Looks like that lost iPhone 4G that everyone’s been talking about and that Gizmodo handed over cash for isn’t going to die out quietly as apparently the law has now become involved as Cnet reports Silicon Valley police are investigating the transaction made by Gizmodo.

Apparently the transaction for the iPhone 4G prototype may have violated criminal law according to a law enforcement officer who spoke with Cnet.

Apparently Apple has talked with local police and an investigation is being mounted by a computer crime task force headed by the Santa Clara County district attorney’s office.

Gizmodo has already admitted they forked out $5000 for the presumed camouflaged iPhone 4G prototype and basically everyone knows what went on from there, so it looks like Apple is going after Gizmodo for a little bit of revenge for outing their precious device.

According to the article the purpose of the investigation is to see if there is enough evidence to file criminal charges, although Cnet has been unable to confirm if the investigation is targeted at Gizmodo; more on this as and when it develops.