Gizmodo has been slyly bending the truth concerning the legality of it’s acquisition of the “4G” iPhone, and could find itself in hot water over it. More information coming to light puts greater doubt on how legit the process was from start to finish.

First, there was the person who “found” the iPhone. He claims that he asked around and waited and waited for the owner to come back, but he never did. But he apparently did not say a thing to anyone who worked at the bar.

He claimed that the following day, after discovering that it was a prototype iPhone, he called “a lot of Apple numbers” but Apple displayed a lack of interest and he eventually was given a ticket number which was never followed up on.

I don’t buy it, and neither do a lot of people hearing this story. When you find a lost item and want to be honest about returning it, there are steps you take. Asking other patrons, hanging out for a while longer, and then making calls to a generic switchboard do not qualify, especially if your next step is to sell the item in question.

First thing, if you find a lost cell phone–any lost cell phone–you don’t just walk off with it. You give it to the people running the place where it was left. This is just a no-brainer–it’s the first place the person who lost it would look. If you suspect the staff would just steal it themselves, then give it to a manager. It’s actually less trouble than taking it home and trying to honestly return it after that. But if you feel it improper to give it to anyone at the bar, then you give the people at the bar your contact info so when the owner shows up, he can get in touch with you.

If you don’t mind invading the guy’s privacy, then you could check for his ID within the phone. The guy who found the iPhone said that he discovered the phone’s Facebook app and found the owner’s identity. From there, you would open contacts and get the owner’s contact info, and just call him up right there on the spot. The finder did none of that; he snooped, but did not use what he found to get in touch with the guy.

But the claim is that this guy was really drunk and was not sober enough to think straight until the next day, and by that time, the phone had been remote-wiped. Fine. The next step is clear. If you still think the bar is a nest of thieves and you don’t even feel like calling the manager and asking if the owner has been in touch–and the owner had been, frantically–then you either find the owner or turn it in to the police.

This guy claims he called Apple several times in different ways but got disinterest, just some support person giving him a ticket number. Bull. You call up Apple and say, “Hey, one of your employees, here’s his name, lost what looks like a next-generation iPhone prototype in a bar last night,” and I guarantee you’ll get interest. On the outside chance that you get a dumb support person who doesn’t, then you should realize that you need to talk to someone who is not a rank-and-file employee. Simple: ask for a supervisor, or even better, ask for a number of an executive. There’s no law against calling someone directly in administration. Again, I doubt that any of this was part of the “a lot of numbers” the guy called at Apple. They story simply doesn’t wash; I bet that were I to make an actual effort, I could have found an interested party within minutes.

But let’s assume the guy who “found” the iPhone was a complete idiot. Fine. Even idiots know that you return hopelessly lost items to the police. End of story. No excuses.

This all takes me back to a time when I was quasi-robbed myself. I was carrying a shodo (calligraphy) set with me at college, one I had picked up in Japan. The set itself was not too valuable, but inside I had a marble hanko which was given to me as a gift and had great sentimental value–worthless to anyone else. I had accidentally left it on the ground outside a classroom on the way to the parking lot. Just a few minutes later, I realized I had left it, ran back, and found it gone. After a week or two, with nothing turned in to lost & found or the campus police, I put an ad in the school newspaper offering a reward–and the “finder” immediately called to claim the money. He claimed that he found the case and wanted to “make sure no one would steal it,” but then didn’t get around to turning it in–but coincidentally just happened to be keeping a sharp eye out for anyone putting ads in the school newspaper offering a reward. Riiight.

Next, we have Gizmodo’s claims that when they bought it, they did not know that it was stolen. Also BS. They had to at least suspect it, else they would never fork over $5000 for it. No way they would pay five large for anything they figured was just a counterfeit iPhone. The fact that they paid as much for it as they did is direct evidence that they believed it was Apple’s property. They claim that it took them at least a week to convince themselves that this was the real thing. So, if I am good with tools and can make a semi-convincing mock-up of an iPhone, Gizmodo will pay me five grand for it before having strong confidence that it’s real? Yeah, right. Gizmodo’s claim of innocence in purchasing the phone doesn’t even come close to passing the smell test.

Then there’s the Rolex principle: if you are offered what you believe might be an authentic Rolex watch in a back alley for fifty bucks, you can’t claim you didn’t know it was stolen. Gizmodo at the very least suspected that this was an Apple prototype, which means that even if they had reason to believe that an Apple employee was selling it to them, it would still not be a legal sale. Furthermore, they did know the story behind how it came to them–hell, they published the story, in detail–and the story clearly shows that the property was not sold by its rightful owner. Case closed.

Even ignoring the illegality of the actual purchase, Gizmodo’s first honest step would have been to either simply hand it over to the police, knowing it was not legally acquired, or to actually contact Apple–they can clearly get someone high up in the organization on the phone–and explain what happened and arrange a meeting where things could be ironed out. They did not. They claimed that they always intended to return the phone if it turned out to be authentic; while this can be believed, the implications are not good for Gizmodo, as it only demonstrates that they indeed suspected the item was stolen when they bought it. Nor does it excuse the fact that they did not return it immediately when they did make that determination.

Instead, they photographed and videotaped the hell out of it, ran huge stories for their considerable profit, and then coyly teased Apple, forcing the company to issue a printed public statement of ownership before handing it over.

While I can’t fault their sense for a scoop, one may indeed fault their legal standing–as well as the guy who picked up the phone and later sold it. Turns out there are laws against selling things that don’t belong to you, as well as laws against buying them. The seller and people at Gizmodo face potential civil and criminal penalties for what they did. Not under the trade secrets law, which requires the owners of the secret to reasonably guard the secret–and losing it in a bar does not reach that standard.

This all could mean as much as a year in the slammer for some folks at Gizmodo, and Apple could claim they have lost millions and sue Gizmodo out of business–and they could win.

Next move, Apple.

Update: The Santa Clara police department is reportedly looking into the incident, trying to determine if a crime was committed. Starting to look not so good for Gizmodo and the guy who thought five thousand bucks would be worth it.