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The people involved in sale of lost iPhone revealed

CNET learns that there were at least three people involved, including a man, 21, allegedly paid by Gizmodo for the device, and another, 27, who allegedly shopped it around.

Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
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Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
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The saga of the lost prototype iPhone started with a 21-year-old Silicon Valley resident who says he regrets not trying harder to find its real owner, according to a published report.

Brian J. Hogan, a 21-year-old resident of Redwood City, Calif., is the person who found the iPhone and was paid by Gizmodo, according to a story published on Thursday by Wired.com.

Hogan's lawyer issued a statement to Wired and said Hogan was in the bar with friends when another patron handed him the phone after finding it on a nearby stool, asked around if anyone owned it, and then left the bar with his friend and the prototype.

Snapshot from Sage Wallower for UC Berkeley student senate advertisement, posted to a currently unavailable Facebook group for Wallower's campaign.

Hogan, however, had help in finding a buyer for the phone. CNET has learned that Sage Robert Wallower, a 27-year-old University of California at Berkeley student, contacted technology sites about what is believed to be Apple's next-generation iPhone. The device was lost by an Apple engineer last month. Police in San Mateo County have said they are investigating the lost phone as a possible theft.

Wired reported that police have interviewed Hogan, but that he has not been charged with a crime and that his attorney said he will cooperate with the investigation.

CNET's sources said Wallower, a former Navy cryptologic technician who transferred to UC Berkeley two years ago, acted as a go-between. CNET has learned that there were at least three people involved: Hogan, Wallower, and someone else connected to the sale. Records indicate that Wallower and Hogan may have attended Santa Barbara City College during the same period.

Wallower, who is listed as a member of Berkeley's class of 2010, says in a LinkedIn profile, currently unavailable, that he previously worked as a computer security officer at the publicly traded Securitas corporation and that he possesses "top-secret clearance."

In an in-person interview with CNET at his home in Oakland on Thursday, Wallower said, "I'm not the person who found it. I didn't see it or touch it in any manner. But I know who found it." He declined to identify anyone else, however, in part because he said conversations with law professors had convinced him that Apple was a "legal juggernaut."

"I need to talk to a lawyer," Wallower said. "I think I have already said too much."

"I need to talk to a lawyer. I think I have already said too much."
--Sage Wallower, student

The aspiring student senator, whose Facebook campaign page appears to have been taken down, has, according to the sources, emerged as one of the central figures in a drama unfolding in a uniquely Silicon Valley way. After Gizmodo published details last week about what it believes was a prototype iPhone, San Mateo County sheriffs raided the home of one of the gadget blog's editors, prompting a debate about whether the warrant complied with California and federal laws curbing newsroom searches. A lawyer for Gizmodo says the gadget blog could sue the sheriff's office.

San Mateo County prosecutors have confirmed that investigators interviewed the person they believe found the prototype in a German beer garden called the Gourmet Haus Straudt.

Stephen Wagstaffe, chief deputy district attorney, declined to confirm whether Hogan was the person who found or sold the iPhone. He did say the felony criminal investigation into possible theft was still going on and that no charges have been filed. "We are still collecting facts," he said.

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. 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.

An Amazon.com list, currently unavailable, that appeared to have been created for Wallower by a friend, suggests gifts including a book on climate change by Al Gore, a Kindle, and--perhaps presciently--a book co-authored by ex-hacker Kevin Mitnick titled "The Art of Intrusion: The Real Stories Behind the Exploits of Hackers, Intruders and Deceivers."

Updated at 4:45 p.m. PDT with edits throughout.