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As the Storm Troopers trample all over the constitution, somewhere Steve Jobs is smiling: Our thoughts on the “stolen” iPhone.

If you have not been under a rock for the last couple of weeks, you know all the basics of this story, but for our rock dwellers, here are the basics.

1. apple engineer looses iPhone prototype
2. passerby finds phone
3. passerby figures out its a prototype of a new device
4. passerby shops it around.
5. Gawker Media agrees and purchases device
6. Gawker publishes story, contacts apple to return phone
7. Apple accepts phone back
The end…..
8. WTF?????  Prosecutors raid reporters home

Welcome to the police state of California.

This is where we have to start reporting the story. 1-7 could happen to any person and company in this business, even us. Other than step 5 if someone were to give it to us, of course we would write about it, we might be tempted to buy it, but we have a policy against paying for stories.

Where the line was crossed was when the police raided the reporters home.

As the Storm Troopers trample all over the constitution, somewhere Steve Jobs is smiling.

In our opinion, there is no way that this is not a case of Apple manipulating the system. Apple fan boys can scream foul all they want, but try this experiment: call your local police department and report your cell phone stolen, but given back to you after you asked. See if the results are anything like this. There are murderers, rapists, and child molesters walking the streets in every city in the world, and the police are wasting time, effort and money on this issue as well as trampling the constitution.

The constitutional issue here seems pretty clear. The police seized a lot and went way too far. Its as if one person on Yahoo committed a crime and law enforcement shut down Yahoo, confiscated the servers and backups and read EVERYONES correspondence.

That seems extreme, but is exactly what happened here.

An easier analogy is let’s say your neighbor steals a lawnmower, you then borrow your neighbor’s lawnmower, put it in your garage, mow your lawn, and then find out he stole it from the neighbor three doors down and return it to him. Then he decides you didn’t ask his permission first to use it and calls the police and reports it stolen. The police come and clean out your whole house, take your car(s), all your furniture, all your appliances, all your food, all your tools, dishes, silverware etc. and leave you with an empty house, when the only issue was the stolen lawnmower that you returned already.

The police who searched Jason Chen’s home seized the following: A macbook, HP server, two Dell desktop computers, iPad, ThinkPad, two MacBook Pros, IOmega NAS, three external hard drives, and three flash drives. They also seized other storage-containing devices, including two digital cameras and two smart phones.

That seems a bit of overkill for an iPhone. In our opinion, Gizmodo, as sleazy as what they did was, it was not illegal. They under the law had no intent to possess stolen property. Gizmodo’s motive was to obtain information about the upcoming product, not to obtain a cool cell phone to use. The payment was intended to procure that access. Certainly they intended from the start to get the phone, check it out, write about it, and send it back to Apple. Unless a contract surfaces between the seller and Gizmodo, we only have the circumstances to go by. So where is the element of intent necessary to prove the crime of buying stolen property?

Thus, the speed that the San Mateo County DA’s office moved on this is truly astonishing (especially since Chen’s house is in Alameda County, so multiple counties are involved), as is the heavy-handed approach.

Why they took the case which is wrapped in about 200 different civil rights and constitutional issues and of which they only have a marginal jurisdiction over (the phone was lost in Redwood City) is also quite odd. The presence of the specialized computer crime department (REACT), under direction of the tech industry, is also alarming.

Rather than recusing itself, Apple is still on the steering committee of REACT. REACT is obviously the entity supplying the information on high-tech crime to both the DA and San Mateo Sherrif, and will (out of necessity) have to have daily contact with Apple to determine what (if any) the damage of the crime actually is. REACT also looks to be the actual law enforcement entity gathering evidence, though it doesn’t appear to enjoy having the spotlight on this case, and has been shielding itself behind San Mateo County.

Corporations manipulating the law for their interests are as old as the Borgias, but at least Standard Oil would hire private thugs to go smash the presses, not pass the bill to the taxpayer.

This will go down as the most expensive phone in history, and most of the cost will be directly paid by the California taxpayer as this case winds through the courts, perhaps all the way to the Supreme Court, as this plainly touches 1st, 4th, and 5th Amendment issues.

Indirectly, Apple has done itself untold damage by destroying 30 years of marketing itself as the company for the "anti-establishment".

They are connected to REACT, and they had best hope that they didn’t drop a dime on Chen by manipulating the San Mateo DA to act as a warning; "Don’t mess with our IP, or else"!

The San Mateo DA had better be clean too – or Wagstaffe and his boss (James Fox) can start cleaning out their desks, and maybe hiring their own counsel.

There are no good guys in this case, just differing levels of slime. We haven’t commented until now on this case, simply because it was being journalistically covered everywhere and we are not usually in the business of regurgitating the company line. This however has gone way beyond that and into our wheelhouse where not only cool technology is concerned, but Gestapo police state activities, as well as corporate evil.

The scariest thing about all of this is that in the last few weeks, of the big 3 technology companies (Google, Microsoft, and Apple) lately, Microsoft seems to be the least evil company today. I never would have thought that could happen.