On Thursday, Gizmodo was let off the hook for last year's iPhone shenanigans. The two men who tried to sell the iPhone to Gizmodo (and others) are not so lucky.

The San Mateo District Attorney's office stated: “After a consideration of all of the evidence, it was determined that no charges would be filed against employees of Gizmodo” for the company's role in purchasing (and publishing a story about ) a then-unreleased iPhone prototype.

However, District attorney Stephen Wagstaffe has confirmed that Brian J. Hogan and Sage Wallower are still going to be charged with misappropriation and/ or possession of stolen property...not exactly the "theft" that Apple had originally claimed.

In April of last year, the world got an eagerly awaited first glimpse of the iPhone 4 in a Gizmodo story entitled "This is Apple's Next iPhone". The story behind the leak was tantalizing: apparently Gray Powell, an Apple Software Engineer working on the calling part of the iPhone 4 project, accidentally left behind his disguised prototype after testing it (while celebrating his birthday) at the Gourmet Haus Staudt, a popular beer garden in Redwood City, California.

The phone was found by Hogan, who asked his fellow bar patrons if anyone had lost the phone. With no success, Hogan attempted to get some info from the phone itself, and briefly saw the owner's Facebook page before the device shut down completely, "bricked" remotely as an automatic security measure.

Details begin to get slightly fuzzy at this point, but at least one other person became involved with Hogan, including Wallower, a Berkeley student and former Navy cryptologic technician. Wallower possibly tried to contact Apple to let them know the two were in possession of lost property, and definitely began contacting various tech-related media companies, including Gizmodo, who paid $5,000 cash for the prototype.

Apple's response to the situation, and especially their undue influence upon law enforcement, was widely criticized when the home of Gizmodo's Jason Chen was raided. Despite the existence of laws requiring subpoenas and generally protecting members of the press from revealing sources, a basic warrant was all that allowed the police to seized computers and other equipment belonging to Chen.


James Lee Phillips is a Senior Writer & Research Analyst for IBG.com. With offices in Dallas, Las Vegas, and New York, & London, IBG is quickly becoming the leading expert in Internet Marketing, Local Search, SEO, Website Development and Reputation Management. More information can be found at www.ibg.com. The Barrett-Group offers executives unique and effective executive career search and career management services. Their fee-based boutique consultancy executive firm works for you, leading the way in executive career search and delivering proven results time after time.