California Penal Code Section 485
One who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.
IANAL, but I believe over $400 is a felony and as such this would qualify, same goes with receiving stolen goods.
The finder has a call number proving they tried to return it, and the phone provided no info on it's owner since it was disabled.
I hope you represent yourself in court someday. You'll be hilarious.