has a misdemeanor history, helped Hogan try to destroy evidence of the phone.  States the report:

Based upon the fact that Warner directly assisted Hogan with the removal and concealment of evidence directly related to this case, I believe it is highly likely that Warner was involved and or conspired with Hogan in the negotiation and subsequent sale of the prototype iPhone and that his efforts to conceal and or destroy the evidence as an indication of his consciousness of guilt. I also know that cellular devices like BlackBerries and iPhones function as small computing devices and that they maintain large quantities of data which include, but are not limited to call logs, email communications, system logs, GPS logs, text messages, applications, and Internet browsing history. Additionally, based upon my training and experience, I know that continued use of the devices can result in the deletion of data and or potential evidence on the phone.  Therefore, I seized the items as evidence.

Unfortunately, Warner and Hogan's attempts to hide or destroy the evidence were largely for naught, as the pair apparently had a change of heart and directed police to the evidence they had ditched.  The ditched items include stickers that identify the phone as an Apple prototype, a camera memory card, a USB memory stick, and a computer.

The affidavit also contains part of the email exchange between Brian Lam and Steve Jobs, in which Lam demands a letter of authenticity for the phone's safe return.  Jobs complied with the demand, according to the affidavit.

The affidavit indicates that Chen and/or others at 
Gizmodo will likely be charged with receiving stolen property, vandalizing private property, and sale of trade secrets.  Even if they can escape the claim that they bought stolen property, they will be particularly hard pressed to fight the vandalism charge, as it is obvious they damaged the expensive prototype.

The seller Hogan may be charged with felony theft and or sale of trade secrets as well.  And his friend Warner may be charged as an accomplice to these actions  They may find it hard to prove their innocence, given the fact that they tried to destroy evidence of their actions.



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RE: <no subject>
By icanhascpu on 5/15/2010 2:38:50 PM , Rating: -1
It seems absurd to you because you have no idea what its like to be in a business like Apple , Microsoft, Samsung, and any other hardware/software industry where products that are being developed have years worth of man hours go into the the production of. That is a lot of investment being dented when someone tries to steal and then take images of said product. The images themselves are worthless, it is what is being lost. Images like that basically give a free head start to competitors, but the issue is, it is giving them that insight BEFORE said product even has a chance to put it on the market.

Everyone that uprated you should be ashamed. You all talk about fairness, yet when it comes to apple, because you dont like their methods you toss your own ideals out the door. Who looses here? Becuse Apple will still make a killing off their new iphone, and the rest of you will be just as bad as the apple zealots.


"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer














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