For those that don't know the background let me lay it out for you, an Apple employee was drunk in a bar and left his iphone there. Another person there found it and took it home to try and return it the next day. Well the next morning the phone had been remotely wiped and was non-functional. The guy started looking it over and found it a little odd, he discovered that it was in a false case to make it look like an iPhone 3Gs, turns out on inspection it was some sort of iPhone prototype. Well over a two to three week period this guy contacted Apple several times trying to return this obviously important prototype. Apple denied it was theirs and gave him the runaround. So after Apple refused ownership the guy assumed (rightly so) that it was his to do with as he wished, so he contacted Gizmodo and sold it to them for $5000, Gizmodo then took it apart and ran a story on the new iPhone 4G prototype to much applause. Well Apple got PO'd and demanded the device back, Gizmodo complied and gave it to them, but Apple decided they weren't satisfied and called the police to start an investigation on possible receiving stolen goods or even industrial espionage charges. Now the story linked above comes out and the Ca. authorities just screwed up BIG TIME.
This will be a poopstorm, be sure.