Why did Gizmodo escape indictment in IPhone prototype deal?

The greatiPhone prototype caper of 2010 has finally ended, with the two men accused of shopping the device to gadget blogs sentenced to probation yesterday.

Last year's investigation began with a raid on Gizmodo editor Jason Chen's Fremont, Calif., home, followed by a painstaking examination of Chen's electronic files. Investigators suggested at the time that Chen could face criminal charges, and he soon hired a criminal defense attorney.

But San Mateo County District Attorney Steven Wagstaffe told CNET yesterday that there was not enough evidence to indict Chen or anyone else affiliated with Gizmodo.

What we were looking at was possession of stolen property and whether the evidence supported extortion," Wagstaffe said. "You can say we were looking at whether their actions supported that they participated in the theft of the phone. We didn't think it supported either."

As part of the criminal investigation surrounding the incident last year, agents with the Rapid Enforcement Allied Computer Team (REACT), a "partnership of 17 local, state, and federal agencies" focused on computer-related crime in the Bay Area, executed a warrant and raided the home of Gizmodo editor Jason Chen, searching for evidence related to Gizmodo's scoop about the lost phone. As we repeatedly pointed out at the time, regardless of whether Chen or Gizmodo could have been charged with any crime related to obtaining and discussing the phone, state and federal law plainly barred the issuance and execution of the search warrant directed at journalist-held information "obtained or prepared in gathering, receiving or processing of information for communication to the public." While never discussing the matter directly, the San Mateo D.A.'s office tacitly conceded as much three months later when they petitioned the court to withdraw the warrant.

It turns out that prosecutors concluded that neither Chen nor Gizmodo did anything wrong after all. Legally, that is. Speaking to CNET.com earlier this week, San Mateo County District Attorney Steven Wagstaffe said that there was not sufficient evidence to charge anyone associated with the tech site with "possession of stolen property" or "extortion." Nevertheless, Wagstaffe took it upon himself to deride the quality of the improperly-seized, unpublished correspondence between the Gizmodo editors, describing it as "juvenile."

Another reason why prosecutors may not have wanted to pursue criminal charges against Gizmodo: allegations that the raid, conducted with a search warrant, on Chen's home was illegal. The Reporters Committee for Freedom of the Press and other groups have argued that the raid violated federal and state law.

http://news.cnet.com/8301-13579_3-20118994-37/how-gizmodo-escaped-indictment-in-iphone-prototype-deal/