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Wednesday, April 21, 2010, 06:55 am PT (09:55 am ET)

Apple engineer frantically searched for lost prototype iPhone

The person who found a prototype iPhone at a California bar did not notify the owners of the establishment or contact the Redwood City Police Department after obtaining the device, according to a new report.

While a previous report from Gizmodo said the person who found the device attempted to return it directly to Apple, the finder never contacted the owner of the Gourmet Haus Staudt bar, nor the local authorities, according to Jeff Bercovici of Daily Finance. Both Volcker Staudt, owner of the bar, and Sgt. Dan Mulholland of the Redwood City Police Department said they were not informed of the device.

Staudt told Bercovici that the Apple engineer who allegedly left the prototype iPhone at his bar "called constantly trying to retrieve it."

"The guy was pretty hectic about it," Volcker reportedly told Daily Finance. He questioned why the person who found the phone didn't bring it back to the bar, suggesting that was the simplest option to return the device to its rightful owner.

Bercovici also noted that Apple did not report the device as lost or stolen to the local police department. Apple did not respond to a request for comment.

The editorial was later updated to express the opinion that Gawker Media, which paid $5,000 to obtain the device, "subsidized a crime." Paul J. Wallin, of the California law firm Wallin & Klaritch, said the burden was with Gawker Media, parent company of Gizmodo, to determine whether the device was legally obtained.

Gawker founder and owner Nick Denton responded by stating that his company was not sure the device was created by Apple until they opened it up and found the company's name on some of its internal parts. Earlier this week, Denton bragged via his Twitter account that his company is willing to pay for exclusives. "We'll do anything for a story," he wrote. "Our only obligation is to our readers."

Gizmodo allegedly returned the device to Apple after the Cupertino, Calif., company formally requested it this week. The website published the letter received from Bruce Sewell, senior vice president and general counsel, and responded by saying the device was "burning a hole" in their pockets.