"Under a California law dating back to 1872, any person who finds lost property and knows who the owner is likely to be--but 'appropriates such property to his own use'--is guilty of theft. There are no exceptions for journalists. In addition, a second state law says any person who knowingly receives property that has been obtained illegally can be imprisoned for up to one year."
This is the crux of the issue. I'm not sure the phone was actually "lost" either. It may have been lifted. When the identity of the "seller" comes out (police investigation, not from Gizmodo), it will be interesting to the history or background of that person.
No matter what else was done wrong, I do think that bashing in the door in the middle of the night was a bit of overkill. They could have knocked. It is not like the bloggers at Gizmodo are armed and dangerous.
If the charges are true and the receiver of the property is convicted, I think some serious community service time and probation, rather than jail, is warranted in this case.
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