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The circumstances surrounding the lost Apple employee's lost iPhone 4G/HD prototype that first found in a bar, which turned out be sold to Gizmodo and surfaced online this week are now officially being looked into by local law enforcement:

Apple has spoken to local police about the incident and the investigation is believed to be headed by a computer crime task force led by the Santa Clara County district attorney's office, the source said. Apple's Cupertino headquarters is in Santa Clara County, about 40 miles south of San Francisco.

The finder of the iPhone didn't  report it to the Redwood City Police Department, but sold it to Gizmodo, and Gizmodo has admitted that they paid $5000 for the device. The current focus of the investigation is said to be determining whether or not sufficient evidence exists for criminal charges to be pursued, although it is unclear whether the investigation is targeting the finder of the iPhone, Gizmodo, or both.

Lost iPhone prototype spurs police probe [CNET]