On the night of April 23rd, the house of Gizmodo editor Jason Chen was raided by elements of Silicon Valley’s Rapid Enforcement Allied Computer Team or REACT, a law enforcement group that specializes in investigating technology and identity theft, trademark violations, and online crimes. The group forcibly entered Chen’s home, did a thorough search of its contents, and took with them four laptops, a server machine, external media storage devices, an iPhone, an iPad, and a digital camera. They presented Chen with a warrant executed by a San Mateo County judge when he arrived home later with the authorities still conducting their search.

This incident is the latest in a string of highly-publicized events that was put in motion on the night of March 18th, when Apple software engineer Gray Powell left behind a prototype iPhone 4G in a California bar. A month later, Gizmodo posted the now-famous “This Is Apple’s Next iPhone” on its blog, generating more than 5 million page views. A later post on the tech blog revealed how it got its hands on the very valuable prototype, to the tune of $5,000, from an anonymous finder. Several groups later pointed out that Gizmodo can be held criminally liable for possession of stolen property under California laws. It seems that Apple took note, and on the morning of April 23, Apple contacted California law enforcement. This signaled the start of a criminal investigation currently in progress against Gizmodo.

Updates on the status of the police investigation remain murky, but Gizmodo will be in a really hot seat in the days and weeks to come. Although Apple has declared the prototype as stolen, California’s Privacy Protection Act deems protects journalists, including those working in Web logs, from searches.