Unreleased iPhone trafficked in Menlo Starbucks

Two charged with misappropriation of lost property

A deal consummated at the Starbucks coffee shop at 3590 Alameda de las Pulgas in unincorporated Menlo Park has resulted in misdemeanor charges against for Brian Hogan, 22, of Redwood City who allegedly found an unreleased version of a next-generation Apple iPhone, and Sage Wallower, 28, of Emeryville, who allegedly helped arrange its sale for a reported $5,000.

The men found the phone in the Gourmet Haus Staudt restaurant on Broadway in Redwood City on March 18, 2010, prosecutors said. "They realized fairly quickly what it was that they had," San Mateo County District Attorney Steve Wagstaffe said in an interview.

Each man is charged with one count of misappropriation of lost property, prosecutors said. Mr. Wallower is also charged with one count of possession of stolen property.

A misdemeanor conviction could mean a year in jail. "A lot will depend on their attitude," Mr. Wagstaffe said. "Generally, people don't go to jail (for something like this)." An arraignment in Superior Court is set for 9 a.m. Thursday, Aug. 25.

Not being charged in the case, prosecutors said, is Jason Chen, who bought the phone. At the time, Mr. Chen was an editor at, which published details of the phone's capabilities to the consternation of Apple Inc., which was instrumental in alerting authorities to the loss of the phone.

To charge Mr. Chen, Mr. Wagstaffe said, prosecutors would have had to prove a) that he is not a journalist as defined by the state's "shield" law, which protects a journalist from revealing sources for stories; and b) that he was knowingly in receipt of stolen property.

"The shield law is not conclusive that he is practicing as a journalist," Mr. Wagstaffe said. The big question, he added, is whether online commentators such as bloggers are in the same category as reporters writing news stories with the oversight of editors in actual newsrooms.

"The shield law has not caught up with the modern world," he said. "Even if we could prove (that Mr. Chen is not a journalist), there is the stolen property issue."

Bay City News Service contributed to this report.

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