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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

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 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: So much for that
By rtk on 5/15/2010 2:56:22 PM , Rating: 1
Powell did not forget where he left the phone.
He forgot it in the first place, and the phone was eventually returned to the proper owners without police involvement, there was no theft.

He returned to retrieve it -- just as one would retrieve a parked car -- only to find it had been taken.
To start with, consciously parking a car and forgetting/dropping a phone are not analogous.

Oh, there will be a trial in this case, unless Hogan plea bargains...which he would be wise to do, given the enormity of the evidence against him.
Might want to save the predictions until someone is actually charged with a crime here.

Had the thief been unwise enough to post details of this theft online, I'm sure they would have raided his home as fact, I would have insisted upon it.
"Wallet found in the area of <whatever location>, if you can confirm it's yours, come and get it."

The fact you think you can "insist" on a raid of a home shows just how little you understand about law.

RE: So much for that
By porkpie on 5/15/2010 4:00:00 PM , Rating: 1
"He forgot it in the first place,"

So? If you believe that changes anything, I suggest you visit your local law library.

" the phone was eventually returned to the proper owners without police involvement"

It was returned intentionally damaged, and with its most valuable component -- the trade secrets -- removed. If you think Gizmodo returning an empty shell changes anything, I again refer you to the law.

You can whine and cry about this situation all you wish, but the fact remains that more than one law was broken. Apple may have billions of dollars, but they're still entitled to the same protection of personal property that you and I are.

"The fact you think you can "insist" on a raid of a home"

If you're ever involved in such a situation, you'll find you most certainly can. While no amount of insisting will induce the police to seek a warrant without proper evidence, if that evidence exists, and a lazy investigator doesn't take action, citizen involvement been known to swing the pendulum.

Luckily that wasn't necessary here. Apple didn't need to insist; the police came on their own, invited by the suspect's own roommate.

RE: So much for that
By rtk on 5/15/2010 6:41:59 PM , Rating: 1
So? If you believe that changes anything, I suggest you visit your local law library.
So, feel free to show me anywhere where there's a law that gives you the right to set an object down anywhere, leave and return at any point in the future to find the object exactly where you left it. The device was returned to it's owner.

It was returned intentionally damaged
Damage to what, the finish on the screws? If I find a wallet, I open it to determine who owns it. It was returned in the same condition it was found.

and with its most valuable component -- the trade secrets -- removed.
Nothing was removed, all internal components were in place, and the only empty shell here is your logic.

the fact remains that more than one law was broken.
Yet weeks later, not a single charge has been laid. Whatchya think they're waiting for?

Apple may have billions of dollars, but they're still entitled to the same protection of personal property that you and I are.
You've got it exactly backwards. Increasingly, it's looking like because of Apple's billions of dollars, they were awarded powers and protection completely out of line with what any other entity would have been given.

RE: So much for that
By bobny1 on 5/15/2010 8:50:53 PM , Rating: 1
What is wrong with the legal system?. If there is anyone to blame it should be Apple. How can anyone in their right mind can explain the fact that such a top secret device that can potentially generate billions of dollars for Apple can end up in a bathroom floor of a local bar. I believe there is much more to the story that they are trying to coverup. I won't be surprise they want to blame the Taliban..LOL

RE: So much for that
By LRonaldHubbs on 5/16/2010 11:44:50 AM , Rating: 1
Congratulations, you have absolutely no idea what you are talking about. You've yet to make a single sensible post on this article. Just thought I'd let you know, since I certainly am not going to waste my time rebutting your posts.

RE: So much for that
By sigilscience on 5/17/2010 8:15:30 AM , Rating: 1
You have to remember these are the same idiots who honestly believed this guy made an honest attempt to return the phone to Apple

RE: So much for that
By beerhound on 5/16/2010 12:07:09 PM , Rating: 2
rtk: "He forgot it in the first place, and the phone was eventually returned to the proper owners without police involvement, there was no theft.

California penal code:

"One who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft."

The guy found a phone and sold it rather than return it. I'd say that fits the above description.

Forget Apple's initial denial of ownership. Based on the $5000 deal they struck, the guy and Gizmodo obviously knew what they had. If you don't believe Apple when they say it isn't theirs, then you knowingly sold Apple's property. If you do take them at their word, then all you have done is determine who it doesn't belong to. You still haven't met the requirements of the California law.

RE: So much for that
By beerhound on 5/16/2010 12:14:56 PM , Rating: 2
To add a bit more info:

California law regulates what you can do when you find lost property in the state. Section 2080 of the Civil Code provides that any person who finds and takes charge of a lost item acts as "a depositary for the owner." If the true owner is known, the finder must notify him/her/it within a reasonable time and "make restitution without compensation, except a reasonable charge for saving and taking care of the property." Id. § 2080. If the true owner is not known and the item is worth more than $100, then the finder has a duty to turn it over to the local police department within a reasonable time. Id. § 2080.1. The owner then has 90 days to claim the property. Id. § 2080.2. If the true owner fails to do so and the property is worth more than $250, then the police publish a notice, and 7 days after that ownership of the property vests in the person who found it, with certain exceptions. Id. § 2080.3.

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