Actually, as I think on it, "lost" or "stolen" don't matter: The seller misrepresented the product. He sold it as something that worked, when it doesn't (because it's blacklisted). The buyer should have the option to return the non-working device for a full refund.
As for having to know that something is stolen before you are in possession of "stolen property"--it doesn't matter in the USA. I didn't know that the canoe I'd bought was stolen, but it was, and I lost it. C'est la vie.
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